National Minimum Wage

Debate between Eilidh Whiteford and Russell Brown

Wednesday 15th October 2014 Commons Chamber

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

It is a pleasure to follow the hon. Member for South Derbyshire (Heather Wheeler), who is, dare I say, one of the jovial characters in this place. She speaks much sense. She speaks about doom and gloom among Labour Members, and I try as best I can to be upbeat, but I am sure that she would recognise that the economic recovery that Government Members talk about is not being seen across the country. I have said it time and again, and I hate to say it, but I will not let people forget that 13 or 14 months ago the average wage in my constituency in rural south-west Scotland was 24% beneath the UK average. Thankfully, that has improved and it is now at about 17% or 18%, but people are struggling.

Across the country, working people have seen their wages fall by an average of £1,600 a year, because under what I—and my colleagues, I am sure—see as the Government’s failing plan, the recovery is benefiting a privileged few and most families are not seeing the green shoots of any kind of economic recovery. The real value of the national minimum wage has fallen and one in five employees are low paid. That impacts not only on low-paid workers but on their families, their communities and the local economy. It piles up across the country as more people in work have to rely, as has been said this afternoon, on the social security system to make ends meet.

My hon. Friend the Member for Westminster North (Ms Buck) mentioned the Campaign to End Child Poverty and the work done by the centre for research and social policy at Loughborough university. The figures out today for my area are soul destroying. The figure for the number of children living in poverty is now 23.2%. Those figures include more than 3,000 children affected by in-work poverty, whereas 1,200 are affected by out-of-work poverty. A massive shift is going on and we are seeing more and more families affected—families with children. We should all be saying that we are going to do something about that together to get children out of poverty. The situation is pretty desperate in some areas, and I recognise that my hon. Friend cited even higher figures from her London constituency.

The hon. Member for South Derbyshire mentioned colleges. I have to tell her that the college system and the further and higher education systems are different north of the border. I have a new college in my constituency that is only two or three years old, but the budget has been cut by the Scottish Government. Over the years, about 30% of the young students going into that college have had no formal qualifications whatsoever. The formal education system has failed them, but the college offers them a second chance that many of them have seized. However, the budget for our further education colleges is being cut—that is not the fault of Government Members, because it is a devolved issue—and so courses are being cut. That means that young people who need that second chance are being deprived of the opportunity.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Does the hon. Gentleman accept that the number of apprenticeships in Scotland is at a record level and that targeting funding at policies that will get young people into work, rather than at an endless cycle of college courses that do not lead to work, is a better use of scarce public money at a time when the block grant has been cut and when public finances are under immense pressure?

[Mr Brown]

I recognise that finances are under pressure, but I would say the same to the hon. Lady as I said to the hon. Member for South Derbyshire. The situation is not the same across the entire country. Youth unemployment in my area sits at some 5.3% whereas the Scottish average is 4.8% and the UK average is 3.8%, as there are so few job opportunities. When young academically inclined people in my area manage to get off to college or university, 90% never come back because the quality jobs that the hon. Member for South Derbyshire has spoken about are simply not there. It is a rural economy—tourism is the other major employer—but the growing job market is in the care sector as people come to the area to retire. We have a vastly different economy to other places, although similar economies exist.

I want to move on to the issue of the national minimum wage. I said in an intervention on my hon. Friend the Member for Streatham (Mr Umunna), the shadow Secretary of State, that I served on the Committee for the National Minimum Wage Bill. As I said at the time, the only other person who served on the Committee who was in the Chamber at the time at which I made the intervention was Mr Speaker. There were some long nights. Indeed, I remember two particularly lengthy sittings: one that started at 4.30 on a Tuesday afternoon and ended at 1 o’clock the following afternoon, and another that started at 4.30 on a Thursday afternoon and finished at 6.30 the following morning. But it was really worth it. I remember campaigning in Lockerbie when the figure of £3.60 an hour was announced, and one guy I met on the doorstep asked, “Is this figure of £3.60 right?” I said yes and asked whether it would affect him. “Of course it will,” he said. He was working the best part of 50 hours a week in the forests—heavy, dirty and dangerous work—but taking home only about £112 a week.

