Guy Opperman: the Conservative case for a living wage

For too many people in our society, a hard day’s work no longer means a fair day’s pay.

As a Conservative MP, I believe that lower taxes stimulate growth and jobs, that smaller government is invariably better government and that governments must “ensure that work always pays” by making sure those in work are better off than those on benefits. I also believe in hard work. Yet, for too many people in our society, a hard day’s work no longer means a fair day’s pay.

Ever since the financial crash of 2008, the topic of “pay” has been dominated by the pay of those at the top. From golden hellos to golden handshakes, the discussion has often ignored those at the bottom. I sit on the advisory board of the High Pay Centre, alongside the Green MP, Caroline Lucas, and the TUC general secretary, Frances O’Grady. At the High Pay Centre, we have been making the case for corporate responsibility and pay restraint in the boardroom. It is now time for us to make the case for fairer pay at the bottom, too.

Britain is a country in which some workers earn so little that the government has to step in and provide aid. That is the system of tax credits we have; a subsidy by any other name and a £4bn one at that. How and why did we let it become acceptable for a full-time job not to pay enough to live on? The living wage isn’t just a wonkish idea – it’s the political world catching up with many Britons’ reality.

When the national minimum wage was adopted in 1998, many were sceptical. The fear was that it might hit the number of jobs available. There is ample evidence to show this is not the case. For instance, in 2012 the Institute for Social and Economic Research at the University of Essex studied the minimum wage and “found almost no evidence of significant adverse impacts on employment”. Today, the minimum wage is supported by all three mainstream parties and rightly so. Yet, for many, the minimum wage does not represent a fair wage.

There are some who have the same scepticism about the living wage – that it could penalise business and hold back growth. It may just be the old socialist in me but when did it become a hindrance rather than a duty for a business to look after its employees? The days of William Armstrong and Joseph Rowntree building houses for their workers and ensuring a decent standard of living may belong in a bygone age but surely some of those principles should still apply?

Some businesses already embrace the principle. In the US, the wholesale retail giant Costco has broken the mould: it pays its staff $11.50 an hour (£7.50), compared to the federal minimum wage of $7.25 (under £5). Costco’s chief executive, Craig Jelinek, made the point succinctly: “We know it’s a lot more profitable in the long term to minimise employee turnover and maximise employee productivity, commitment and loyalty.”

Businesses and organisations that have committed to paying the living wage include everyone from the big corporate beasts such as Deloitte and Barclays to Aquila Way, a housing association in Gateshead, north-east England. I have met with some of these accredited firms and they all talk of improved morale and productivity. One firm increased staff retention in one department by 65 per cent.

If those on the right won’t listen to the arguments of an old left-winger such as me, then, at the very least, they should listen to the HR director of Barclays, Dominic Johnson, who says “it makes sense for business”. The living wage doesn’t just work for business, it makes sense for the government, too. IPPR and the Resolution Foundation have found that even if only those employers that could easily afford to – the so-called “non-low-wage employers” – paid the living wage, the savings to the Treasury each year would be in the hundreds of millions. This would be the result of increased tax receipts, increased National Insurance contributions and savings on benefits such as tax credits.

Yet even enthusiasts have to accept that there remains a lack of detailed analysis of the effects of a living wage on individual sectors. I will be working hard to ensure that the government takes seriously the conclusions of the Living Wage Commission, chaired by John Sentamu, the Archbishop of York. It is vital that we monitor the economic effects of the living wage and demonstrate the benefits and the negatives of paying a living wage.

David Cameron was right when he said that here “is an idea whose time has come”. The living wage started off as a belief and became a campaign. It is now time for us in Westminster to return to our constituencies and make the case for our individual businesses to start paying the living wage.

Guy Opperman is the Conservative MP for Hexham

A London bus. Photograph: Getty Images.

This article first appeared in the 12 August 2013 issue of the New Statesman, What if JFK had lived?

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Labour's Eurosceptics should steer clear of loaded language

Phrases such as "wholesale importation" leave the impression Labour will not speak for migrant workers.

Nothing reflects Britain’s division over Brexit than the Labour party. Do we want soft or hard Brexit? What do we prioritise? The fractures within the party’s ranks is a portrait of the divisions splintering the country.

Labour’s ambiguity over Brexit helped it in the general election in appealing to everyone. It convinced Remain voters that they could hold the Tories to account while promising the Leave voters that the referendum decision would be respected. But now clarity is needed. 

The Labour leadership seems to be angling for a hard Brexit, wishing to leave the single market and customs union on the grounds that this honours the wishes of the 52 per cent. Ironically, they are at odds with everyone in this situation, from the general public – who favour access to single market over immigration controls – to a poll in LabourList showing that 72 per cent of readers prioritised inclusion within the single market.

Jeremy Corbyn's lukewarm attitude to the EU is well documented. If the Labour Party are serious about their public ownership plans for the railways and energy, it’s likely they envision it being made difficult within the EU because of directives which create competition between the state and the private sector. There are unexplored alternatives to this, as seen in Germany and Italy where private companies are made and run the industries with the states acting as the major shareholders of the company. However it’s unlikely to see the hard left ever accepting this, given its disdain for both the private sector and the idea of it interacting with the state to deliver services.

But this is not all that should trouble progressives regarding the Labour leadership’s stance on Brexit. During a recent Andrew Marr programme in which he appeared on, Corbyn claimed that mass immigration had been used to denigrate the conditions for British workers, saying that there was a “wholesale importation” of workers from parts of Europe which would then undermine the rights of British workers. It’s an argument that has been regurgitated by British politicians consistently in recent years – but from the right, not the left.

The idea that migrants are taking British jobs and depressing wages does not hold up to evidence at all. The London School of Economics carried out a research which illustrated increases in migration from the EU did not result in depression of British wages. That’s not to suggest that wages have not stagnated, but rather the trend is linked to the financial crash in 2008, rather than migration. Corbyn’s defenders insist that there were no deliberate racist overtones in his argument, and that the villains are employers deliberately taking advantage of an easily exploited labour market. But the manner in which Corbyn framed his speech was worrying.

The reason for this is that Brexit has created an unbelievable sense of uncertainty, insecurity and fear amongst migrants. Their position in society is now being contested by politicians with different stakes in society to them. Xenophobic abuse – legitimised as an acceptable part of political discourse by Brexit – has been climbing swiftly. Immigrants are seen as threats to British jobs and that is a narrative consistently drummed out – not just since last year but for possibly the past decade.

This is not to say that Labour should not address how some employers might seek to cut costs by hiring foreign workers on a cheap rate. But phrases such as “wholesale importation” or even using the heavily demonised “mass migration” simply sketches the idea that Labour are swinging towards the hard Brexit voters, and in doing so leaving migrant workers to be defended by no one. If the intended idea was to castigate employers, it simply entrenched the idea of immigration as a problem. Rather than bringing British and migrant workers together, you know with that whole “workers of the world unite” idea, Corbyn’s framing of the argument keeps them pitted against each other.

If Brexit has shown us anything it’s that language matters in politics in how it transmits its message to people. Slogans such as “take back control” were attacks on multiculturalism and immigration, stoking white nationalism, even if the Leave campaign insisted it wasn’t about that. Likewise, Corbyn might insist it wasn’t about migrants, but his message sounded a lot like he was blaming freedom of movement for the suppression of wage growth in Britain.

Needless to say, Labour need a rethink on what kind of Brexit it pursues.