Posts Tagged ‘minimum wage’

In-work benefits and the minimum wage: a story of callous Tory disregard for poverty, and the arrant hypocrisy of Jeremy Corbyn

12/10/2017, 03:57:45 PM

by George Kendall

During the coalition of 2010-2015, when the government was facing a record peacetime deficit, many Conservative cuts to welfare were blocked by the Liberal Democrats. In the 2015 election, the Tories took many Liberal Democrat seats, which gave them a majority. They then passed legislation to implement most of these cuts.

Jeremy Corbyn was elected Labour leader on the back of trenchant opposition to welfare cuts, however, when his team wrote their 2017 manifesto, they chose to continue those that had not yet been implemented. According to the Resolution Foundation, they only allocated £2bn/yr to reduce these welfare cuts, which would leave £7bn/yr in place. There was confusion among Corbyn spokespeople, but, by the end of the campaign, Corbyn’s policy of continuing most of the planned draconian cuts to welfare was confirmed as still in place.

I’ve previously written about this here and here, and the responses I have received from Corbyn supporters have been varied, and contradictory.

  • Some acknowledged that Corbyn’s manifesto didn’t allocate the money to stop these future cuts, but said Corbyn would never implement them. Of course, they never explained which of Corbyn’s campaign promises he would break, in order to fund the gaping hole in his budget
  • Others claimed it was fake news. They dismissed analysis of the Corbyn manifesto by the Resolution Foundation as reported in the Guardianby the IFSin the Independentand the New Statesman, even statements by Barry GardinerJeremy Corbyn and Emily Thornberry. Their denial of reality is an echo of the supporters of Donald Trump
  • But the most common response was that these cuts would be offset by other Corbyn policies, especially a rise in the minimum wage

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Umunna, Reeves et al are wrong on free movement. Its bad politics and worse economics

22/09/2016, 10:18:57 PM

by Sam Fowles

For Rachel Reeves, immigration from the EU has caused a “slight drag” on wages. So Labour best represents the working poor by calling for an end to free movement. This is both simplistic and wrong. It represents only the loosest grasp of political strategy and no grasp of economics at all.

Labour will never win the fight to be “tough on immigration”. If voters want to kick out immigrants, they’ll vote for the parties that have been dog whistling about immigration for years. No one buys the cheap knock off when they can get the real thing for the same price.  Labour must address the real causes of the low wage crisis. This strategy has two advantages: It targets voters that might actually vote Labour, and it’s not economically illiterate.

The overall impact of immigration on wages is generally positive. By contributing more in taxes than they take out, EU immigrants ease financial pressures in the public sector. Immigration can create downward pressure on the wages of low-skilled workers. But this is negligible. Reeves relies on a study that found a 10% increase in immigration creates a 1.8% drag on low-skilled wages. To put that in perspective: the largest increase in immigration since 2006 has been around 7%. This works out as costing low skilled workers 1p per hour.

But immigration is equally likely to have a positive effect on low-skilled wages. Migration increases demand: The more people in an economy, the more goods and services they need: The more goods and services required, the greater the demand for labour to provide them: The greater the demand for labour, the more employers are prepared to pay for it.

But this hasn’t happened in the UK: Why?

Because successive governments have chosen policies that drive down wages.

Austerity (more…)

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The Lib Dem love that dare not speak its name

26/03/2016, 09:50:41 PM

by George Kendall

Since 1997, the Liberal Democrats have had an awful secret.

After 2001, we bitterly denounced the Labour government. We railed against their authoritarian policies on civil liberties and the illegal war in Iraq. In cities across the north of England, we were locked in mortal combat for control of local government.

However, when respective Lib Dems have gathered, after sidelong glances to ensure the wrong people aren’t listening, there’s something we have only admitted with hushed voices.

Sometimes we’d speak with comic evasions, “Of course,” we’d say. “I hated the Labour government.” And everyone would nod.

“Except the devolution to Scotland and Wales, but that was down to Robert Maclennan and Robin Cook. Labour only agreed with great reluctance.

“Oh, and the Freedom of Information Act, but we all know Blair hated it.

“I suppose they did reduce the number of hereditary Lords, but why not elect them?

“And why do they get credit for the Independence of the Bank of England? After all, that was shamelessly stealing our policy.

“They did introduce civil partnerships, but we’ve gone further.

“And they take all the credit for the increase in overseas aid, when that was driven by the Jubilee 2000 campaign. And that was founded by a Lib Dem.

“Fair’s fair, I suppose. The NHS did need more funding, even if they took a few years to get around to it.

“Electoral reform for the European elections may have been an improvement, but they should have introduced it to the House of Commons..

“I suppose the Minimum Wage was all right.” And we’d pause, unable to think what else to say.