Food Banks (Scotland)

Debate between Eilidh Whiteford and Russell Brown

Wednesday 19th December 2012 Westminster Hall

[Dr Whiteford]

I do not doubt that the hon. Gentleman will have a higher quality of intervention, but I will not give way at this point, simply because I am conscious of time. Clearly, I have some things to say in this debate and I want to get through them in the time allotted.

The other 50% of the increase in demand for food parcels is from people whose benefits have been delayed or who are having problems with the administration of the benefit system. There is no doubt that the dramatic increase in the demand for emergency support is a consequence of the recession, and the increased numbers of people who face sudden unemployment, or cuts in their working hours or real-terms cuts in their wages. However, demand has also been increased by the austerity measures—the response to the recession by the Government—and the disproportionate hit that people on low incomes, particularly those who wholly or partially depend on benefits to keep them above the breadline, have had to bear in the raft of financial cuts that we have seen during the last two years.

The changes to the benefit system have placed greater restrictions on people, and the stringent time limits on some benefits—such as employment and support allowance, and housing benefit—will only make that problem worse. Experts are warning that the real bite of these measures is still to come.

Aberdeenshire was part of the pilot scheme for the work capability assessment. I am already seeing people at my surgeries who have been assessed as fit to work who are simply not fit for work, and whose precarious health has been further jeopardised and damaged by very difficult engagement with the benefit system. Those left without entitlement are increasingly falling back on financial support from their unpaid family carers, who themselves are often in very tight financial circumstances. These are families who are finding themselves having to rely on emergency support.

The other emergency support in our social protection system, which I debated with the Minister a week ago, is the social fund. As I am sure Members are aware, the social fund currently provides crisis loans and community care grants; it is very much the last safety net of the social protection system. It will be abolished next year, with responsibility for its functions being devolved to Scotland. However, it is important to acknowledge that the Department for Work and Pensions has been managing back the social fund to its 2005-06 level, despite the increasing demands on it, and the money being devolved next year will represent a cut of about 50% on the 2009-10 level.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

rose—

[Dr Whiteford]

I would be delighted to take an intervention from the hon. Gentleman, but I will not take any more interventions after this one.

[Mr Brown]

I will do my best to be brief, Mr Betts.

I say to the hon. Lady that the social fund that is now finding its way into the hands of local authorities has not been ring-fenced. Does she share my view that what we may find is some local authorities to a certain extent misusing that money, rather than targeting it at the areas where it is most needed? She should keep in mind that local government is under pressure under her party’s Government.

[Dr Whiteford]

I am aware that the social fund has not been ring-fenced across the UK. There is a strong argument for ring-fencing it. I am not aware of the details of the welfare fund that the Scottish Government are putting in place, but I know that it will be a national fund. I expect that that fund probably will be ring-fenced, but that is a question that needs to be addressed to Scottish Ministers.

I am pleased that the Scottish Government have committed extra money to make up the shortfall in the social fund once it is devolved, after the cuts that have been made to it, and that there will be an opportunity for that to happen. That is one concrete way in which protection can be put in place.

I will be very quick, as I do not want to test your patience, Mr Betts. One of the assertions that has been made in the debate is that there is a lack of research in this area. When I was doing my research in preparation for the debate, I was very much informed by the low-income diet and nutrition survey, which was commissioned by the Food Standards Agency. It gave a very clear picture, and a wealth of useful information, about diet and nutrition in Scotland, and it makes it very clear that they are associated with income poverty. The most deprived 15% of the population are likely to be eating about half the recommended level of fruit and vegetables, and well above the maximum recommended level of sugar.

Health inequalities and their consequences are not the subject of this debate, but it is important that we look at the issue of food banks holistically and on the basis of the evidence, and that we understand that changes to the benefit system are having an impact across these islands. We need to put in place emergency provision, but at the same time we need to tackle the long-term drivers of income poverty and poor nutrition in our society.

