Tax Credits (Working Families)

Simon Hoare Excerpts

Tuesday 7th July 2015 Commons Chamber

[Mr Roger Godsiff (Birmingham, Hall Green) (Lab)]

First, may I congratulate the hon. Member for Ayr, Carrick and Cumnock (Corri Wilson) on her excellent maiden speech, which I am sure will be the first of many?

A lot of my constituents are low-paid workers. Many are paid the minimum wage and some receive even less. They work very long hours and some have two or three jobs to bring in enough money to feed their families and pay the bills. Even then, some of them cannot afford to put food on the table seven days a week and have to endure the humiliation of going to food banks with their families.

These low-paid workers are not shirkers or skivers, lazy or feckless; nor, as a matter of interest, are they the people who caused the financial and banking crisis in 2008. If the curtains on their houses are drawn at 7 or 8 in the morning, it is not because they are skiving or being lazy, but because they only got home from work after midnight. These are the people in my constituency who rely on working tax credits to top up their poverty pay, and it is they who suffer if tax credit support is reduced or abolished.

I agree with the Prime Minister that employers should pay the living wage, but many of them do not and will not unless they are forced to do so. If the Government are serious and want to save money on tax credits, they must turn the statutory minimum wage into a statutory living wage. Indeed, the Prime Minister should understand that argument, because Steve Hilton, who was his adviser until recently, has advocated exactly that. I hope very much indeed that that is what the Government will do. I suspect that they will offer incentives to employers to pay the living wage, but by doing so they would just be subsidising employers—they would not save money.

In a different world we would have unions that were strong enough to bid up their members’ wages, but they are not strong enough. Conservative Members smile and laugh whenever unions are mentioned. Unions have a traditional role of negotiating better terms and conditions for their members. The Conservative party hates trade unions. Indeed, it has made it absolutely plain that it will bring in even more draconian restrictions on them, so trade unions will not be able to do their traditional job of bidding up wages. Therefore, it is down to the Government—if they are serious—to turn the minimum wage into a living wage. Is that what Treasury Ministers intend to do?

[Simon Hoare (North Dorset) (Con)]

Will the hon. Gentleman give way?

[Mr Godsiff]

No, I will not take interventions.

The Government could set an example by insisting that the contractors they use pay the living wage, not the minimum wage. That would be positive. Treasury Ministers could set an even better example. When Her Majesty’s Revenue and Customs, which is the Treasury’s responsibility, put out its cleaning contract to ISS and was offered a contract price based on either the minimum wage or the living wage, why did it choose the minimum wage? It could have set an example by choosing the living wage, but it chose the lowest common denominator. Low pay is a national scandal. It is not the fault of hard-working, low-paid families in my constituency or anywhere else in the country. It is the Government’s responsibility to address this issue.