Living Standards

Debate between Kwasi Kwarteng and Lisa Nandy

Wednesday 4th September 2013 Commons Chamber

[Lisa Nandy (Wigan) (Lab)]

I do not need to tell most Opposition Members about the crisis unfolding for individuals, families and whole communities, including in my constituency of Wigan. It is not just that unemployment has hit communities like mine hard and had an impact on people’s living standards, it is that the unemployment figures mask the reality facing many families of cuts to pay and hours, which have had a devastating impact on their daily lives. Many Opposition Members are also familiar with the picture we are seeing in Wigan, where payday lenders have sprung up to fill empty shops on the high street and are charging extortionate rates of interest, and where the queues at food banks, such as the Brick in the centre of my constituency, are lengthening by the day. In the past eight weeks, the Brick has given out more than 1,000 food parcels—it is running out of food.

We are now in a situation where one in five children in Wigan arrive at school too hungry to learn. Across Greater Manchester and Greater London, that figure rises to nearly 50%, leaving teachers having to feed children out of their own fridges and their own pockets.

[Kwasi Kwarteng]

rose—

[Lisa Nandy]

I will give way to the hon. Gentleman. I would be grateful if he told me what he thinks his Government should do about it.

[Kwasi Kwarteng]

I am grateful to the hon. Lady for giving way. Does she not recognise that if over 10 years a Government consistently spend a lot more than they get in and leave a huge deficit, any attempt to deal with that deficit will be difficult? Does she not accept that basic point?

[Lisa Nandy]

I find the hon. Gentleman’s comment alarming. Perhaps it is time for Government Members to attend an economics course or, more pertinently, a history lesson. If we fail to learn what happens when considerable deregulation causes a global financial crisis—supported and egged on by Conservative Members—we will be condemned to repeat it.

I was telling the House about the indignity, anguish and anxiety that afflict many of my constituents, and that daily grind people down. There are a number of things the Government could do, and I want to address them in the short time that I have. First, the Government should and could take immediate action to create jobs by investing in infrastructure. We badly need new schools, we badly need new homes and, in some areas, we badly need new hospitals. Constituencies like Wigan, where the construction industry has always been important to the local economy, need that investment, not just because we will get the buildings we need but because it will provide jobs and apprenticeships for young people.

Construction used to be one of the key routes for young people leaving school to get into the labour market and learn skills that could take them beyond the sort of low-paid work that hon. Members have described. If the Government were to take action immediately, it would be a huge relief not just to me but to the 1 million young people who are out of work and who ought to be a national priority. We know that this should be a national priority, because we know what happens when young people are left out of work: they suffer prolonged periods of unemployment, insecure employment and wage-scarring effects well into their 40s. What we are seeing at the moment is limited action to create apprenticeships. I am seeing young people in a revolving door of apprenticeships, taking on work experience, internships and apprenticeships over and over again. These do not lead to a real, paid, lasting job. Government Members heavily criticised the future jobs fund for being expensive, but I say to Ministers: please recognise that investing money in young people up front is repaid in droves. It is the right thing to do morally; it is the right thing to do economically.

Many young people are on zero-hours contracts and I want to say something about the increasing casualisation of the work force, something that the workers in the Hovis factory in my constituency are rightly standing up against at the moment. People on zero-hours contracts tend to earn lower wages as a whole, and we have seen compelling evidence of widespread exploitation. I would be grateful if the Minister paid some attention to what I am saying, because this is something that affects people across the country, including, perhaps, in his constituency.

Living Wage

Debate between Kwasi Kwarteng and Lisa Nandy

Wednesday 9th January 2013 Westminster Hall

[Kwasi Kwarteng]

Will the hon. Lady give way?

[Lisa Nandy]

I will give way in a moment. Let me finish my sentence. I am unashamed to stand up for the people I represent, who, after a long week at work, do not earn enough to pay for basic necessities.

[Kwasi Kwarteng]

It is rare that we have such candour on this estate, so I am glad to hear what the hon. Lady says. I congratulate her on putting her hand up and saying that she is actually a socialist. That is what this debate is about.

[Lisa Nandy]

Forgive me, but I thought it was about the living wage and the conditions of the lowest paid in this country.

I congratulate my hon. Friend on helping to put some momentum behind an incredibly important issue. Last year, the council in my area, Wigan council, became one of many around the country to pledge to pay the living wage. That will have profound and important consequences for the 565 people who work for it, but who do not currently earn the living wage. For those who were previously on the minimum wage, the change will put an extra £40 a week in their pockets. The significance of that for the lowest paid cannot be overestimated.

