National Living Wage: Under-25s

Debate between David Linden and Kirsty Blackman

Thursday 3rd May 2018 Commons Chamber

[David Linden]

My hon. Friend has made a powerful and valid point, which I shall come to later.

I hope very much that when the Minister comes to the Dispatch Box, he will not trot out the usual lines, which fall apart when subjected to any scrutiny. Let me deal with one or two of them now. For example, Ministers tell us that younger workers have less experience and should therefore receive less pay. Unfortunately, younger workers do not get a discount on their shopping, fuel or rent when it comes to paying their bills. One area in which young people do qualify for help is housing benefit, but only after a recent screeching U-turn from the Government on their abhorrent policy of excluding 18 to 21 year-olds.

The discriminatory exclusion of under-25s from the national living wage takes no account of how people actually live. For example, by the time I was 25—which was actually not that long ago—I had already been married for three years. I owned a house, and I was a father. I urge Ministers to look at the actual data rather than rehashing old arguments, and to consider the economic case for including under-25s in the national living wage.

[Kirsty Blackman (Aberdeen North) (SNP)]

The point that my hon. Friend is making about experience is very important. When I was 18 I started work in a pub on the same day as someone who was 25. Neither of us had worked in a pub before, so we had exactly the same level of experience, but the 25-year-old was eligible for the 25–year-old’s minimum wage, while I was paid the 18-year-old’s minimum wage. Does my hon. Friend agree that that was just unfair?

[David Linden]

Absolutely. That is what drives the Scottish National party’s fair work agenda. It is about fairness, and about lifting people out of poverty. I thank my hon. Friend for her powerful intervention.

[David Linden]

My hon. Friend is absolutely right. What he has said takes us back to the central point that a fair day’s work should result in a fair day’s pay.

If the Minister looks at the data, he will see that 2.5 million young people do not live with their parents. That is 2.5 million young people paying for shopping, rent and utilities. Statistics from the Office for National Statistics show that approximately 20% of mothers are under the age of 25. The discriminatory exclusion from the national living wage means that they must get by on poverty pay.

The current national minimum wage—and we should bear in mind that that legislation was passed in the last century—is not only a clear example of direct age discrimination, but an example of discrimination based on class. It flies in the face of the very concept of social mobility. How can a 22 year-old first-year apprentice on a miserable £3.70 an hour be socially mobile? That is what the law currently allows, as is stated on the UK Government’s website. That is what an employer who is thinking about employing an apprentice is encouraged to do.

A recent report by KPMG showed that one in five people are struggling to escape from low pay. For example, one in four women earns less than the real living wage. Put simply, that means skipping meals, living in debt and using payday loans just to get by. The fact is that there is a solid evidence base out there that makes the case for equal pay for under-25s.

[Kirsty Blackman]

Does my hon. Friend agree that there could be a positive impact on productivity? If people are having to work extra jobs and cannot afford to eat, they will be less productive, but if they were paid a living wage, they would do better work for their employers as a result.

[David Linden]

My hon. Friend makes a powerful point. If an employer pays someone under 25 the real living wage, that sends a message of real encouragement to the employee; there is clearly a productivity point here.

I commend and thank the Young Women’s Trust, which produced an excellent report last year entitled “Paid Less, Worth Less?” I have placed a copy of the report in the Library of the House this afternoon, and its testimonies make pretty stark reading. I will share just one today. It comes from Katie, a 19-year-old from Newcastle:

“I was a customer service apprentice in a small shop—only me, another apprentice and my manager worked there.

I had to do a lot—serve customers on the till, clean the store, display the products, update the online store, pack and post online orders and more.

I was paid £2.73 per hour, which went up to £3.30. I got paid on a Friday at the end of the month. The next week I was skint.

I remember one day I had 40p for dinner, so I got one doughnut from M&S.

My manager noticed and offered to buy me a McDonalds.

I felt so stupid.

A quarter of my monthly income was spent on bus fare getting to and from work. It was a struggle.”

It is sometimes easier for us in this House to focus on statistics rather than people, but Katie’s story succinctly and eloquently outlines the pay inequality that still exists in the UK in 2018.

