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Government must crack down on living wage, say MPs

Too many employers – particularly in the retail sector – are using loopholes in the national living wage to drive down conditions and take-home pay, MPs said in a House of Commons debate yesterday.

Siobhain McDonagh

Siobhain McDonagh

Siobhain McDonagh in the House of Commons yesterday

The debate was scheduled by Siobhain McDonagh, Labour MP for Mitcham and Morden, to mark the Living Wage Foundation’s Living Wage Week, which runs until 5 November. It was supported by more than 40 MPs, including former business minister Anna Soubry.

Addressing her fellow MPs, McDonagh said retailers are “racing to the bottom and cutting everything they possibly can to save a few pennies here and there”, to offset the rising wage bill.

She used the examples of the recent consultation over staff pay and conditions at Marks & Spencer, as well Caffè Nero’s decision to stop giving baristas free food on their lunch breaks.

“The government needs to crack down on the actions of unscrupulous employers, who have used the introduction of a higher minimum wage to cut whole staff pay,” she argued.

The national living wage came into effect in April this year and is set to rise to £9 by 2020. 

Meanwhile The London Living Wage is to increase by 35p an hour to £9.75 from next year. Nearly 3,000 businesses, including Oliver Bonas, are signed up to the voluntary Living Wage, which is set by the Living Wage Foundation.

Outside London, which accounts for a third of businesses paying the rate, the rate is increasing by 20p an hour to £8.45.


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