--- Later in debate ---

[Mr Brown]

Absolutely. I could not put it better myself.

So with a two-month suspension and no money, how could the family cope? What kind of lesson or way of existing is that? What kind of environment is that in which to bring up children? Let us not forget the point that my hon. Friend the Member for East Lothian made about the need for children to be fed properly, to enable them to develop at a young age. It is life experiences in the early years that have the most impact on children.

We have talked about the SNP Government, and I appreciate that that is not an issue for the Minister to respond to, unless he finds that he has the same train of thought as I do on it. Local government is, however, under real pressure, and what Mark Frankland at the First Base Agency has been experiencing for a long time is social services referring families to him for food parcels. I have spoken to Mark in the past 24 hours and he has told me that social workers will arrive at his office today to pick up food parcels to deliver to some of their clients. A little extra money into social services from the Scottish Government would go a long way.

[Dr Whiteford]

Does the hon. Gentleman accept that the cuts to local government in Scotland have been at a lower level than in other parts of the UK, and that the Scottish Government have worked closely with Convention of Scottish Local Authorities to mitigate the impact on low-income families, through, for example, work to secure council tax benefit where it has been abolished?

[Mr Brown]

I identify where the hon. Lady’s loyalty lies, but a question that she and her colleagues in the Scottish Government need to answer is: why were we seeing cuts to local government in Scotland three years before the block grant was cut? There was no need for that whatever. I know that the money was not as great as she might have expected, but we saw cuts three years before the block grant was reduced.

In conclusion, the dilemma that families face—some of which I hope we share—will only be compounded as we move through the next 12 months. There will be universal credit for those in receipt of benefits, and it will be delivered directly to them, so housing benefit and council tax credit will be delivered to the person applying, rather than going directly to where it should be going. Families will get the money, and then the dilemma for them will be: will they pay their rent, or their council tax?

Public Service Pensions Bill

Debate between Eilidh Whiteford and Russell Brown

Monday 29th October 2012 Commons Chamber

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

It is ironic that we are discussing pensions today, given that much of what we have seen in the press over the past 10 days or so has been about the comments of the Secretary of State for Work and Pensions on whether we, as taxpayers, should support unemployed families with two or more children. No thought has been given to who those children are, but they will become the next few generations of taxpayers who will be making contributions to support pensions, either through public sector pensions or by putting money into the pot to provide benefits for others. I am pleased that we have moved on from having a go at households in which no one is working to looking at a different group of people.

I want to put on record the fact that some of the poorest paid people in our country are public sector workers. As my good friend and colleague, my right hon. Friend the Member for Wentworth and Dearne (John Healey), said earlier, pensions in the public sector are actually pay deferred. That is exactly right, and when we end up with poor pay in the public sector, we also end up with poor pensions.

Much has been said about Lord Hutton’s report. The commission firmly rejected the claim that current public sector pensions were gold-plated, and we have heard that the average pension paid to public sector scheme members is about £7,800 a year, while the median payment is about £5,600. We have also heard that half of women public sector pensioners get less than £4,000 a year.

Labour Members recognise that public sector pensions need to be reformed, which is why we have consistently argued that there will need to be some kind of an increase in contributions and, as the population gets older, an increase in the retirement age. We have also been clear that any settlement or agreement should meet three tests, which are slightly different from the Government’s four tests, although there are elements on which we agree.

The first test is affordability: will the changes deliver a fair deal for taxpayers when times are tight, when taxes are rising and when spending is being cut? The second test is fairness: will the changes deliver a fair deal for public sector workers on low and middle incomes whose pensions are far from being gold-plated and who have given a great deal to the services in which they work and on which each and every one of us—in the House and throughout the country—depend? The third test is sustainability, because anything that any Government do needs to be sustainable. Will the changes deliver a workable settlement for the long term that does not undermine the sustainability of existing schemes and that can be flexible in the face of rising life expectancy?

