Labour’s campaigning focus today on the impact of the Tory pay freeze on the NHS is very welcome. We must now follow this up over the coming weeks, as part of of a wider effort to make the whole issue of wages a key electoral battleground.
Tory chancellor Philip Hammond intends to keep the public sector pay freeze in place through to at least 2019-20, meaning workers have been denied a proper pay rise for over a decade. Worse than this, by capping pay rises at one per cent, at a time when inflation is at running at least twice this or more, it means the Tories are continuing to deliver real-terms pay cuts to the pay of millions of workers across Britain, making teachers, nursers, firefighters and dinner ladies across the land poorer year-on-year.
One in six of us work in the public sector, but the scandal of low pay can be felt across the board. The result has been damage to morale, and a looming crisis in recruitment and retention across vital public services, meaning for example that NHS resources are increasingly being wasted on paying over the odds to agencies. It’s utterly self-defeating.
And it’s not just public sector workers – the Tories have further encouraged a climate where greedy profiteer bosses can create a race to the bottom in pay and conditions. Six million workers are paid below the rate determined by the Living Wage Commission as the minimum needed just to get by.
Official statistic show that the number of zero-hour contact jobs has increased by 13 per cent over the last year alone. The rise of the “gig economy” employment model adopted by the likes of Uber and Deliveroo is increasingly forcing workers to classify themselves as self-employed to spare the company having to pay national insurance contributions or for basic workers’ entitlements like sick pay and holiday pay.
Young workers in particular are bearing the brunt. The exclusion of workers aged 16-24 from the inaccurately named national living wage is effectively a licence to exploit young workers on poverty pay. It is the highest age threshold for a minimum wage anywhere in the developed world with the exception of Greece.
Young workers don’t get cheaper rents (indeed, unbelievably, the Tories have also taken away the housing benefit of those aged 18-21 which will almost certainly cause a sharp upward spike in youth homelessness), nor do they pay lower prices for most goods.
Whole industries, like fast food and retail, are essentially structured around the ability of global multinational companies making billions by exploiting workers on poverty pay, especially those under 25. Young people are being exploited as unpaid interns, on work experience, or on bogus apprenticeships displacing properly paid workers and allowing the bosses to squeeze out extra profits.
Whilst the Tories like to dress up their welfare “reforms” as hitting feckless scroungers, the reality is that they are hammering the incomes of people who work hard but are poorly paid, as well as those who are simply in no position to work owing to illness or disability. Benefit cuts since 2010 will have cost working single parents up to £2,850 a year by 2020. Some 2.1 million working families will lose out, by £1,600 a year on average, in the transition to universal credit. Theresa May’s government have deliberately chosen to make the poor poorer still.
Little wonder, then, that British households now owe on average nearly £13,000, even before mortgages are included, an all-time high for unsecured personal debts. The Tories have been robbing us blind, and our credit bills are starting to show it big time. Meanwhile, May and Hammond are giving £1bn away to the wealthiest families in cuts to inheritance tax and increasingly generous tax allowances, whilst allowing some of the biggest companies in the UK to avoid paying a penny in corporation tax.
Overall, by the end of this decade, median pay will be down on what we earning in back in 2004. In effect, the Tories have robbed us blind. If you mugged on the street for your wallet with £30 in it you would be raging, right? How would you feel if someone had dipped into your bank account to the tune of over ten thousand pounds? Fury would hardly cover it.
Well, according to a report published earlier this year by the respected Resolution Foundation, workers in Britain have lost an average £11,920 each over the last ten years, in comparison to what we would have earned had the economy continued to grow as it did in the previous decade. The criminal gang we’re talking about are based in Westminster.
The 2008 financial crash was the culmination of neo-liberal reforms to the economy including the deregulation of banking, encouraging endemic greed and reckless risk-taking. These policies and the political response – making savage cuts to public spending to plug the gap left by the billions handed over to bail-out the bankers – have effectively cost each of us a sum well into five figures.
The Tories egged on the policies which crashed the economy, and have been responsible for making sure that their rich mates aren’t the ones paying the price for the disaster. It’s the rest of us that have been robbed blind. We’ve never seen wages take a hit for so long for centuries, the Resolution report concluded – in fact we’ve just lived through “the worst decade of pay growth since the Napoleonic wars”.
They think voters are too stupid to notice, or too lazy to do anything about it. Labour now has to get across the message that June 8 is the day we get not only to give ourselves an extra four bank holidays each year, but also to vote to give ourselves the pay rise we are badly owed.