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Weekly Earnings

Volume 628: debated on Tuesday 12 September 2017

We need an economy that works for everyone. We are developing the industrial strategy to improve living standards and boost earning power, so that everyone in our country can share the benefits of our economic success.

With average weekly real earnings lower than they were in 2007 and with the Institute for Fiscal Studies saying that the flatlining of real wages is unprecedented since at least the end of the second world war, does the Minister accept that Britain needs a pay rise? What are Ministers doing to tackle this?

That is one of the reasons why the Government have introduced the national living wage, as a means of boosting the earning power of people at the lower end of the pay scale. I acknowledge that average earnings have been static over the past year, but it is important to recognise that people on the national minimum wage were given a 4% pay rise in April this year, and 1.3 million of those people have been taken out of paying income tax altogether.

Does the Minister agree that this Government have done more than any other to raise the wages of the lower paid in our society, including an average £1,000 pay rise per worker?

I have to agree with my hon. Friend, who makes a very good point. Indeed, the rise in national minimum wage to which I referred in my earlier answer is the best pay rise for low-paid people in this country for 20 years.

It is almost comical; we would not even have a minimum wage if it were not for Labour Members. The Minister spoke about the Government’s industrial strategy, which she thinks will help to give people a pay rise, but that strategy is absolutely at odds with the current Brexit strategy. Will the Department have a word with the rest of the Government and commit to keeping our country in the single market?

I remind the hon. Lady that this Government’s policy is to be outward-facing and achieve the best trade deal possible with the European Union, but we have to bear in mind the concerns of my constituents and hers about immigration. That has to be tackled, and it is no use the Opposition running away from that. They cannot assume that we will be able to remain in the single market indefinitely and address people’s legitimate concerns about immigration.

Average weekly earnings in Kettering are typically 5% below the national average, so anything the Government can do to cut basic levels of tax is particularly important. Does my hon. Friend agree that, because we raised the income tax threshold from £6,500 a year in 2010 to £11,500 a year, basic rate taxpayers typically pay £1,000 a year less in income tax?

I very much agree with my hon. Friend’s point. I am sorry to hear about the situation with regard to earnings in Kettering, but I am sure that the Government’s commitment to improving skills and our target of 3 million apprenticeship places by 2020 will help the people of Kettering, as they will help people all over the country.

The Government’s pretendy living wage is not available to those under the age of 25. If a 25-year-old and 17-year-old start the same job on the same day, the 17-year-old will be paid £3.45 less than their older counterpart. When will the Government ensure that all workers receive a real living wage of £8.45 an hour?

I remind the hon. Lady that the Government set the national living wage, but only after consultation with the independent Low Pay Commission. It is the commission’s view that we need to have several levels of the national minimum wage because youth unemployment is persistently higher than unemployment among those above the age of 25. The policy is really to balance maximum earning power with maximum levels of employment.

According to the Governor of the Bank of England, Mark Carney, the last time wages were stagnant for so long was 150 years ago, when Gladstone was Prime Minister, Darwin was launching the theory of evolution and trade unions were illegal. Now we know from Library figures that, year on year, wages went up under the previous Labour Government and, year on year, wages have gone down under this Conservative Government. Is it not simply the truth that workers get a pay rise under Labour and a pay cut under the Tories?

I remind the hon. Gentleman that this Government are concerned not just about pay, but about employment. If we look at the record of the previous Labour Government—or, indeed, that of any Labour Government—we see that their record on employment is poor. The record of this Government is the maximum number of jobs, with more than 1 million new jobs created, which is an important point. If he wants to talk about anniversaries, let me say that this week is the 10th anniversary of the financial crisis, and I remind him of the deficit that this Government inherited following that crash.