I recently took the opportunity to meet several serving police officers in my constituency, and I have been tasked with raising their concerns in the Chamber this evening. We often talk about the good job that the police do, but I almost never hear people talking about police service pensions. For the sake of clarity, I should point out that although certain public sector pensions in Scotland are administered by the Scottish Government, the reality is that the decisions reached here in Westminster are followed—or mirrored, as the hon. Member for Banff and Buchan (Dr Whiteford) said—north of the border.

Despite the stated opposition of the Scottish Government’s Finance Secretary, John Swinney, to the increase in pension contributions, he confirmed in a statement to the Scottish Parliament on 21 September 2011 that the Scottish Government would apply the increase in employee contributions for the NHS, teachers, police and firefighters schemes in Scotland. As my right hon. Friend the Member for Wentworth and Dearne said, that represents an additional 3% tax on those workers in the public sector.

[Dr Whiteford]

Is the hon. Gentleman aware that, before that decision was made, the Chief Secretary to the Treasury wrote to the Scottish Finance Secretary to say that if those contributions were not increased, £8.4 million a month would be removed from the Scottish Government’s financial settlement until such time as the Scottish Government followed the lead of other parts of the UK? I do not know what the hon. Gentleman thinks John Swinney should have done in those circumstances, but I believe that his hands were completely tied. Not only would the Scottish Government have lost that money out of the block grant, but they would have had to find it from another budget. In effect, therefore, they would have had to pay for those contributions twice.

[Mr Brown]

I am pleased that the hon. Lady has come into the debate. I am not sure whether she was here when I intervened on the Chief Secretary to the Treasury to ask whether any such penalty had been suggested, but he did not answer my question in a straight manner, so I thank her for that intervention.

The serving police officers whom I have met are seriously concerned and feel that they have been let down by their representative body, the Scottish Police Federation. We all know about the technique of divide and conquer, yet with regard to the pension changes, it has become clear that we are seeing protection—understandably—for those nearing retirement age, but that that is being provided at a cost to those who joined the police service between 1992 and 2006. Those who fall into that category feel that they have been abandoned and hung out to dry.

Those people joined the police service under certain terms and conditions, one of which was that after paying their contributions into the pension fund, they could retire after 30 years and then qualify for a lump sum and a pension. One officer pointed out that he was halfway through that 30-year period. It was difficult for him to get a forecast, but the closest he could get was an indication that having worked an extra seven years, his lump sum would be about 30% of what was first anticipated, while the pension would be about 70% of what was expected. We all go through life making plans, and for some of us retirement comes that little bit sooner. When people cannot recover ground as they move towards retirement age, it leaves them in a real dilemma. As one chap pointed out, “I had looked at retiring at a specific age. My lump sum would have cleared my mortgage. I now need to rethink where I am going.”

There is a strong belief that section 2 of the Pensions Act 1995 prevents the Government from changing pensions, so I hope that the Economic Secretary will put a clarification of that point on record. The first Winsor report of many years ago stated that officers could not work beyond the age of 55, but we are now seeing a significant change. Officers will be subject to a fitness test, but what will happen if someone fails such a test? Will they be made compulsorily redundant?

We know about some of the activity on our streets today. We should not just condemn groups of people, but there are criminals out there, and I would hate to think that police officers will be trying to chase younger people on foot. If officers are between the ages of 55 and 60, there is every chance that criminals will be significantly younger than them. We will be asking the police to do a task that is beyond many people’s comprehension.

Police officers are asking the Government why there is a further review, given that the scheme was changed in 2006 and every officer who joined after that time is on the new 35-year scheme. Many who joined after 1992 are halfway through their service period and their financial future looks extremely uncertain. We all recognise that police officers are not in a position to take strike action—in all honesty, I do not think that they would—but the fact is that those who joined between 1992 and 2006 feel as if they have been singled out.

