Making work pay

Jan RoyallJan Royall on our country’s dire need to make the Living Wage a reality for families and individuals

This week is 'Living Wage Week' and I am delighted that Ed Miliband has announced that the next Labour government will introduce 'Make work pay contracts', as part of his mission to spread the living wage across the country and among private and public service employers.

This is good for the country in terms of wealth creation and saving money on welfare bills. It is good for business, as KPMG have observed, because there is clear evidence that staff retention rates and staff morale are higher. And it's good for individuals – the thousands of hard working people whose living standards have been squeezed to such an extent that some have taken on second jobs to the detriment of family life. For example, the mums who do two or three cleaning jobs in different parts of London – constantly juggling childcare but, despite the toil, still having to resort to loan sharks from time to time. Others are turning to food banks. The cost of living, while a challenge for millions of people, is for them a real crisis as they struggle to keep things together. As Save the Children has said, work isn’t paying enough.

I have had many meetings and conversations about food banks, locally in the Forest of Dean and elsewhere in the UK. People are staggered not only by the growing need for such outlets in the twenty first century – the number of people relying on food banks has tripled over the past year – but by the fact that many of those who use them are actually in work. 

Education Secretary Michael Gove has suggested that those who resort to food banks do so because they can't budget properly. I would invite him to one in my local area for a taste of reality. With prices rising and wages stagnating, an unexpected bill, for say fixing the fridge or replacing the washing machine, can tip a working family over the edge, causing them to swallow their pride in order to feed their kids. This is life as now lived for too many people in both urban and rural areas.  

Alan Milburn, in his recent report on social mobility, said that two thirds of poor children are now from families where at least one parent was working and in three out of four of those cases, at least one of the parents was working full time. If more companies and organisations were to pay the Living Wage, the lives of those families could be transformed.

One of the great things about the Living Wage is that it gives people dignity. They feel valued by their employer and earn enough to live not just to survive. 

I am proud that, having taken up the issue with the House authorities, the Lords swiftly became a living wage employer. I hope also that Parliament will soon be accredited by the Living Wage Foundation as, in my view, every publicly funded body should be. In my office at Westminster, we pay our two trainees the Living Wage. We do so, because it is the right thing to do. But also because it means young people from outside as well as inside London and those who cannot rely on support from the Bank of Mum and Dad can apply. Social mobility cannot improve if opportunities are limited to the children of parents with means.

The Living Wage is not a panacea for all of the problems our society and citizens face but it would make a real difference to the lives of many. The Make Work Pay Contract is a clear example of the way in which Ed Miliband would govern the country, working for all of our people not just the privileged few.

Baroness Jan Royall of Blaisdon is Labour’s Leader in the House of Lords

Published 6th November 2013

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