Katie is not the only one. Only last week, following an oral question from me in this House, the Chancellor wrote to inform me that there are approximately 22,000 apprentices in the UK being paid just £3.70 an hour. Surely no self-respecting Minister thinks £3.70 is a decent hourly rate; I do not think any of us would be happy to turn up here and get paid just £3.70 an hour.

There are also particular sectors in the employment market where deliberate wage depression is a major issue and could have a major impact on the sustainability of business, particularly when free movement of people is restricted post Brexit. These sectors include retail and hospitality, which are often largely staffed by young people.

I would hope that the Minister would distance himself from the comments made by the Secretary of State for Digital, Culture, Media & Sport who back in January 2016 said younger workers would not get a pay rise because they are “not as productive” as older workers. It would take a particularly brave Minister to repeat that, especially on an election day.

Finally, the Minister might be worried about how businesses would react to under-25s being included in the national living wage. However, let me assure him that there is clear polling evidence from YouGov, on a sample of some 4,000 HR managers; they think that young people should be paid the same as older people for work. Some 79%—that is four in five—of employers think there should be equal pay regardless of age, as do 77% of small and medium-sized organisations. Some 80% of employers also said that young people make a bigger, or the same, contribution as older workers, and that on the whole younger workers came with a fresh perspective and injected some energy.

Most employers when asked said they would not cut back on hiring young people if the national living wage was extended to under-25s. Indeed, the New Policy Institute found in a report commissioned by Unison on the topic that, historically, raising wages for people under the age of 21 in the UK has not harmed their employment outcomes. So the evidence is clear and so is my message to the Government today.

[David Linden]

My hon. Friend is right: giving under-25s that spending power would boost the economy and could help kick-start the economy.

[Kirsty Blackman]

As an employer, I have taken on a number of young people on internships, and I have paid the real living wage, not the Government’s pretend living wage, regardless of their age. I found that they made a very valuable contribution to my office and a real positive difference. Has my hon. Friend got experience of doing similar?

[David Linden]

I am grateful to my hon. Friend for leading me down that particular path, which I had not quite thought of. She will be aware, as will my hon. Friend the Member for Glasgow South West (Chris Stephens), that I am going through the process of recruiting for the first ever John Wheatley intern—a young person will come to work in my office. I believe passionately that if we are to get more people into politics, we need to open up that process; it cannot just be the same people taking on political interns. When I started the process of advertising for that internship, I was conscious of the need to advertise it at the real national living wage. Last week, I set up seven or eight interviews, and I am sorry to have to tell the House that I got a phone call this afternoon to inform me that one of the young guys I was due to interview had sadly passed away. I want to take this opportunity to pay tribute to Scott, who is no longer with us.

The evidence is clear for equalising the national minimum wage to include the under-25s, and my message to the Government is also clear: if we want to build a country that works for everyone, we need to end this discriminatory pay inequality. The Government need to pay a real national living wage, and they need to pay it to the under-25s too.

Oral Answers to Questions

Debate between David Linden and Kirsty Blackman

Thursday 29th March 2018 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

rose—

[David Linden (Glasgow East) (SNP)]

rose—

Tax Avoidance and Evasion

Debate between David Linden and Kirsty Blackman

Tuesday 14th November 2017 Commons Chamber

[Kirsty Blackman]

The hon. Gentleman is confusing income tax with a number of other types of tax. What has happened in Scotland in relation to the paper that has been produced, which sets out a number of options and their effects, and then consults on them, is way more transparent than any action that any UK Government take in advance of any Budget, where they pull rabbits out of hats. The Scottish Government have entered into dialogue with the other parties, which have the opportunity to take that chance to criticise or to praise. They should do that, as he should. The Scottish Government and the SNP have called for this area to be devolved to Scotland because we think we would do a better job.

As everyone knows, tax evasion is illegal, but the Paradise papers highlighted that tax avoidance is immoral.

[David Linden (Glasgow East) (SNP)]

On the Paradise papers, does my hon. Friend share my concern at seeing the Duchy of Lancaster’s investment in BrightHouse, a company that exploits constituents in vulnerable areas such as mine with extortionate annual percentage rates of 70%? Does she find that immoral as well?