We never spoke the obvious punchline. However, if we were honest, in the back of our minds, we could hear ourselves saying, “Apart from that, what did the 1997 Labour government ever do for us?”

Now, almost two decades later, the world has changed. Corbynistas rail against Labour’s record in government, and the Tories ridicule it. But, for us, sometimes the boundary between love and hate is narrower than we realise.

Despite all that has happened since, perhaps it’s time for some of us to admit that, in truth, we loved the 1997 government.

George Kendall is convener of the Social Democrat Group – a Liberal Democrat organisation to develop the social democrat tradition of the Liberal Democrats, and to build links with social democrats in the Labour party

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Osborne has laid the most obvious trap for Labour on tax credits. Will the party blunder in?

13/07/2015, 12:21:26 PM

by Jonathan Todd

Ten years since 7/7. Ten years since London won the Olympics. Ten years since Robin Cook was telling Labour party events that he was meeting people whose fortunes have been transformed by tax credits, but who don’t realise that they have the (then Labour) government to thank rather than some obscure administrative change at the Inland Revenue.

While the Labour government did good, Cook argued, it was not credited with having done it, as it was done by stealth. The tax credits architecture that Gordon Brown quietly built, and which helped the UK to an impressively robust employment performance, even after the financial crisis, was loudly dismantled in George Osborne’s Budget.

Where New Labour reassured business, while using state levers to redistribute with minimal fanfare, Ed Miliband was a Labour leader eager to have business do more. Whether Osborne would have found it harder to take an axe to tax credits if Labour had trumpeted them as bullishly as Cook preferred, as well as whether Osborne would have been in the position to do so had Miliband more assiduously courted business, are imponderables.

As Osborne warmly embraced Iain Duncan-Smith’s welfare reforms to declare himself the bringer of social justice and adopted a form of the predistribution beloved of Miliband by accompanying his dilution of tax credits with legislation for a claimed living wage, Labour’s attempt to come to terms with these unknowns is complicated by Tory cross-dressing.

In spite of events in Greece, the Budget, unlike in 2010, was pitched less as a bulwark against calamity and more as a staging post to better future. In which we are all invited to share. Reality may struggle to keep pace with the one nation rhetoric. Particularly when a tool for creating an income floor (the statutory minimum wage, which is what Osborne has raised through his supposed living wage) is deployed as a replacement for incentives to additional work (working tax credits).

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Miliband could have a legacy even if Labour lose

17/04/2015, 08:04:26 PM

by David Ward

Most people don’t realise that the guy who invented the computer was a bloke called Tommy Flowers who worked for the Post Office.

Sure Turing made some logic sketches, but it was Flowers who designed and  actually built the machine that broke the German codes. After the war he thought there might be something in it. He wasn’t allowed to say he’d built one before but he took his idea to British banks for funding to build another one. Of course they laughed him out of the office, the Americans took over the industry and the rest is history.

I mention this story because it shows big ideas can quickly become bigger than their creators, and I think Ed Miliband could be on the verge of a big change too.

It’s not exactly news that the post-Thatcher consensus is coming to an end. You only need to look at the fracturing of politics a la the late 1970s to see that the predominant mood out there is uncertainty.

As we know, the entire case Ed has been making since 2010 is that the left doesn’t have to accept rampant capitalism on its own terms. We don’t have to accept that those at the top should reap unsustainable rewards. We don’t have to accept that markets and big corporations can’t be reformed so society and employees benefit too. And we don’t have to accept that people in work still don’t earn enough to live on.

That’s been the pitch. It’s seen him derided in many quarters – even in his own party on occasion. In any normal circumstance Labour should be expecting a chastening during this campaign.

But the funny thing is it hasn’t quite happened. It’s taken a few years of sharpening to get the pitch right but Labour’s message is beginning to cut through. Take a look at this Ipsos Mori published a word cloud of the issues that people have remembered from the last few days. Since the first few debates Ed’s approval ratings have improved markedly.

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Osborne’s tank tries to churn up Ed’s lawn

17/01/2014, 08:24:49 AM

by Kevin Meagher

He would bristle at the comparison, but George Osborne’s raid on Labour’s turf – promising to support an above inflation rise in the minimum wage – is straight out of the Gordon Brown book of political tradecraft.

The two most political bean-counters British politics has ever produced are both fans of ‘weaponising’ policy to suit their ends; laying clever traps for their enemies to fall into and using the Treasury’s tanks to churn up the opposition’s lawn.

“I want to make sure we are all in it together” said Osborne yesterday, to a chorus of generally disbelieving gasps. The minimum wage should increase “because the British economy can now afford that.”

The Tories used to be “on the wrong side of the argument” about the merits of the minimum wage, but that was all a misunderstanding. Now it’s a shiny, happy, modern party “in touch with the country,” he added.

