The Weekly paper of the New Communist Party of Britain
Week commencing 18th August 2023
The Weekly paper of the New Communist Party of Britain
Week commencing 18th August 2023
The Weekly paper of the New Communist Party of Britain
In late July 1998 the National Minimum Wage Act came was given the Royal Assent. This was the main concession the new New Labour Government of Tony Blair offered to the working class. He took care to ensure that the main provisions of the Tory anti-union laws and their abolition of wages councils, which had done at least something for the low paid, remained in place.
As raising wages for the low paid was not an urgent matter it only actually came into force in April of the following year after the Low Pay Commission (LPC) was established, presently it is a non-departmental public body of the Department of Business and Trade and makes its presence felt once a year by announcing the increase for the coming year. The measure was opposed from the right by those who said it would impose extra costs on business. If employers had to pay decent wages, then inflation, redundancies and bankruptcies would stalk the land. That is happening at present, but it has more to do with excessive profits and nothing to do with cleaners’ excessive wages.
From Blair’s perspective this was part of his vow to lift people out of poverty. It was a major part of his ‘welfare-to-work’ promises, which sought to ensure that work would pay more than being on benefits or welfare.
Although it was always a myth that people lived a life of luxury on benefits, it was true that a life of hardship on benefits was very often not much worse that a life working for low pay. In fact some jobs could not exist without low pay.
At the time there were a few left critics of the measure, one of which was the NCP which argued that better trade union organisation and working-class struggle was the answer. Warnings that the National Minimum Wage (NMW) would become the maximum wage went unheeded – however this was a lone voice. The measure was supported by the TUC, not least because of promised seats on the LPC for a few lucky trade union bureaucrats.
When the National Minimum Wage (NMW) was first established, it was set at the rate of £3.60 per hour for those over 22-years-old with £3.00 for those between 18 and 22. At the time, it was not just the ‘hard left’ who thought these rates were too low.
At present there are five rates, ranging from £5.28 for 16–17-years-old and for apprentices. It is £7.49 for 18–20-year-olds, £10.18 between 21–22, rising to £10.42 for those over 23.
The NMW makes no provision for overtime rates, a serious matter as shift working has largely replaced overtime. For instance, supermarket workers no longer get Sunday and late night payments.
The measure was a predictably New Labour measure that was designed not to frighten the bourgeois. Apart from the low level, the LPC was not given resources to enforce the law. On page nine we show just one way of getting around the law by pretending that workers are ‘volunteers’.
Enforcement has always been lax. There have been enforcement orders, but there are no penalties apart from having to cough up back-pay to actual complainants unless they refuse to act on an enforcement order. It took years for the present ‘naming and shaming’ of those not paying to start.
There is no proactive action by HMRC to enforce it, it is up to under-paid workers to take action. As they are often in the least organised sectors, the result of asking for more often results in the same fate as happened to Oliver Twist when he made that same request (he got walloped with a ladle).
The lower rates for younger workers is a particular bone of contention. It is difficult to unite workers around this issue, however, as it is generally agreed that older workers should get increments as they get older.
Soon after the measure came into being it was common to see long list of job advertisements in newspapers stating that that jobs “adhered to the minimum wages legislation”, which was simply a means of saying the wages were going to be very low indeed.
The inadequacies of the government’s NMW is thrown into stark relief by the concept of the Living Wage, which was established by the Living Wage Foundation (LWF). The LWF was established in 2011 by the campaign group London Citizens and is supported by the respectable Joseph Rowntree Foundation. They argue that “that paying a Living Wage is not merely ethical, but also constitutes business best practice and improves productivity”, so they are hardly revolutionaries.
The present LWF figures of £10.90 per hour outside London and £11.95 inside London were announced last September. At present there are 13,000 employers accredited by the LWF. The first to sign up was fashion chain Next who did so after the LWF asked awkward questions at an AGM, a tactic somewhat different from normal trade union practice.
Payment of the LWF’s Real Living Wage is purely voluntary and should not be confused by the LPC’s decision to change the Sunday name of the NMW to the “National Living Wage”, which is clearly less. The official figure aims to be the equivalent to 60 per cent of median UK earnings.
