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?

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.