Payment of a living wage

Birmingham Commonwealth Games Bill [Lords] – in the House of Commons at 12:53 pm on 11 June 2020.

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‘(1) Within 3 months of this section coming into force, the Secretary of State must direct the Organising Committee to prepare a strategy for ensuring that a living wage, as a minimum, is paid to all staff employed—

(a) directly by the Organising Committee, and

(b) by organisations awarded contracts to deliver the Games.

(2) In preparing the strategy under subsection (1), the Organising Committee must consult representatives of businesses and trade unions in the Birmingham area.

(3) For the purposes of this section, the hourly living wage for the year 2020 is—

(a) £9.30 outside of London, and

(b) £10.75 inside London.

(4) For the purposes of this section, the living wage for each year after 2020 shall be the amounts determined by the Living Wage Foundation.

(5) The Secretary of State must direct the Organising Committee to seek accreditation from the Living Wage Foundation once it is eligible to do so.’—(Alison McGovern.)

This new clause would secure the payment of a living wage to staff involved in delivering the Games and would direct the Organising Committee to seek accreditation from the Living Wage Foundation.

Brought up, and read the First time.

Photo of Alison McGovern Alison McGovern Shadow Minister (Digital, Culture, Media and Sport) 12:56, 11 June 2020

I beg to move, That the clause be read a Second time.

Before I say a few words on the importance of the living wage, I just want to say that the games are a massive opportunity for Birmingham, one of the most important cities in our country, and the west midlands. I pay tribute to all those, including my predecessor in this role, who have seen the Bill through its stages so far. Glasgow, Manchester, Edinburgh, London and Cardiff have all hosted the games at various points in their almost 100-year history. Birmingham more than fully deserves this opportunity, particularly given the circumstances under which the city has taken on hosting the games. I would like to take a moment to pay tribute to everybody in the west midlands who I know is working very hard to get ready for the games. It is a challenge made all the more difficult by the current virus outbreak, but I know they are working with complete dedication to make sure that, as much as possible, Birmingham will be ready for the games.

In a way, the situation we are in makes 2022 all the more important as a date to look forward to. I know that sport is only relatively important, whatever people from my native Merseyside might think, in comparison to the challenges we face as a country, but I know that many people will be looking forward to the Commonwealth games as a moment that near enough represents a return to the great sporting culture of our country. In many ways, the Bill is made more important by the current coronavirus context.

This week, we think about our diversity as a country. It is poignant to end this week in Parliament with a Bill that will enable one of our country’s most diverse cities to host an esteemed sporting event which, as well as competition, has at its heart a celebration of that diversity. We will celebrate the games bringing together 71 teams from around the world, and it will feature 24 disciplines from across 19 different sports. Three new sports will be introduced—women’s cricket, beach volleyball and para-table tennis—and I am sure the Minister will join me in celebrating that this Commonwealth games has the potential for more female medals than male medals, and will also host a fully integrated para-sport competition. So sport can be—I stress can be, not necessarily is—an important vehicle for diversity.

With those words of introduction said, let me turn to new clause 1. This new clause is about the living wage, and I am tempted to spend a long time debating low pay in the United Kingdom, the labour market and the importance of a real living wage for people in this country, but I think that might tempt you to intervene, Madam Deputy Speaker, given the scope of the Bill. However, I just want to point out a couple of important facts and small matters of history that have led us to table this amendment.

As everybody in the House will be aware, the national minimum wage was established in 1998, and it brought about the Low Pay Commission, which set the legal minimum wage for the first time in our country and did a huge amount to protect workers from the scourge of low pay. Unfortunately, however, the problem of low pay in this country is a light sleeper; it always re-emerges. That is why the Low Pay Commission’s work is very important, and the campaign for the living wage was established to try to improve wages for people in this country.

Meanwhile, a previous Chancellor decided to rebrand the national minimum wage as a living wage. However, the national minimum wage that we now refer to, which is set by the Government, is not the same as the real living wage, and the difference is how they are set. The real living wage, which is accredited by the Living Wage Foundation, is a rate that refers to the real costs that people pay—the real challenges that people have to face in paying their rent and for food and for all the things they need in society. The difference is not nothing. The current national living wage—the so-called living wage, as we might refer to it—is £8.72, while the real living wage for the UK is £9.30. That is a big difference for those who are working and who are struggling to put food on the table, as unfortunately many people are at the moment. It is a major difference.

