National Living Wage — House of Commons, 2016-04-18
Topic: Labor
Julie Elizabeth Cooper (Labour, Centre-left): I pay tribute to my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for securing a debate on this important topic, and I wish her a speedy recovery. I also congratulate my right hon. Friend the Member for Enfield North (Joan Ryan) on the way in which she has led the debate Like so many Members in the House, I welcomed the news in last year’s Budget that the Government would introduce a new national living wage, as a result of which workers aged 25 and over would receive £7.20 an hour in April—an increase of 50p from October 2015, when the minimum wage was set at £6.70. I also welcomed the plans for it to rise to £9 per hour by 2020. Both those measures are important steps towards securing a real living wage, which the Labour party continues to campaign for. After years of workers enduring the bulk of the Government’s austerity agenda, a pay increase for 1.8 million workers is welcomed, even though it does not go far enough For me, this is a local issue, that affects the lives of many of my constituents. According to the House of Commons Library, 19% of people in my constituency will benefit from the living wage this year. That figure will rise to 27% by 2020. I understand that the changes will have a disproportionate impact on small businesses, which employ 35% of the adult workforce and 52% of Britain’s minimum wage workers, and that it will be concentrated in the hospitality and retail sectors, which account for more than 46% of minimum wage jobs. I also note the concerns coming particularly from the social care sector, which is already underfunded. The Government urgently need to do more to address the shortfall in funding In the recent weeks leading up to the implementation of this new wage, a campaign of fear has been put out by large employers that simply do not want to pay their employees a fair wage. Some have claimed that a living wage will lead to job losses. Others have had the gall to say that raising wages is in effect a tax targeted at businesses using low-skilled workers. The truth is that the taxpayer has had to pay to top up the pay of workers to the tune of £11 billion a year. Prior to this wage rise, the four big supermarkets alone—Tesco, Asda, Sainsbury’s and Morrisons—cost £1 billion a year in the tax credits and extra benefit payments their underpaid staff received I have found disturbing and, quite frankly, shameful the way in which some large employers in the service sector have used the introduction of a living wage as an excuse to cut basic work entitlements. In the face of the changes, some employers have cut holiday pay, lunch hour pay and sick pay, and have cut contracted hours. As has already been mentioned, the retailers B&Q, Tesco and Wilko have all cut premium holiday pay and other benefits while reluctantly raising pay. Staff at Tesco face a cut to night-time and holiday bonuses, as do staff at Wilko and Morrisons. One Tesco worker has said that the loss of pay will amount to £75 a month, which could be the difference between making next month’s rent and being kicked out on to the streets.