My full speech today is here: 3.35 pm
Guy Opperman (Hexham) (Con):
I wholeheartedly congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on securing the debate and I thank the Backbench Business Committee. Some would say that Parliament does not often have important debates, but with the debate on Iran and now this debate on the living wage, I cannot think of a more important day to be in Parliament. I am delighted to be here to support my hon. Friend.
I was delighted, too, to have been part of a briefing that took place with the all-party group on poverty this morning with the good people from the Living Wage Foundation and Citizens UK, who came to the House of Commons and met several hon. Members, from many different political parties, to brief them on the living wage and to hear some of their experiences. I thank Emma Kosmin and Stefan Baskerville for coming in, along with the Rev. Angus Ritchie, Mike Kelly and Nana-Ben, who is the cleaner I mentioned earlier from the Department for Transport.
This is not just a debate on the living wage but a debate on tax thresholds and tax credits, but one must start with the wonderful news that the living wage has risen again this week. I was pleased to see the Mayor of London going to Kaffeine, a coffee shop in Great Titchfield street, to celebrate and support it. The Evening Standard pictured him with a large cake, which I am not sure is quite the message we are trying to get across, but the point is that he has been an enthusiastic and vocal supporter of the living wage, and quite right too.
I am sure the Minister will make the point that it is fantastic that it is this Government—acting as a coalition, to be perfectly fair—who have raised the tax threshold, which makes a massive difference to the pennies and pounds in the pockets of people earning a living wage or a minimum wage. That is the first direct impact. Clearly, there is a legitimate and correct debate on tax credits and how one takes them forward. I will leave others to discuss that in more detail, although I did set out my views on that in fairly lengthy detail in an article for the New Statesman in July 2013.
Stephen Timms (East Ham) (Lab):
I enjoyed reading that article, in which I think the hon. Gentleman described himself as an old-fashioned left winger. I think he would acknowledge that the advantages of an increase in the tax thresholds he describes are significantly undermined for people on the lowest incomes by the fact that tax credits are withdrawn to such a large extent.
Guy Opperman:
I am delighted that the right hon. Gentleman, who sits on the Opposition Front Bench, is taking advice and instruction from me, a humble Back Bencher in this House since only 2010, but I take his point. The Government clearly need to address how taxing the individual is dealt with to avoid the problems he identifies so eloquently. I do not think it is quite as simple as he sets out. I accept and endorse the approach of the Chancellor: I think the fundamental is the tax threshold and then how we deal with tax credits. The harsh reality, as the right hon. Gentleman will know from the article he read, is that we have the bizarre situation where the Government step in and provide tax credits to the tune of approximately £4 billion for a variety of individuals when they should be encouraging an increase in wages and taking away tax. I will, however, leave that debate for another day.
We can provide local leadership. I am proud to wear the badge of the Living Wage Foundation, and I am a living wage employer in the House of Commons. I would like the foundation to accredit MPs who pay the living wage in order to incentivise us not only to talk the talk but to walk the walk. In addition, particularly in living wage week, I would urge all Members, if they have not done so already, to visit the living wage employers in their constituencies. I have met several of mine.
My hon. Friend the Member for Aberconwy (Guto Bebb) asked about small employers, particularly in rural locations, but, as is well known, the Federation of Small Businesses supports payment of the living wage on a voluntary basis. I can give some local examples. Aquila Housing, in Gateshead, and several churches in my constituency have shown the benefits, and Mike Joslin, an employer in the north-east and across the country, would eloquently set out the benefit it has brought to his relatively small business. However, my best example is the fine coffee shop Tea and Tipple, in Corbridge, which has barely three or four members of staff. When the snows fell—they fall through to May in Northumberland—his staff fought through the snow to get to work and open the coffee shop. There was clearly a sense of camaraderie, loyalty and commitment to the business that he might not have seen had he not been a living wage employer. He went the extra mile for his staff, and they went the extra mile for him.
Of course, we should be pushing the large employers too. Today, I met Mike Kelly of KPMG, and the human resources directors of companies such as Barclays. We need to ask the large employers in our cities and regions why they are not living wage employers. When KPMG did the transfer in 2005-06, it found that approximately 700 members of staff were not being paid the living wage, but when it compared the turnover of non-living wage staff with that of living wage staff, it found that the turnover dropped from 47% to 24% in one year.
In my New Statesman article, I cited the example of Costco. Craig Jelinek, its chief executive, who pays the living wage in America, said:
“We know it’s a lot more profitable in the long term to minimise employee turnover and maximise employee productivity, commitment and loyalty.”
I think he is right. Last year, when I spoke to Dominic Johnson, Barclays’ HR director, he was clear that it made sense for business.
When I go to my local Barclays in Hexham or any other branch, I am told that when cleaning staff are paid the living wage—traditionally it is the cleaning staff who slip through the net—capitalism takes over and, market forces being what they are, everyone wants to be a cleaner for Barclays, staff turnover drops through the floor, everyone feels much more valued and the offices are cleaned faster. Bizarrely, therefore, paying people more ends up costing the business less, and the quality of the product—the cleanliness of the offices—is improved.
There are, then, examples from big businesses and small businesses, and I am pleased that the public sector and the various Government Departments are leading the way. Some are quick to criticise Departments for not moving quickly enough, but it is extraordinarily difficult for some—the NHS, for example, has a vast array of subcontractors and private finance initiative contracts—to change.
But if I can move on, in the limited time we have, to allow others to speak—
Madam Deputy Speaker (Dame Dawn Primarolo):
Order. Perhaps I can give the hon. Gentleman some guidance about how limited the time is. We have to conclude the debate so that we can hear the wind-ups within 50 minutes. I currently have seven other speakers, so I am going to ask people to be disciplined, so that nobody is squeezed out. The hon. Gentleman might bear that in mind, given that he has already been speaking for 10 minutes.
Guy Opperman:
I will take barely a minute more, Madam Deputy Speaker.
The living wage is a campaign that unites all faiths. It unites Christians, Muslims, Jews and those of other faiths, and quite rightly so. When this was first looked at, it was decided that it was an idea whose time had come. I cannot endorse that more strongly.
You can read all the debate here: http://www.parliament.uk/business/publications/hansard/commons/todays-commons-debates/read/unknown/692/
