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Payment of a living wage

Birmingham Commonwealth Games Bill [Lords] – in a Public Bill Committee at 9:45 am on 17th March 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 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.”.—

This new clause would direct the Organising Committee to seek accreditation from the Living Wage Foundation.

Brought up, and read the First time.

Photo of Catherine West Catherine West Labour, Hornsey and Wood Green

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

The new clause deals with the living wage for Birmingham and the west midlands. As we heard on Second Reading, the living wage is popular in the region and has been pushed by campaigners and trade unions for quite a while. During a recent visit to Birmingham, I heard evidence from staff of the Trades Union Congress, and I understand that the living wage would be very welcome from the point of view of the workforce. For example, a number of people working in the leisure industry currently do not even receive the national minimum wage, let alone the real living wage. We know that the real living wage makes a huge difference to the lives of working people and that, if staff receive the living wage, they need only work one job, whereas many people—particularly women—on the minimum wage or less have to work two to three jobs, which puts enormous strain on their families and their mental health.

The new clause is very simple. It seeks to introduce the living wage for all staff directly employed in the running of and preparation for the games and for subcontractors. I thought about inviting the Living Wage Foundation to give evidence to the Committee, but I felt that, on balance, we all know what the living wage is and so did not need that evidence. Those of us who know members of the workforce who have gone from being on the minimum wage to being on the living wage know that it makes an enormous difference.

The new clause seeks to ensure that the prosperity that the games will bring—not only in July 2022, but in the run-up to the games—will have an uplift effect in the region. It aims not only to promote things such as women in construction, more apprenticeships and safety in the workforce and in the works going on in and around the region for the games, but to promote that concept as a legacy of the games. For example, we all want to see more grassroots sport as a result of the games. Introducing the living wage would push up the hourly rates of people working in the leisure industry, such as swimming and athletics teachers or coaches in the personal training industry. We would be doing an enormous service to not only sport and leisure in general, but, importantly, the region of Birmingham and the west midlands, which, as Members know, has the lowest level of accreditation in the UK.

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

I thank the hon. Lady for tabling the new clause. This issue has been raised several times during the Bill’s passage, and the Government share the intent to make sure that we become a higher-wage economy. I concur particularly with her comments on the hospitality and leisure sector. However, I am confident that the games are setting an excellent example on fair pay. As an arm’s length body, the Birmingham 2022 organising committee’s pay scales are set in line with civil service pay rates, and all direct employees of the organising committee are therefore paid above the Living Wage Foundation’s rates.

Of course, all organisations awarded games contracts will be required to pay at least the Government’s national living wage, which is set to receive its biggest cash increase ever, rising by 6.2% from 1 April 2020, which will mean a pay rise of almost £1,000 for around 2 million workers across the UK. As my right hon. Friend the Chancellor of the Exchequer said in his Budget speech last week, the Government are also targeting the national living wage reaching two thirds of median earnings by 2024, provided economic conditions allow. On current forecasts, that means a living wage of more than £10.50 per hour.

The Chancellor also announced that the national insurance threshold will be increased from £8,632 to £9,500 from April. Taken together, the changes to the national living wage, income tax and national insurance mean that someone working full time on the minimum wage will be more than £5,200 better off per year than in 2010.

Let us look at the wider picture of huge Government investment in Birmingham and the west midlands. Such investment will see thousands of jobs created and will lift skills and training opportunities across the region. Games partners continue to develop plans to maximise the employment, training and volunteering opportunities that the games will give rise to, ensuring lasting and meaningful benefits for those living and working in the region.

We should remember that the Birmingham 2022 games will be the first Commonwealth games with a social values charter. Organisations bidding for games contracts will be asked to demonstrate how they support delivery of the charter—for example, by promoting local employment opportunities and skills development. The games will provide a huge uplift to the local and regional economy and provide fantastic employment, training and skills development opportunities for local people and businesses. Although I understand the intent of the hon. Lady’s new clause, given what I have outlined, I ask her to withdraw it.

Photo of Catherine West Catherine West Labour, Hornsey and Wood Green

I accept the Minister’s arguments about the introduction of increases to the minimum wage, but I do not accept that it would be as good as having the living wage and living wage accreditation, with the uplift that that would give to the region as soon as the Bill is passed. I do not agree that the new clause should be withdrawn, but I do accept that I will have a further opportunity to raise this important matter during the passage of the Bill.

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden

Are you withdrawing the new clause at this stage?

Photo of Catherine West Catherine West Labour, Hornsey and Wood Green

Yes. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.