[Kirsty Blackman]

I agree with my hon. Friend on that, as I, too, have constituents who are exploited by organisations such as BrightHouse. It is not a company that anyone reputable should be investing in.

It is not that difficult for people to pay the tax that they owe; it is not that difficult to say to a financial adviser—this is for those who have bags of cash—“I would like my money to grow, but I wouldn’t like it to grow by avoiding the tax that I owe.” It would be easy for people to say that. It is clear that some people lack a moral compass. Where they are taking decisions to engage in aggressive tax avoidance, the Government must legislate so that they can no longer do so—to provide that moral compass for people and make sure that the tax is paid when it is owed. We must have the best possible tax rules in place. We must simplify the tax code. We must crack down on evasion, and we must legislate to reduce avoidance. The Government are in an untenable position: they cannot continue to implement austerity while leaving a tax gap.

Finance Bill (First sitting)

Debate between David Linden and Kirsty Blackman

Committee Debate: 1st Sitting: House of Commons
Tuesday 17th October 2017 Public Bill Committees

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to take part in another Finance Bill Committee, and I am looking forward to another one coming later this year. It feels like we have been discussing this one for quite some time, so I am glad to finally be at the Committee stage in a Committee Room. Thank you for your chairmanship, Mr Howarth.

I wanted to highlight our amendment on this. There have been a huge number of changes in the pensions landscape in relatively recent years. In my working lifetime, we have seen a move away from a final salary pension scheme to career average for the majority of people, even in the public sector. We have seen changes to things such as the lifetime individual savings account and the ability to withdraw pensions. Those are pretty significant changes in the landscape; pensions for people my age look very different from how they looked not that many years ago.

We have also seen changes to the Women Against State Pension Inequality issue, and the equalisation problem. A number of people have come through the door of my surgery and talked to me about how they have been caught by the WASPI issue. If they had had different pensions advice, they would not have retired in the way they did. More than one person who took early retirement now finds that they are caught by the WASPI issue when they should have retired under ill health, which would have given them a completely different outlook on their pensions. If they had had more appropriate advice when they were deciding when to retire, they would have been much better off.

I welcome the Minister’s proposal to make the first £500 of pension advice tax-free; that is an important change and one that we all generally agree with. I agree with the shadow Minister, however, who asked whether £500 is the most appropriate amount. Should it be £1,000? Should it be less? The amendment we have put forward specifically asks about the issues for women born on or after 6 April 1950, because they are the ones who have been caught by this WASPI issue. I am keen to see an increased uptake of pensions advice by those women, because for some of them changing the way in which they retire would make a difference.

Those women have been failed by the system. They have been failed by the Government, who have moved the goalposts and changed the date on which they expected to retire. Some of them retired not long ago and were completely unaware of the change. Those are people who would have read every bit of paper that came through their door. A medical secretary came to my surgery the other day. A medical secretary is someone very diligent about reading bits of information that come through the door, particularly about financial matters that are important for her future, and I believe that she would have chosen a different route to retirement if she had had appropriate advice, and if she had known what would happen on state pension equalisation and what would happen to her.

[David Linden (Glasgow East) (SNP)]

Does my hon. Friend agree that this Government have a pretty dire record on protecting pensioners, not least on the WASPI issue, but even on the winter fuel payment?

[Kirsty Blackman]

That is absolutely correct; I have seen people come through my surgery door to complain about that as well. I did not quite realise the difference in temperature between London and where I live until I became an MP. In London, I could quite easily not have the heating on at all through the entire year, whereas in Aberdeen my heating is on in September, or even earlier. Heating costs significantly more, so the winter fuel payment is hugely important for a number of my constituents and makes a significant difference to their lives. Those people are in fuel poverty; they have been failed by the system, and it is important to note that.

I will not stretch this out too much, but I must be clear that a number of people have been failed by changes to the goalposts. Those changes might be in how their pension is structured and what kind of pension they will get in the end because of movements away from final salary pensions, or because their state pension age has been moved, or because of things like the Government’s wonderful lifetime ISA, which means that if someone becomes sick, their lifetime ISA is considered a savings pot for benefits and held against them when they try to claim benefits. Therefore, a lifetime ISA cannot be seen as something that can be used instead of a pension, because it does not provide the level of safeguards that a real, proper pension pot does.