ITV’s Chris Ship said the Lib Dems were “spitting tacks” as Osborne had veered over the coalition’s central reservation, cutting them out of the equation on a major good news story.

“He’s effectively endorsing the advice I gave to the Low Pay Commission” said Vince Cable on Newsnight last night, trying to sound nonchalant at the very effrontery of it all. Labour people too were miffed at Osborne’s naked opportunism. How dare a Tory Chancellor say anything positive about the minimum wage!

In a funny sort of way, Ed Miliband should take all this as a compliment. Imitation is the sincerest form of flattery. That Osborne felt compelled to try and spike today’s big speech on the economy and banking reform shows the Tories are irked about headlines proclaiming “I can save the middle class”.

So in the best traditions of “you send one of my guys to the hospital, I’ll send one of yours to the morgue” Osborne’s instinct is to wield his home-made shiv. It’s not pretty, but it is effective.

Gordon would approve.

Kevin Meagher is associate editor of Labour Uncut

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We should have the courage to legislate for a Living Wage, not just campaign for it

18/04/2013, 05:08:34 PM

by Prem Goyal

It has become a bit of an easy game for cynical journalists to say that Labour’s leadership talks about abstract ideas like pre-distribution and responsible capitalism that are somehow too hard for people to follow. What nonsense. I don’t much like either of the phrases, but I think the ideas themselves are both simple and compelling.

Ed’s offer to the country is rooted in good old fashioned common sense: instead of taking action ‘after the fact’ to try to fix inequality, let’s build social justice into the economy at every level. It might be easy to caricature as the language of the seminar room, but it is basically just another way of saying that prevention is better than cure.

The most effective form of prevention against the most extreme forms of inequality is full employment – and the best vaccination against in-work poverty is the living wage. That’s why Ed Miliband made it such a feature of his leadership bid and did significant follow up on the details late last year.

Right-wing ideologues, of course, claim that any intervention in the market distorts it and, in the end, hurts the economy. This argument, that the market finds its own perfect equilibrium between pay, the number of jobs and the demand for goods, ignores today’s reality: low pay employers are effectively getting a public subsidy for bad practice, in the form of tax-payer top ups to their workers’ wages through the benefit system.

The IPPR and the Resolution Foundation have estimated that a universal living wage would save the Treasury £3.6 billon from the bill it currently foots to help those on poverty pay to make ends meet. Over fifteen years in business I’ve worked in New York, Tokyo, London and Zurich for some of the biggest companies in the world and I can honestly say I’ve never met a business person who would think, when looked at like that, that they could reasonably ask the public to subsidise their profit margins while their staff struggle to survive.

The truth is, the living wage works for everybody: employee, tax-payer and employer alike. Independent research for the Living Wage Foundation has found that 80% of employers giving the wage and 75% of the staff receiving it feel it improves their work. As the Tories continually fail to understand when they attack ‘lazy Britain’ and endorse erosions of employee rights, better pay and conditions improve morale and productivity. Further, plenty of living wage employers felt it strengthens their brand by encouraging consumers to see them as an ethical firm.

My own company, GMC, pays all its staff a living wage and is applying to be on the official list of Living Wage firms. Financial companies, retail outlets and legal firms are joining a long list of councils, including my own Southwark borough council, and a growing number of universities.

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Saturday News Review

18/06/2011, 06:52:11 AM

Unison flexes its muscles

Britain’s biggest wave of industrial action since the 1926 general strike will be sparked by Government pension reforms, the largest public sector union’s leader has said. Dave Prentis, general secretary of Unison, issued the warning as angry unions threatened to walk away from talks over plans to pay more for reduced entitlements. He told the Guardian newspaper: “It will be the biggest since the general strike. It won’t be the miners’ strike. We are going to win.” It comes after Chief Secretary to the Treasury Danny Alexander told public sector workers it would be a “colossal mistake” to reject a deal that was the best they could hope for. Under the reforms, the general retirement age in the public sector will rise from 60 to 66, in line with the state pension. – Sky News

The leader of the largest public sector union promises to mount the most sustained campaign of industrial action the country has seen since the general strike of 1926, vowing not to back down until the government has dropped its controversial pension changes. Dave Prentis, general secretary of Unison – which has 1.4 million members employed by the state – described plans for waves of strike action, with public services shut down on a daily basis, rolling from one region to the next and from sector to sector. He said there was growing anger over a public sector pay freeze that could trigger more disputes further down the line and that the changes would unfairly penalise women, who form the majority of low-paid public sector workers. “It will be the biggest since the general strike. It won’t be the miners’ strike. We are going to win.” In an interview with the Guardian, Prentis – who also chairs the public sector group at the TUC – repeatedly insisted that he still hopes to negotiate a settlement with the government through talks that are currently under way. – the Guardian