Whether rebranding the national minimum wage undermined the fight against poor pay in this country is a discussion that is perhaps beyond our debate, but the point remains that many of us rightly aspire to a real living wage, and the Government and all their associated arms, including the organising committee of the Commonwealth games, should use their power to raise people’s wages. Sporting events, valuable as they are in themselves—valuable as the happiness that sport brings about is in and of itself—also have an important economic power. We know that for many regional economies across the United Kingdom, sporting events play an important part. Sport not only brings fame around the world that drives the visitor economy, but also enables a lot of people to take up roles and create jobs that otherwise would not be there. So it is highly important that we take every possible opportunity to use sport to have a positive influence on the labour market.

As I have said, low pay is a light sleeper in the United Kingdom. It is an ongoing battle to make sure that low pay in business is not perpetuated by people who are prepared to undercut each other and make workers pay the price for their business practices. That is why sport’s positive role in improving wages is so crucial. The value must be spread as widely as possible; it must not just be held by those who host major sporting events and those who are already involved, but must also reach every single person who is involved in creating these games. We want that sense of influence over the labour market, using this fantastic sporting event, which will raise the ambitions and aspirations of so many.

That leads into my final point. I will not tempt your patience, Madam Deputy Speaker, by going into the many arguments in favour of the living wage that we wish we could rehearse, but we do know that there are short-term gains for the individuals concerned when their wages are raised and that there are long-term productivity gains, too. That is because people who are better paid can afford to retrain, and they can use their time in a way that helps them to get more out of the labour market over the long term.

The last time that I was aware of it, the Treasury had significant ambitions for productivity improvements in our country. I simply say to the Minister that if the Treasury wants to improve productivity in the UK, it needs to think first and foremost about those at the bottom end of the labour market, who are earning the least. It should ask itself the question, in the context of the Commonwealth games: if we raised our sights and ambitions for people’s wages, would they not have a bit more time to engage in training and development and give themselves a better chance of earning more in future, and more broadly, would it not do the right thing for our country and improve our labour market and economy? It might seem like a big ambition for the Commonwealth Games to have such a positive impact on our labour market, but I think that in sport and in everything else, ambition is nothing to be sorry about.

Photo of Liam Byrne Liam Byrne Labour, Birmingham, Hodge Hill 1:00, 11 June 2020

I will speak in favour of new clause 1 in slightly blunter terms than my hon. Friend Alison McGovern. The message to the Minister is pretty simple: this is his last chance to tell the House that he shares our ambition that the Commonwealth games organising committee will be accredited as a real living wage employer. He has hummed and hawed about this throughout the passage of this Bill and during his time as a Minister. Today is decision time, and we are looking for a clear commitment from him that the organising committee will be accredited as a real living wage employer.

The Commonwealth games, as my hon. Friend said, is an extraordinary opportunity for our city at an extraordinary time. It will be the greatest Commonwealth games that we have ever seen. I join others in putting on record our profound thanks not only to the chair, John Crabtree, and Mr Ian Reid and the team, but to Ian Ward and Yvonne Davies and the teams at Birmingham and Sandwell councils, as well as the team at West Midlands Combined Authority, for doing the impossible—bringing forward these games in four and a half years, against a timetable of normally seven years, which is what it normally takes to put a Commonwealth games in place. They stepped up when Durban stepped out, and that is why we will be the host—because people were prepared to have that ambition for the festival that my hon. Friend spoke of.

Opposition Members know that we will be judged not just by the medals that we win, but by the lives that we change. This great festival of Commonwealth sport is also for us a great festival of civic spirit. It is a chance for us to reanimate the spirit of one of the great founders of our city, the most extraordinary civic entrepreneur of the 19th century, Mr George Dawson. He was the author of the civic gospel and he inspired six Lord Mayors, including someone called Joseph Chamberlain. He was one of the reasons why we became known as the best governed city in the world, but one aspect of his genius was that he knew that culture, like sport, should be an entitlement for all, not just a privilege for some. But that civic spirit that we want to celebrate with great pride demands that the Commonwealth games organising committee is accredited as a real living wage employer.