Trade unions argue that both LPC and LWF rates are not enough. About this time last year the Trades Union Congress issued a demand for a £15 per hour minimum, but in true TUC tradition has not been hyper active in advocating it.
When it was launched the TUC called upon “the government to work with the Low Pay Commission (LPC) to deliver it as soon as possible, over time”. The parodic Fabian chant of “What do we want? Moderate progress within the law! When do we want it? Whenever resources permit!” became reality.
The TUC correctly says that the £15 per hour would help deliver the “high wage economy” everyone pays lip service to but errs in saying it would “deliver workers their fair share of the wealth they create” – but it would at least be a small improvement. It also says that a new minimum wage should be set at 75 per cent of median hourly pay, and that the £15 should be paid to all workers. It started at 47 per cent in 1999 and even under the Tories is creeping towards the 66 per cent hoped for next year. The Prime Minister-in-waiting Sir Keir Starmer has poured cold water on any plans to increase the minimum wage.
It is clear, however, that the NMW has failed even on its own terms. The reality is that even going by official figures there is more in-work poverty with people in full time employment needing benefits to survive. This is a damning indictment of the NMW. The benefits system is being used not to assist those in trouble, but to subsidise employers who are enabled to get away with paying low wages.
Blair’s other major employment measure, the 1999 Employment Relation Act, did not do much for workers. It claimed to undo the worst of Tory anti-trade union laws and was supposed to make it impossible for employers to sack people for attempting union organisation, outlaw blacklisting, improve access to workplace training, improvements were made to maternity leave, and to guarantee the right to someone to accompany employees to disciplinary hearings. This was introduced only after pressure from unions but the improvements, although welcome, were comparatively minor. Once again, the mechanisms for enforcement are conspicuous by their absence.
Blair openly boasted that his twin measures left Britain the “most lightly regulated labour market in the European Union”, with further consequences.
Insecure Hours
Low wages are bad enough, but for many people uncertain hours compound the hardship.
Early this month the LWF foundation issued a report that demonstrated the extent of insecure work in Britain.
Over six million UK workers are in insecure work, about 20 per cent of the workforce, of whom 3.4 million are in low-paid jobs. Most receive very short notice of changes. In these cases the vast majority receive no compensation for the cancellation of work. This results in 22 per cent being forced into debt or reliance on credit.
Those who are affected are in essential jobs, such as 878,000 health and social care workers. The NHS as well as private employers are both guilty parties. The Wholesale and Retail sector come a close second, with Accommodation and Food services with 527,000 workers coming a close third, narrowly ahead of the 503,000 workers in the Education sector who are affected.
The costs of cancelled shifts are not just the lack of wages. Insecure workers have the alternative of seeing season tickets go to waste, or alternatively to use more expensive daily fares. These other costs can amount to a loss of £600 from low annual wages. Conversely, unplanned childcare burdens other workers.
The LWF claims that it is getting more employers signed-up to provide reasonable hours and compensation. It has 100 so far covering 50,000 workers, which by its own figure is a drop in the ocean.
To secure accreditation employers commit to at least four weeks’ notice for every shift and guaranteed payments if shifts are cancelled. Accredited employers must also provide a guaranteed minimum of 16 hours every week and a contract that accurately reflects hours worked. That such modest measures have to be begged for says much about the state of labour relations in Britain.
Katherine Chapman, CEO of the LWF, stated the obvious by saying: “Soaring prices have rightly shone a spotlight on pay this past year, but this research makes clear that reliable working hours are as vital to workers’ financial resilience as a real Living Wage. It is shocking that 3.4 million workers are facing the cost-of-living crisis in low paying jobs with unstable working hours, making planning a life and a budget impossible.”
She is wrong, however, in saying that “action is required by both employer and the government”. It is trade unions that must step up organising in these sectors. Britain’s unions are big enough to launch campaigns and have enough in the bank to sustain temporary setbacks until the battle is won.