Living Wage

Pete Wishart Excerpts

Thursday 6th November 2014 Commons Chamber

[Mr Bain]

My hon. Friend is entirely correct. The proportion of company profits paid in wages has declined in the past 15 to 20 years, but it has declined particularly in the period since the financial crisis and in the four and a half years of this Government. Companies must be forward looking if they want to retain staff and if they want staff to develop. Employees want a job that becomes a career—they want progression in that firm or that profession. Paying higher wages benefits not just the employee, but the employer. Many countries are demonstrating that.

How can we act to end the low pay crisis? First, every level of government, whether a council, a devolved Government, a regional government in England through local enterprise partnerships, or central Government, should commit to using whatever policy levers they have to advance the living wage, to show an example to the private sector and the rest of society. It was therefore disappointing that the Scottish Government yesterday rejected the Labour party’s offer in the Scottish Parliament to extend further the use of the living wage through procurement policies. I hope they will reconsider. With 264,000 women in Scotland earning less than the living wage, it was wrong for the Scottish Government to reject that practical and helpful suggestion yesterday. The living wage is too big a prize for us to be deflected by partisan considerations. People expect all politicians to use every tool at our disposal to extend it to the widest possible number of people. I hope that devolved Governments, central Government and councils use those powers and achieve precisely that aim.

[Pete Wishart (Perth and North Perthshire) (SNP)]

We know that Labour’s tribal hatred of the Scottish National party is part of Labour’s problem in Scotland, but does the hon. Gentleman not recognise that the Scottish Government pay the living wage to all public sector employees? They also have no compulsory redundancies. That is the SNP’s record. In government, the Labour party could not even match the minimum wage with inflation. That is Labour’s record.

[Mr Bain]

The hon. Gentleman knows that the hand of friendship is always extended between Labour and Scottish National party Members. I have reiterated that to him on many an occasion. It is wonderful to see him in his place, but I gently point out that Labour Members strived and sat up night after night in order to introduce the minimum wage in the first place. All my Labour party colleagues in the Scottish Parliament were asking in their proposal yesterday was for the Scottish Government to do what the UK Department of Energy and Climate Change does. I would have thought that that was a commendable approach, and I hope the Scottish Government will decide to adopt it.

Secondly, the remit of the Low Pay Commission needs to be shifted from simply setting a floor for wages to examining scope for raising low pay across the board. Different models have been suggested. We could change the commission’s remit so that it offers forward guidance on the scale of future rises in the minimum wage, or, as Labour Members have suggested, we could peg the minimum wage to around 58% of median wages by 2020.

The third tool that I ask the Government and the House to consider is incentivising employers to move to the living wage using the tax system in those sectors of the economy in which that can be afforded. The evidence is that, when employers pay a living wage, they experience long-lasting benefits in productivity and reduced staff turnover. We should use all the levers of fiscal policy. We should see what tax concessions can be given to businesses if they start paying the living wage. We should pump prime the system. I believe that employers and employees will benefit.

The fourth way to solve the low pay crisis is by making the right investments in skills to ensure that people do not remain stuck in low-paid jobs for ever. Important research from the Resolution Foundation establishes that 80% of low-paid workers never escape from low-paid work. There is therefore a premium on government at all levels, whether the UK Government, the Scottish Government or local councils, using the whole range of their powers to have the skills revolution that is needed in the UK.

Never let anyone say that voting does not matter when there are families who can be helped by the Government, the Low Pay Commission and employers acting together to secure a decent pay rise for millions of people. Never let anyone say democracy does not count when by our actions the UK could become a living wage country by 2025, as the child poverty and social mobility commission recommended last month. Never let anyone say that the right to vote means nothing when it can help to deliver the right to more decent work that genuinely pays a living wage.

We know what has to be done to end the scourge of poverty pay in this country. The question is whether we have the determination to do it. In supporting the motion before the House today, I hope we can say we must and we will.