Yesterday MPs took part in a Backbench Business Committee debate on a motion about promotion of the living wage. Many people have noted that attendance was disappointing. However this is common for such debates – the real issue is that we need to see ministers coming forward with proposals for increasing the uptake of the Living Wage across the country. But the debate itself seems to have been quite constructive, and very supportive of the Living Wage.
The rise in low pay and in-work poverty was noted, the trend linked alternately to the financial crisis or the current government’s policies. Various ways of raising/improving the minimum wage were mentioned, including broadening the Low Pay Commission’s remit or changing the guidance that it is given, raising it in line with the Living Wage, and strengthening enforcement of the existing minimum wage.
The benefits of paying the Living Wage were described in detail and agreed by all, this is one of many such examples, “When I go to my local Barclays in Hexham or any other branch, I am told that when cleaning staff are paid the living wage—traditionally it is the cleaning staff who slip through the net—capitalism takes over and, market forces being what they are, everyone wants to be a cleaner for Barclays, staff turnover drops through the floor, everyone feels much more valued and the offices are cleaned faster. Bizarrely, therefore, paying people more ends up costing the business less, and the quality of the product—the cleanliness of the offices—is improved.” Guy Opperman.
The role of government departments and local authorities was much discussed, and all agreed that more should be done, “I call on local authorities that are not accredited living wage employers to follow the example of many across the country that are. Too few local authorities have committed to paying their staff the living wage. This might seem a naive question to the Minister, but I wonder why some do and some do not. Local authorities that do not pay their staff a living wage should speak to those that do, and see at first hand the benefits that it can provide.” Chris White, who called the debate.
Football was mentioned as an example of an industry in which much more could be done, and cleaning staff were discussed, but some other industries such as care were largely unaddressed, except highlighting a couple of positive examples ” I am proud to say that the first thing the new council did in 2012 upon being elected to office was to introduce the living wage for all its directly employed employees. Subsequently, it introduced it for those working for schools and now ours is the first council in the country to insist that in future all contracts for care will be let on the living wage. As he has said, “Why is it that, historically, we have paid the least to those who care for those we value the most?””, Jack Dromey.
Stephen Timms, Shadow Minister of State for Employment, summed up unequivocally for Labour, talking about his party’s “proposals for the “make work pay” contracts, under which companies that sign up to become living wage employers would gain a first-year tax rebate of up to £1,000 for every low-paid worker who gets a rise, effectively repaying to the employer the first-year Exchequer gain in tax take from the increase as an incentive.”
He also talked about the importance of local authorities becoming accredited Living Wage Employers, and endorsed previous comments by another member “All central Government Departments should become accredited living wage employers as a first step towards a requirement to pay the living wage to all staff working on Government contracts, and he tentatively suggests that firms bidding for contracts above a certain size might also be required to pay the living wage. He proposes that the Low Pay Commission be given a broader remit, for example to look at the causes and impacts of low pay, and make recommendations to the Government on how to tackle it. He advocates improving enforcement of the national minimum wage, and estimates that a quarter of a million people are still paid less than that, despite the law. He calls for the Low Pay Commission to assess annually the effectiveness of enforcement, and rightly calls for local authorities to have enforcement powers for the national minimum wage, alongside HMRC.”
Nick Boles, Conservative, Minister for Skills and Equalities, had almost the last word, talking also about the importance of government departments ensuring that their staff and agency workers are paid the Living Wage, describing a strong and stable, job-creating economy as the most important factor, and secondly that “those who can afford to pay more than the minimum wage [should] lead the way and set an example”.
He also highlighted the possibility but also the difficulty in ensuring that all government contracts be brought into line with the Living Wage ” we should not fool ourselves by thinking there is a simple lever we can pull. I believe almost any contract, if it is thought about intelligently, can be reconfigured in such a way that an equivalent level of service can be achieved without increasing the number of people employed, and that therefore productivity improvements can be sought that will make it possible for a contractor to pay a very slightly higher wage. I therefore do not believe there is necessarily a choice between lower service from contractors or lower wages. It is possible to maintain or even improve services and pay better wages, but it is not simple and it is not easy. The way to do it is by working with one’s contractors, explaining to them one’s hopes, ambitions and aspirations and hearing from them other ways we can perhaps change our demands as employers and contract letters, so that they can afford to pay those wages.”
You can read the full transcript of the debate here. While some may find aspects of the debate slightly underwhelming, it was significant in seeing cross-party consensus on the issue yet again, and in seeing parties set out their stalls for how to tackle low pay and promote the Living Wage.