They are still the nasty party

A Tory MP has sparked outrage after saying disabled people should work for less than the minimum wage. Right-winger Philip Davies said if employers had to pay the same wage they would always choose to hire an able-bodied job candidate over a disabled rival. The Shipley MP told the Commons yesterday: “People with a learning disability can’t be as productive in their work as somebody who hasn’t got a disability.” He added: “They (disabled people) accept an employer would take on a person without mental health problems if they were both having to be paid the same rate.” His comments came during the second reading debate of Tory Christopher Chope’s Employment Opportunities Bill, which opens up the possibility of workers “opting” to work for less than the £5.93 minimum wage. But Dame Anne Begg, chairman of the Work and Pensions Committee, said: “To suggest that disabled people should be treated as second class citizens is shocking and shows just what a warped world some Tories inhabit.” – Daily Mirror

Downing Street has moved to protect the Prime Minister from a torrent of criticism after a senior Conservative suggested that people with disabilities should be paid less than the minimum wage. Philip Davies, the MP for Shipley, claimed people with disabilities or mental health problems were at a disadvantage because they could not offer to work for less money. Relaxing the law would help some disabled people to compete more effectively for jobs in “the real world” in which they are “by definition” less productive than workers without disabilities, he claimed. The remarks stunned both Labour and Tory MPs and provoked a furious response from charities and equality campaigners, who condemned Mr Davies’s “insulting” suggestion as “absolutely outrageous”. During a Parliamentary debate, Mr Davies told MPs that the minimum wage of £5.93 per hour meant disabled people who wanted to work found the door being “closed in their face”. Richard Hawkes, Chief Executive of disability charity Scope, said Mr Davies had “got it seriously wrong”, adding: “We need to challenge employers’ prejudices – not pander to them.” The MP was also warned that he will be questioned over his remarks by the Equality and Human Rights Commission, which is conducting an inquiry into disability-related harassment. – Daily Telegraph

Waiting lists rocket

Longer waiting lists nail David Cameron’s lie that the NHS is safe in his Tory hands. Behind the bald Whitehall statistics are real people unnecessarily suffering for longer and, in some cases, probably dying. Over the past few weeks I’ve had to listen to the PM denying that waiting lists are rising. He can’t do that any more – although I wouldn’t put it past someone so slippery as him trying. The quack doctor in Downing Street deserves to pay a political price for his misdiagnosis and botched operations. I can’t pretend I’m surprised that he is dismantling the NHS as we know it. I wasn’t convinced five years ago when he declared: “The NHS is safe in my hands – of course it will be.” Tony Blair, he added, used one word three times to explain that education was his priority. Mr One Upmanship said he could better that: “I can do it in three letters – NHS.” Really, Prime Minister? You’ve an unhealthy way of proving that to those who rely on an NHS you’re harming. – Kevin Maguire, Daily Mirror

Ed on the campaign trail again

Scots are feeling the pinch from “reckless” Conservative policies, according to Labour leader Ed Miliband. Mr Miliband joined candidate Iain McKenzie campaigning for the Westminster Inverclyde by-election seat yesterday. He said: “Iain McKenzie is a superb local candidate, a man who knows this community like the back of his hand because he has lived here all his life and fought for the area. People deserve well-paid, secure jobs, and Iain will work hard to make that happen for the communities he knows so well. But I know many families and pensioners here in Inverclyde are hurting, and hurting in the face of risky and unfair Tory cuts. We need a plan B on the economy to help people right across the country. There is now no coherent plan for growth. David Cameron’s plan to cut spending too far and too fast is a reckless gamble with people’s jobs and livelihoods, and it is making things worse, not better.” – the Scotsman

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Equal pay for the under 21s – it’s only fair

12/02/2011, 10:30:33 AM

by Ian Silvera

Consider the example of two workers: Bill and Ben. Ben receives £59.30 in return for his ten hour shift at the local restaurant. In contrast, Bill receives £49.20 for the same shift at the same restaurant. Now, ask yourself would the £10.10 difference be justified if the workers were members of a different sex? Surely, you would answer “no”. Equally, ask yourself would the £10.10 difference between the workers be justified if the workers were members of a different race? Again, you would answer “no”. You answer no because discrimination is wrong. It contradicts your belief in equality, justice and fairness. So why, today, is pay inequality legally accepted?

When New Labour gained office in 1997, it was on a mandate of fairness and equality. Gone were the 80s, a decade marked for the repulsive worship of money. In 1999, Tony Blair’s government introduced the minimum wage. The £3.60 minimum, rising, eventually, to £5.93 over the years, was hailed as a great success for social justice. The poorest were being brought out of poverty with pride. (more…)

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