Lowest Paid: Earnings

Oral Answers to Questions — Treasury – in the House of Commons on 29th January 2019.

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Photo of Vicky Ford Vicky Ford Conservative, Chelmsford

What steps he is taking to increase earnings for the lowest paid.

Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

What steps he is taking to increase earnings for the lowest paid.

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The national living wage was introduced by my predecessor. It will rise to £8.21 from April this year. In total, it will have delivered a pay rise of over £2,750 for a full-time minimum wage worker since its introduction in 2016. While we are proud of that achievement, my hon. Friend Vicky Ford will know that in the long term, sustainable pay growth relies on improving productivity. That is why we are investing heavily in infrastructure, and are delivering a national retraining scheme to ensure that people are equipped for the technology revolution ahead.

Photo of Vicky Ford Vicky Ford Conservative, Chelmsford

What steps are the Government taking to make sure that everyone, including those on the lowest incomes, has the opportunity to save for their future?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The Government are committed to supporting savers at all levels of income, and at all stages of life. In September 2018, we introduced Help to Save, which is targeted at people on low incomes, and which Martin Lewis of moneysavingexpert.com described as

“a very clever scheme” that

“enables people possibly to have the best of both worlds”.

It pays a 50% bonus on savings of up to £50 made by working families on low incomes. We have 80,000 accounts open already, and we expect the numbers to rise substantially over the next few months.

Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

My constituency has a quarter more businesses and 6,700 more people in work than in 2010, and Harborough district has seen the fastest growth in wages anywhere in the east midlands over the last five years, but we cannot rest on our laurels. To accommodate 230 more jobs, Harborough District Council is building a new “grow on space”. Will the Chancellor come and visit it once it is complete?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The sting was in the tale. I am delighted to welcome the new jobs that have been created in Harborough through the action of the council, no doubt with strong encouragement from my hon. Friend. The Government are keeping taxes low and are helping start-ups to access the support that they need. That is why 3.4 million new jobs and 1.2 million more businesses have been created since 2010. With regard to his generous invitation, as I visited his constituency and had the pleasure of seeing what was going on there only very recently, if he does not mind, I will offer it to one of my team.

Photo of Catherine McKinnell Catherine McKinnell Labour, Newcastle upon Tyne North

Given that the Government’s own analysis shows that every region and every nation of the country will be poorer under any form of Brexit, does the Chancellor really believe that the lowest paid will be better off as a result of us leaving the EU?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The hon. Lady’s statistics are wrong. It is not right to say that every region will be worse off. Every region under every scenario will be better off. The UK economy will continue growing. [Interruption.] The UK economy will continue growing. There is no doubt, as the published cross-government analysis shows, that leaving with a deal will best protect the UK economy and will be in the interests of all our constituents. I urge the hon. Lady to get behind the deal.

Photo of Derek Twigg Derek Twigg Labour, Halton

Given what the Chancellor has said, why do large numbers of families in my constituency have to go to food banks? Many of them are on universal credit. Working families are having to use food banks in my constituency. What is he doing for them?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The measures we have taken to increase the national living wage, combined with the increases in the personal tax allowance, mean that a single person on national minimum wage will be £4,500 better off in terms of take-home pay than they would have been in 2010.

Photo of Fiona Bruce Fiona Bruce Conservative, Congleton

 The Chancellor has actually already answered my question. What assessment has he made of the effect on the lowest pay of meeting our manifesto commitment to cut personal allowance a year early, which in effect has almost doubled the tax-free allowance under the Conservatives?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

My hon. Friend is right and we are proud of that record. From 2015, 1.7 million of the lowest paid will be taken out of tax entirely and a typical basic rate taxpayer is £1,205 better off in terms of tax paid than in 2010-11. As I have just said, when we combine that with the changes to the national living wage, that is a £4,500 a year increase in take-home pay—8% in real terms, the largest increase across any part of the income distribution.

Photo of Chris Law Chris Law Shadow SNP Spokesperson (International Development)

Westminster has repeatedly failed to support Scottish National party demands to introduce a real living wage, ban unpaid trial shifts and extend rights to those in the gig economy. If Westminster will not act, when will employment law be devolved to allow the SNP Scottish Government to boost the wages of the lowest paid in Scotland?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

As I have just said twice, we have substantially increased the national living wage and reduced the amount of tax that people on low incomes are paying. With regard to the question on the gig economy, the hon. Gentleman will know that my right hon. Friend the Business Secretary is currently reviewing proposals for introducing additional employment protections to those in this sector of the economy.