Why is this important? Because 571,000 people across our region are paid less than they actually need to live on each week, including, I might say, many of the carers we have been clapping for every Thursday night. Let me tell the Minister the real-world consequences of living in a place where about one in five people are not paid enough to live on. It means that, in constituencies such as mine, more than half of children grow up in poverty. Fifty-three per cent of the children in my constituency live a life of poverty. That means that during the summer holidays, the food banks run out of food—literally. In the second city of the fifth or sixth richest country on earth, food banks are running out of food because people are not paid enough to live on. I challenge the Minister to stand, as I have done, in a food bank in Birmingham and watch the little arms of a nine-year-old boy strain as he picks up the food bags to help his mum carry them home. I ask the Minister to tell me that that experience is not going to scar that child for life, and tell me how many thousands of children in our city, Britain’s second city, are in exactly that position, because so few people are paid enough to live on.

Across our region, only one in 1,000 businesses are accredited as real living wage employers. We need all of them to be accredited, and if we are to achieve that, we need to set an example and that example—the best example available—is the Commonwealth games. That is why we need the organising committee to accredit as a real living wage employer.

The time has come in this debate for a bit of honesty. We know that officials from the Department for Digital, Culture, Media and Sport have said to the organising committee, “Please don’t accredit as a living wage organisation, because it undermines the case that the Government’s so-called living wage is not enough to live on.” Well, as my hon. Friend the Member for Wirral South brilliantly rehearsed, the so-called living wage that this Government introduced is not a living wage; it is a living lie. It is £8.72 an hour, which is not enough to live on. What people need per hour to live on is not £8.72, but £9.30. I know that that 58p per hour does not sound a lot to many people in this Chamber, but over the course of a 40-hour working week, that is worth £23 a week. That £23 extra income a week makes a difference when it comes to taking decisions on heating and eating. That £23 a week extra in the pocket of my constituents lifts children out of poverty; it actually allows people to live. That is why this debate is so important.

We have offered this new clause to the Minister. I am full of hope that he will stand up and cut the argument away from me, by saying that he agrees with it and that the organising committee must now accredit as a real living wage employer. Let me warn him that, if he does not, over the next year, as he knows, I will be mounting something of a political campaign across the west midlands. If this Government refuse to take on board the new clause, I will hang that decision around every Conservative running for office next year in the west midlands from the Mayor down. This is an opportunity for the Government to do the right thing—the right thing against the judgment of history, the right thing for the people of the west midlands and the right thing for those who live their lives in poverty today.

Photo of Catherine West Catherine West Shadow Minister (Foreign and Commonwealth Affairs)

May I say how pleasing it is to hear us debating this Bill yet again, as we did in Committee when I was the shadow Sports Minister? I congratulate my hon. Friend Alison McGovern for doing such a wonderful job of promoting sport, particularly women’s sport, through her Twitter feed. One of the exciting things about the Commonwealth games is that women’s sport will be up in lights. For the first time in the Commonwealth games, we will have women’s cricket, which will provide a fantastic backdrop and a great example for the many girls who live not just in the midlands, but across the UK, as it will enable them to think of themselves as potential first XI players for the women’s cricket team and even to play internationally.

Following my visit to Birmingham, I want to put on record my thanks not just to my right hon. Friend Liam Byrne, who has already spoken today, but to the team at Birmingham City Council, who are the best example of municipal pride, putting on a wonderful show for visiting Members of Parliament. We saw all the exciting preparations going on around the stadium and the swimming pool—that was particularly exciting for me as chair of the all-party group on swimming—which will be finished in Sandwell in time for the 2022 Commonwealth games.

As the Bill has made its passage through the House, this has been a really important time to debate principles in sport: not just ticket touting and how ticketing will be done properly for the Commonwealth games, which I am sure the Minister will come to, but gambling issues and the promotion of alcohol, where the games can promote best practice in stopping some of those rather negative images seen throughout the sporting world.

