Andrew Smith MP

On your side in Oxford East

A Living Wage can make all the difference

CHERWELL_2013.jpgUnder the coalition we have seen the most rapid rise in the cost of living in the post war era.

Wages have failed to increase in line with inflation year on year since 2010. This is particularly true in Oxford where the cost of living is amongst the highest outside London, and many people on low incomes are bringing up families in poverty. 

Oxford University is one of the largest employer in Oxford, and forms a hugely important part of the local economy. That is why I fully support the Oxford University Student Union's campaign to encourage all university departments to pay their staff the Living Wage. Although Oxford University policy already ensures that all of its direct employees are paid a Living Wage, sadly subcontracted staff (for example, cleaning staff, who we all know do an excellent job) are still paid at the lower rate.

I thoroughly applaud the departments that have signed up to pay all staff the Living Wage, namely the Biochemistry, Mathematics, Physics and the Blavatnik School of Government. This is very encouraging and it is absolutely right that they are recognised for their efforts in this way by OUSU.

However I think it is vitally important that Oxford University as a whole, which is a symbol for excellence and innovation throughout the world, leads the way in ensuring that all staff are paid a fair wage that reflects the true cost of living in this area. I very much hope all university departments will respond to OUSU's calls for wages to be increased when the contracts are renegotiated. 

Someone earning the Living Wage is not only helped to a better standard of living, but also to an improved quality of life. The Living Wage can make the difference between a family that are living in poverty and a family that are making ends meet. That is the kind of positive impact the Living Wage can make. There is also a strong economic argument for introducing the Living Wage, as studies have shown that workers paid the living wage tend to be better motivated at work, less likely to be reliant on benefits and are more likely to spend the extra money in the local economy.

I am very proud of what the Labour Party has achieved in the past in improving living standards and employment conditions. With the last Labour government we introduced the minimum wage despite significant opposition, and it is now impossible to imagine a world without it. Locally we are now seeing an increasing number of organisations adopting the Living Wage, including the Labour-run Oxford City Council who adopted a Living Wage policy four years ago, and is now an accredited Living Wage employer.

But more needs to be done to encourage employers to sign up, and Ed Miliband has announced that if the Labour Party win the next General Election they will introduce Make Work Pay contracts that will encourage businesses raise wages. Firms that commit to paying their employees the living wage, currently £8.80 in London and £7.65 elsewhere, in the first year of the next Parliament will be offered a 12 month tax rebate of up to £1,000 for each individual worker that receives a pay rise.
The money would be funded directly from increased income tax and National Insurance contributions. Further savings in lower tax credits and benefit payments, as well as increased tax revenues in future years, will cut the welfare bill and help reduce the deficit.

Many of us are appalled to learn how many families who are in poverty are actually in work. A lot of constituents tell me they are struggling to make ends meet, and despite working, the lack of affordable housing combined with rising energy prices, food bills, and transport costs means that they are simply unable to make ends meet. Whilst many businesses would like to do more, it can be difficult to justify in these tough economic terms. Labour's policy meets employers halfway and directly tackles the problem for people on low pay.

I would like to get views from students on tackling the cost of living. Do get in touch at Andrew.Smith.MP@gmail.com if there are any points you would like to raise with me.

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