National Minimum Wage

Part of Opposition Day — [6th Allotted Day] – in the House of Commons at 2:59 pm on 15th October 2014.

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Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries) 2:59 pm, 15th October 2014

I very much welcome today’s debate on the minimum wage, because it affects millions of people across the UK, including thousands in my own rural constituency, and I think that it, more than any other policy, has the potential to tackle poverty.

In-work poverty is perhaps the most stark symptom of the deep income inequality that is increasingly the hallmark of British society, but people in low-paid jobs have been badly let down by successive Governments, who have failed to ensure that the minimum wage keeps pace with the cost of living. We need to recognise that that failure has had a huge impact on people in low-wage jobs and ask ourselves how we can change the minimum wage into a living wage.

If the minimum wage had kept pace with inflation, those in low-paid jobs would be more than £600 a year better off now: they would be earning £7.48 an hour. That is still short of the living wage, which is currently calculated at £7.65 an hour, but it is a lot closer and makes the gap between a minimum wage and a living wage a lot more bridgeable.

I intend to support the Labour motion because any commitment to increase the minimum wage is a step in the right direction, but it is important to put the proposal in perspective and acknowledge that it will not be a living wage. If we use existing forecasts of inflation, we will see that the living wage is projected to rise to £8.57 an hour by 2020, so what is being proposed today falls well short of a wage that someone can actually live on. I would also urge a note of caution: we have no means at all of knowing whether those forecasts are right. They might be higher or lower—the Office for Budget Responsibility does not have much of a track record in accurate forecasting to date—so we have absolutely no way of knowing what a phased increase of the minimum wage to £8 an hour by 2020 will mean in real terms.