On the 21st July 2015 the Bishop of Peterborough, the Rt Revd Donald Allister, spoke during the debate on the Budget Statement. The Bishop welcomed the new National Living Wage and asked for greater transitional support for employers and employees, as well as careful attention to phasing in the reduction in tax credits.
The Lord Bishop of Peterborough: My Lords, I begin with two heartfelt thank yous to the Government: first, for replacing the minimum wage with the new living wage. I and others on these Benches argued for a living wage in the last Parliament. Now we have it and I am grateful. Secondly, I thank the Government for spreading the pain of further austerity over three years rather than two, and so reducing the depth of the cuts in each year. On behalf of these Benches, I say thank you.
The Church of England’s General Synod decided some years ago to pay its lowest-paid employees at the level of the living wage. That has not been entirely straightforward. As the media have picked up, a few cathedrals in particular have taken longer to achieve this than many of us would have liked, but it is now happening. One of the complications has been ensuring that our contractors and subcontractors pay their staff at the right level. That has to be written into contracts, which takes time. Then monitoring and enforcing that decision can be difficult.
I am very conscious of employers across the country for whom this will not be easy. In Peterborough, for example, there are many people on, or just above, the current minimum wage, often working sessionally or seasonally in warehousing, distribution, crop picking or catering. Those people should be paid a living wage but they are not always well represented or organised, so I hope this good change will be monitored and enforced. I hope, too, that those of us who can afford it will be willing to pay a bit more for our vegetables, coffee or online purchases.
Although I fully support the Government’s clear aspiration to have a higher-wage economy, in which benefits should be much less necessary for people in work, the process of getting there and the situation of the weakest members of the working population during the transition are important. I accept that tax credits and other benefits cannot be afforded at the level at which they have been paid. But sudden significant reductions will always hit the poor hardest. In particular this time, couples with children where only one partner has a full-time job and single parents are likely to be hard hit. I urge the Government to look at ways of phasing-in these cuts, or finding other ways of supporting those people.
Yes, please help the poor out of poverty. Yes, please let us have a higher-wage economy—though local councils and other public bodies might need a bit more help to enable them to pay the new living wage. But please, as we make the transition, let us also support those employers and employees at the sharp end.
The Commercial Secretary to the Treasury (Lord O’Neill of Gatley) (Con): …. Lastly, and without enough time to focus on the very interesting comments made about work and welfare, I think it is openly acknowledged that to introduce a policy to deliberately encourage an implied higher minimum wage—announced as a national living wage—carries a risk of some costs to employment. Indeed, the OBR said in its own independent analysis that it would directly lead to the loss of 60,000 jobs, although it added that in the context of the Budget Statement and all the other initiatives, this would be more than offset by the distributional effects of so many people receiving higher incomes, as well as a number of the other policies…..