Summer Adjournment — House of Commons, 2016-07-21
Topic: Labor
Siobhain Ann McDonagh (Labour, Centre-left): The vote to leave the EU a few weeks ago is a great indication that there are millions of people in our country who feel that they are being left behind, not sharing in the growing prosperity of others. And they are right Unemployment may be down according to certain definitions, but poverty certainly is not. For one of the first times in UK history, low wages mean most of Britain’s poor families are in working households. The Institute for Fiscal Studies has found that two thirds of children living in absolute poverty have at least one parent in work Even the introduction of the new national living wage, intended in the words of the former Chancellor, the right hon. Member for Tatton (Mr Osborne), to give Britain "a pay rise", has fallen short. It has become a vehicle for reducing the take-home pay of thousands of long-standing, loyal employees in the retail, hospitality and care sectors Back in February of this year, I was approached by an employee of B&Q who had been given proposed new terms and conditions and thought he might be worse off as a result. In these new contract terms, the employee’s basic per-hour pay was going to be increased, but his overall pay would be reduced by £2,600 per year. This is because B&Q planned to cut Sunday and bank holiday pay, as well as other discretionary bonuses—in short, everything that made B&Q an attractive employer and allowed it to retain its staff I was delighted that my right hon. Friend the Member for Enfield North (Joan Ryan) was able to speak in my place during the debate on the national living wage in this House back in April, where dozens of Members voiced their concerns regarding B&Q’s plans. I was pleased that after the press attention in the debate, a great deal of lobbying, and a meeting between me and the B&Q CEO, the company extended its period of compensation for employees for two years, promising that no one would lose out for the next 24 months. But B&Q is just one of many Over the course of my campaign, I have been approached by employees from around the country, and from all sorts of different companies doing exactly the same thing. There were the factory employees working for subsidiaries of Samworth Brothers in Lincolnshire who are facing cuts to their overnight pay. I was delighted that my hon. Friend the Member for Leicester West (Liz Kendall) met with Samworth workers to hear their concerns. There were young baristas at Caffè Nero and EAT whose free lunches had been scrapped. Most recently, there are 7,000 staff at Marks & Spencer who will be losing out by thousands of pounds each year because the company is cutting overall pay to fund an increase in basic pay I have had well over 100 M&S employees from around the country coming forward to me with M&S’s new proposals, with staff terrified for their futures. M&S is cutting Sunday and bank holiday pay, redefining unsocial hours and scrapping its pension scheme, leaving staff with over 20 years of experience at M&S significantly worse off Let us consider Elizabeth, whose story was reported yesterday in the Evening Standard. Her name has been changed to protect her identity. Elizabeth used to have great wages and perks at M&S, which she was proud to work for, but now she says: "Everything is being taken away from us. I wanted to see my kids through university but now I’m not sure I’ll be able to. It really frightens me." In a meeting with its head of retail, M&S confirmed that 2,700 M&S employees will lose over £1,000 per year, and 700 will lose over £2,000 a year. Some of the employees who have got in touch with me are going to lose—this is hard to believe—up to £6,000. To be clear, that is after their basic pay is increased M&S maintains that this is just a proposal. It cites its "compensation package", which compensates staff members for 30% of their projected losses not including how much they will lose in terms of pension cuts. From the paperwork I have seen and the experience at B&Q, I think M&S’s plans are a foregone conclusion. To be clear, it is not as if head office staff are getting the sort of pay cut they are dishing out to long-standing shop- floor staff. There were a number of options M&S could have pursued. Other companies have invested in skills to improve the productivity of their employees. Ultimately, M&S has decided to offset a basic pay increase for some staff by cutting the pay for others There are many more examples of UK industrial policies letting down hard-working loyal employees. Just consider the recent discovery of Hermes, the delivery company, using self-employed workers and paying them less than the legal minimum wage, and HMRC’s investigation into Sports Direct’s working practices. Both companies are undermining the integrity of Government policy. These are huge institutions we are talking about, not small local businesses; their profits are in the millions of pounds, and they employ thousands of people I was delighted that the Chancellor committed to look very carefully into the case of M&S earlier this week, but I want to tell the Minister today that it is not good enough to introduce a policy like the national living wage without policing it. If Britain has been promised a pay rise by this Government, then Britain deserves to get a pay rise Will the Minister write to the M&S chief executive, Steve Rowe, to express the Government’s concerns, calling on M&S to reverse its plans? I absolutely endorse the Prime Minister’s commitment to building a UK economy that works for all, and her Government must start by addressing the causes of low wages. People who work hard and play by the rules need a defender in national politics. Both the Government and those on these Opposition Benches have a responsibility to be that champion.