Parliament and Politics: Benefits 'supplement pay at supermarkets'

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Welfare hand-outs are being used to supplement low- level wages being paid by two of the country's best-known supermarket chains, Sainsbury and Tesco, Frank Field, Labour chairman of the Commons Social Security Committee, said last night.

Mr Field has urged Peter Lilley, Secretary of State for Social Security, to ask the two groups whether they would review their pay levels to ease the pressure on welfare payments.

In a committee hearing with the minister last month, Mr Field said that Sainsbury's had opened a new store in Upton, Merseyside, and the wages they offered skilled workers were so low that they would get Family Credit if they had children.

Mr Field has since written to Mr Lilley, citing Sainsbury's pay of pounds 149.76 a week for skilled bakers, butchers and cooks at Upton, and the pounds 125.72 a week offered by Tesco for assistants at a new superstore outside Lewes in East Sussex.

He told the minister: 'Clearly both employers obtain the labour they want, paying these rates of pay. The question that I was raising is whether that is satisfactory, given the fact that a family with a single wage-earner and two children would qualify for Family Credit while working for either company?'

According to Commons library researchers, if a man or woman with two children under eleven, a non-working partner and savings of less than pounds 3,000, earned pounds 130 a week gross, they would receive pounds 27.30 Family Credit; on pounds 150 a week, the Family Credit would be pounds 17.70.

But Mr Field said last night: 'This raises questions of whether employers are adapting their wage rates, knowing that the difference between what they pay and a decent minimum will be made up by the taxpayer through the welfare budget.

'My own guess is that Sainsbury's and Tesco will be horrified. They pride themselves on being good employers, and yet they are being bankrolled, or in this case payrolled, from welfare.'

He said that companies like Sainsbury's were pay pacesetters. 'There was a near-riot when they opened on Wirral; people went mad trying to get application forms from the Birkenhead Job Centre. In an age of high unemployment and labour surplus, they can call the tune. But I would hope that Mr Lilley would raise it with them, and that they would consider their responsibilities at board level.'