Siobhain McDonagh: Tories’ living wage con hides the reality of low pay

A few weeks ago Iain Duncan Smith resigned because he said that the Tories don’t care about poorer people because poorer people tend not to vote for them. His government has found this stereotype of what Teresa May called the “nasty party” hard to shift.

That’s why, to challenge this image, George Osborne last year announced his National Living Wage, increasing the minimum wage to £7.20 per hour, from 1st April 2016.

The Chancellor claimed that he was introducing these changes because he was committed to a “higher wage” economy.  He said, “it can’t be right that we go on asking taxpayers to subsidise businesses which pay the lowest wages” and that “Britain is getting a pay rise”.

In his Budget last month, the Chancellor claimed that 2.9 million workers will gain from the higher minimum wage – but it seems the Government is all style and little substance. It has introduced a radical policy, but without any intention to see it through and enforce it.

In fact, despite the rhetoric, we know that big high-street names including the likes of B&Q are cutting staff pay by introducing new contracts – in a move to offset the new minimum wage.

I was shocked when a B&Q employee came to me with a copy of his new contract and his wage slip. Together we calculated that he would lose up to £50 a week – that’s about £2,600 a year, after the National Living Wage is introduced. This is because B&Q are slashing Sunday and Bank Holiday pay, summer and winter bonuses, London Weighting and other staff allowances.

Without being unionised these new contracts were introduced via the “National People’s Forum”, which offered no real consultation.

B&Q employees said they have been threatened with dismissal should they come forward or if they refuse new contracts which cut their terms of condition.

Since I launched a campaign against these unscrupulous actions, employees from around the country have come forward to say that they too are affected.

They are all hard-working people who are trying to make their lives better. Some are single parents. Many of them have families to support. And most are loyal employees who have worked at the company for over a decade.

These are the hard working families who all parties claim they are working for. People who take pride in their work. Who want to give the best to their families. Those who just get on with it.

These people rightly deserve a National Living Wage on top of their existing staff pay. But under the current administration of the policy, they will be getting a pay cut. It seems that their reward for their hard work and years of service is a kick in the teeth.

I have raised this issue many times now with the Government, but time and again it seems the government is in denial.

I asked the Prime Minister directly a few weeks ago what he would do about this situation. But in response I just got the same old rhetoric, all style but little substance.

I then spoke at length during the Budget debate, and am glad that the Business Minister, Anna Soubry, took an interest in the matter. I hope that my meeting with her will inspire the government’s attention. But I am not holding my breath.

I am deeply concerned about this issue because the government is preaching one thing while doing another.

Companies like B&Q, who posted an 18 per cent surge in profits last year, are getting away with far too much. They could cut shareholder pay, or invest in productivity instead.

And they could also use the yet more generous cuts to corporation tax announced by George Osborne to offset the cost. 

This issue will not go away. Large companies like B&Q will continue to treat their employees badly, until the Government steps in.

The Tories’ moral credentials have taken a hit with the resignation of Iain Duncan Smith. Now’s their chance to regain some integrity by doing what is right for low paid workers.

If you’ve been affected by any of these issues, email Siobhain on [email protected]