I say to Conservative Members that there is no political fissure on this issue, although they seem to be trying to create one. Although the majority of councils across Greater Manchester that have agreed to pay the living wage are Labour run, Trafford council has done the same, and it is run by the Conservatives. In London, of course, the Mayor, Boris Johnson, has also spoken on this issue.

[Kwasi Kwarteng]

Will the hon. Lady give way on that specific point?

[Lisa Nandy]

No, I will not give way, because several people want to speak, and the hon. Gentleman has had his turn.

We know the difference the living wage will make for the 4.4 million people across the country who earn less than £7 an hour, and so do the hon. Gentleman’s colleagues on Conservative-run councils. We also know the difference it will make for their families. The Child Poverty Action Group has calculated that two parents on the minimum wage can meet only 82% of the basic costs of bringing up their children. Essentially, we are telling those parents, “Go to work, work hard and work long hours. When you come home, your children will still go without the basic essentials they need to have decent childhoods.” The Institute for Fiscal Studies calculates that one in four children will grow up in poverty by 2020, which is a disgrace and a scandal. In Greater Manchester, part of which I represent, 40% of children already grow up in poverty.

The failure to pay the living wage strikes at many of the Government’s objectives. Their strategy to tackle child poverty is based on trying to get parents into employment, but 58% of children growing up in poverty have a parent who works. The point is this: if work does not pay, we will not be able to tackle child poverty. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said so eloquently, on behalf of his constituent, Elaine, the living wage means that parents and children get to spend time together. That is why Save the Children and so many other children’s charities support it. There is also a clear economic case. The costs of child poverty have been estimated at some £25 billion a year. Taking action on this issue is an urgent economic necessity, not just a moral one.

I want to take on one of the points that Government Members have made, which is about helping businesses. My hon. Friend the Member for Erith and Thamesmead also alluded to that. In my constituency, the public and private sectors are completely interdependent. Some two thirds of my constituents are employed by small and medium-sized businesses. The other third—until the Government were elected—were employed by the public sector. Small and medium-sized businesses rely on the public sector; they rely on people being in work in it, in decently paid jobs, so that they can spend in their businesses and flourish. The fact that my council has taken a lead and said, “We will ensure that all the people in our employ are able to have enough money to go out and spend it in the local economy,” will be a tremendous boost to the small and medium-sized businesses that I am keen to support.

There is a growing army of people in my constituency who work part-time hours, despite desperately wanting to work for longer, or have zero-hour contracts or are in agency work. As the Joseph Rowntree Foundation’s recent report so compellingly illustrated, the divide between those in work earning poverty pay and those out of work getting poverty benefits is completely false, because those two groups are one and the same, and they are moving in and out of employment at an alarming rate. Trying to create a divide between the private and public sectors and between people in work and out of work is simply false.

Many of the solutions that have appeared with the growth in poverty in the past few years are from charities. One aspect of that rise has been the alarming and distressing growth of food banks around the Greater Manchester area. Many of those food banks are supported by supermarkets and I pay tribute to them for stepping up and doing that, but those very same supermarkets must ensure that they are not part of the problem, and that they do not refuse to take people on for anything other than part-time work or to pay a living wage. That would help stimulate the economy and meet their employees’ basic needs.

Finally, to set this in the context of what has happened largely over the course of my lifetime, we have seen the earnings of people at the bottom of society stagnate while the earnings of those at the very top have increased significantly. Between 1986 and 2012, incomes in the top 10% increased by 81%, while the bottom 10% increased by only 47%. Research has shown that if the national minimum wage had kept pace with the salaries of CEOs in FTSE 100 companies since 1999, it would now stand at £18.89 an hour.

We know that inequality is bad for society—that has been compellingly demonstrated by “The Spirit Level”—and we see it all the time in our own constituencies. Several Members of Parliament, including my right hon. Friend the Member for Tottenham (Mr Lammy) and I, have been trying to advance the case that, as in America, the pay ratios of the top two average earners in FTSE 100 companies should be published on the front page of their annual reports, so that we can see whether companies are fairly distributing reward. The trouble with that proposal is that, although it may compress and restrain wages at the top, it does not do very much for the lowest paid.

The living wage is becoming an urgent priority in Wigan, in Erith and Thamesmead and up and down the country. The living wage would be an effective and simple way of helping tackle the lengthening queues at food banks, the growing numbers of children growing up in poverty and the families that lack the means to make ends meet. My hon. Friend the Member for Erith and Thamesmead talked about ironing out some of the difficulties that have been raised by the living wage. The situation should not be allowed to continue; it is immoral and bad economics. I would like the Minister to begin by committing to at least ensuring that the living wage is extended to the Government’s employees across the board and to working with companies contracted by Government so that they also pay the living wage to their staff.