Although, according to my Front-Bench team, we will not divide the House on Second Reading, I share colleagues’ real concern about retrospection, which has been raised on several occasions. I look forward to colleagues seeking to improve the Bill in Committee and working to offer some protection to those who work —day in, day out—to deliver the services in our public sector that each and every one of us demands.

Regional Pay

Debate between Eilidh Whiteford and Russell Brown

Wednesday 20th June 2012 Commons Chamber

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Thank you, Madam Deputy Speaker. I regret that once again in this House I have to make mention of the fact that my constituency is a low-wage economy area. We talk about the “race to the bottom” and my locality does not have far to go in terms of it being a low-pay area. One of the greatest benefits to come to the area was the introduction of the national minimum wage in the late 90s. I sat on that Bill Committee, which sat through the night on more than one occasion. At that time, only one party was saying that we should have regional variations; I look across to the Liberal Benches because that was the case put by Lib Dem Members at that time. I am delighted that some on those Benches have had a change of heart.

Some 11,400 people are employed in the public sector in my area, which is some 28% of those employed in the constituency. We depend on the public sector in rural localities, so much so that there are occasions when we struggle to employ highly skilled people, be that in the NHS or in the local authority. The Government may be looking at reducing people’s salaries, but we already pay golden hellos for people to come to work in my area, such is the difficulty in recruiting quality people to the area.

The public sector pay arrangements support local and regional economies, ensure fairness and transparency, and support the whole concept of equal pay. When we introduced the national minimum wage in the late 90s, the greatest benefit came to those who were employed in the private sector. We went from scurrilously low wages of £1.50, £1.75 and £2 an hour to a wage that was recognised as being absolutely necessary to take people out of poverty. What came off the back of that? Additional money went into the local economy. It was calculated at the time that for every £1 million that went into a local economy, 39 jobs were created. What the coalition Government are considering would reverse that.

The hon. Member for Cannock Chase (Mr Burley) made his case and I would love to hear what he would recognise as reasonable pay for any kind of job. He said that between 1997 and 2007, private sector jobs went down in number. His party recognises those years as the years of plenty, so if such jobs went down in number then, where on earth are we going now? If he is dependent on the private sector to get this country back on its feet, I am afraid that he is living in dreamland.

The debate is about regional variation, so I want quickly to mention Scotland. Although Scottish Ministers set pay policy for devolved bodies, some 30,000 public sector workers in Scotland are employed by UK Departments and could be affected by the UK Government’s policy on regional pay. Furthermore, there are many unanswered questions about Scottish separation risking uncertainty for those thousands of staff employed in Scotland.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I would have liked to have been more supportive of what the hon. Gentleman is saying this afternoon, but I find the language and tone of the last part of his speech very disappointing. Does he welcome the minimum wage of £7.20 an hour that the Scottish Government introduced for public sector workers for whom they control pay?

[Mr Brown]

I mentioned that I was up through the night when the national minimum wage was introduced, and I must tell the hon. Lady that her colleague, Alasdair Morgan, who was the Member for Galloway and Upper Nithsdale at the time, was in his bed while the rest of us were battling for a national minimum wage in this country. She mentions the wage of £7.20 an hour and I am delighted that the SNP Government have followed the lead of Glasgow city council, which was where it originated.

The TUC has estimated that even a 1% reduction in public sector pay would hit 680,000 public sector workers. In Scotland, that would reduce incomes by £162 million. Again, I tell the hon. Member for Cannock Chase that if we take £162 million out of the local economy that must have an impact on private sector businesses. If we take the money out, the marketplace will collapse around it and further jobs will be lost.

I mentioned the Liberals and I am delighted that the hon. Member for Southport (John Pugh) is in the Chamber today. On 15 January this year, he said in the Financial Times that what the Government were considering was a “deliberate ploy” to fragment the public sector. He said:

“It is an unsound and untested economic theory to suggest that the national pay structure is crowding out private sector employment in the north and north-west.”

That goes for the length and breadth of this country. The proposals are a bad idea, verging on absolute insanity.