It is terrific that the new clause has been tabled, giving us a chance yet again to put on record Labour’s commitment to a living wage that would be another pound more—so instead of £8.72, which is the minimum wage, it would be up to £9.30 an hour. That could have a considerable impact on the construction sector in Birmingham in the next two years. We are not necessarily talking about the top-paid engineers or those coming in as consultants; we are talking about local people and the impact that an accreditation path towards the living wage would have in the region on small businesses and on the many ethnic minority communities who run those small businesses, with a real boost for the local economy in general while our economy is going through a really tough time. We know from reading the Bank of England’s reports that our recovery and resurgence from coronavirus is likely to be compromised, which is all the more reason to give the region that boost during the construction phase.

I also want to put on record the work being done by the local trade union movement in Birmingham to press for this change. As I said, it is not just for the public sector supply chain, but in particular for the construction industry and the services that come into that industry in the next two years. I had a visit with my right hon. Friend the Member for Birmingham, Hodge Hill, who I am sure will make an excellent, important figure in the coming 12 months as he calls for the living wage. I have seen from his social media the moving images of food banks in his constituency and the importance of feeding the constituents whom he serves. A fitting aim would be that, when we open the Commonwealth games in 2022, no more people will be using food banks. When one looks at colleagues’ Facebook pages, one does not want to see images of food banks; one wants to see people being paid properly so that they can afford food.

From the testimony through local boroughs of carers across the country whose employers have been on an accreditation route to the living wage, we know that makes a huge impact—it is the difference between a worker working one job or having to work three. That also has an impact on families. We want to move towards the kind of society where a carer or a construction worker can, instead of working three jobs, work one job and get paid properly for it, giving them time to look after their family.

I congratulate the Commonwealth team up in Birmingham as well as the excellent new shadow Minister for Sport—it is great to have another woman in that role. I wish my right hon. Friend the Member for Birmingham, Hodge Hill all the very best in the coming 12 months. What a wonderful opportunity these games are, if done properly, for the midlands.

Photo of Nigel Huddleston Nigel Huddleston Assistant Whip, The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport 1:15, 11 June 2020

I thank Alison McGovern for tabling the new clause and congratulate her and Jo Stevens on their appointments to the shadow ministerial team. I look forward to working with them in the run-up to the games and on many other issues. I also thank them for the constructive way in which we have already discussed many issues, which has proven that sport can indeed be a great unifier. Long may that continue.

Members of the House may know that, as an arm’s length body of Government, the Birmingham 2022 organising committee has its pay scales set in line with civil service pay rates. All direct employees of the organising committee are paid above the level of the Living Wage Foundation’s rates. While these rates do not apply to the organising committee’s contractors, I am confident in the steps being taken across the partnership to ensure that an excellent example is being set, and will be set, on fair pay. Of course, all employers must pay at least the national living wage, which has recently risen to £8.72 for the over-25s, and the Government have set an ambition for that to rise to £10.50 by 2025, should economic conditions allow.

Let us not forget, as Liam Byrne seems to have done, that under Labour in 2010 the minimum wage was £5.93, compared with £8.72 now. The tax-free allowance was £6,475 under Labour; it is now £12,500. There is a party and a Government that have taken quite a lot of action on raising the standards and wages of the lowest paid in society, and it is the Conservatives. That is a record of which I am proud. Much as the hon. Member may wish to talk about the efforts that he would like to make to raise the living standards of the lowest paid, perhaps he would like to take action. The reality is that, in government, it is the Conservatives that have taken more action than his Government did.

Photo of Liam Byrne Liam Byrne Labour, Birmingham, Hodge Hill

I am proposing some action that the Minister can take this afternoon. He could tell us whether he is confident, as he just said a moment ago—I think “confident” was the word he used—that contractors across the supply chain will be paid more than £9.30 an hour. Will he just tell the House whether he hopes that the Commonwealth Games organising committee can accredit as a real living wage employer? A simple yes or no will be fine.

Photo of Nigel Huddleston Nigel Huddleston Assistant Whip, The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

I expect—in fact, the Government require—all employers to pay at least the national living wage. That is Government policy. I respect the right hon. Gentleman’s goals and ambitions, but I wish he would stick to the reality of what actually happens in government, rather than playing politics in terms of conversations and ambitions.

In the aftermath of covid-19, the games will be more important than ever in supporting the economic, cultural and social renewal of the west midlands. There will be more than £300 million in procurement contracts for local businesses, support for thousands of jobs and an integrated trade, tourism and investment programme, which will help to ensure that the games are at the heart of recovery efforts across the region.

Photo of Alison McGovern Alison McGovern Shadow Minister (Digital, Culture, Media and Sport)

I really must draw the Minister back. This is not a matter of party politicking; this is about whether we have food banks or not. Given what he has said, could he just answer the question about the actual real living wage that my right hon. Friend the Member for Birmingham, Hodge Hill just asked him? Does he believe that the organising committee will be able to accredit to the Living Wage Foundation and meet its standards or not?

Photo of Nigel Huddleston Nigel Huddleston Assistant Whip, The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

As I said, the Government’s policy is already for a national living wage. That is Government policy. I understand the ambition and intent of the Opposition. It is the same as the Government’s: to raise the living standards of the lowest paid in society, and that is what this Government are delivering on, instead of just talking about it.

In 2020 alone, £145 million-worth of contracts will be available, with the organising committee continuing to promote these in recent weeks through webinars involving the local chambers of commerce. The trade, tourism and investment programme will showcase the best we have to offer a global audience and strengthen our economic ties with our friends right across the Commonwealth. It will be supported by £21 million of Government funding, ensuring that we can take advantage of the economic opportunities created by the games to deliver on the ambition that Opposition Members have just talked about. The Mayor of the West Midlands, the fantastic Andy Street, also announced just a few weeks ago that the West Midlands Combined Authority had launched a new Commonwealth jobs and skills academy to improve regional skills and employment opportunities through the games. This will be underpinned by a further £1 million of public money.

Photo of Liam Byrne Liam Byrne Labour, Birmingham, Hodge Hill

I am grateful, but if the Minister refuses to answer the substance of the argument, I will keep seeking to intervene. While he is on the subject of not playing politics and celebrating the role of the Mayor, will he confirm to the House whether the Mayor of the West Midlands has written to him to ask him to ensure that the organising committee accredits as a real living wage employer? Has the Mayor written that letter—yes or no?

Photo of Nigel Huddleston Nigel Huddleston Assistant Whip, The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

I have no reason to respond to the right hon. Gentleman’s comments. I have a regular and very constructive dialogue with the Mayor of the West Midlands, who is doing everything he can to ensure that the games are highly successful. He has been absolutely pivotal in the success achieved to date, and will continue to do that for as long as he is in office—hopefully for a much longer period of time.

Let us not forget that the Birmingham 2022 games will be the first Commonwealth games with a social values charter. Accordingly, the organising committee has ensured that its procurement processes place added value on promoting those values. Added weight is being given to those companies that prioritise local employment opportunities and skills development. Alongside that, work continues to ensure that local organisations and voluntary, community and social enterprises can benefit from the opportunities of the games.

The best way to improve the economy and pay in the west midlands is to invest in skills and support business growth, which is exactly what the Commonwealth games programme will do. I hope that with those assurances, and taking into account the significant economic uplift that the games will generate for the local and regional economy, the hon. Member for Wirral South sees fit to withdraw her new clause.

Photo of Alison McGovern Alison McGovern Shadow Minister (Digital, Culture, Media and Sport)

Having listened to the case made by my right hon. Friend Liam Byrne, I simply do not know why the Minister would not get to his feet and just say yes. This is not about some political to and fro; it is about the important distinction between what has been sold to people as a living wage and what is in fact a wage that is calculated on the basis of people being able to live on it. That is the difference; that is what we are arguing about. It is a simple choice: food banks or not. I think the answer is not.

The social values charter that the Minister mentions is welcome, if woolly. It is a good ambition, but it does not really commit the organising committee—it certainly does not commit them to enough, and it does not commit them to the specifics. People will judge the games by not only how successful they appear but the reality of their lives when they have been able to participate in them. As I withdraw the clause, with your leave, Madam Deputy Speaker, I say simply that this will not end here. We will not stop going on about this, because the money in people’s pockets is of the most profound importance. Until the Minister is able to make that commitment, we will go on, but I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.