A pay rise for all
John O’Farrell explains the rationale behind the unions’ Britain Needs a Pay Rise campaign.
October marks the occasion for the poorest quarter of workers when they get a pay rise. The national minimum wage is increasing to a whopping £6.50 per hour. Northern Ireland has the highest proportion of working people in the UK receiving below the living wage. You knew that already.
In order to live in any way above frugality, in order to go out every now and then, to pay for a school trip for their kids, to take a one-week holiday, to get a mortgage, to drive a car, to participate in our service-led economy, something extra is necessary to supplement pay of less than £7 an hour – which means consumer loans or help from the state in the shape of income support or housing benefit. The latter is portrayed as a gift from an overgenerous state to fickle slouches, and is being targeted by George Osborne as the main pot of gold to reduce the deficit in the next Parliament.
Or, to look at it another way, low-paying employers are being subsidised by tax-payers and repaying our generosity by bloating their salaries with undeserved profits, and then dodging their taxes. The most recent analysis of tax evasion in the UK by www.taxresearch.org shows that over £80 billion was the cost of not enforcing the rules that are already there – let alone the perfectly legal methods of tax avoidance perfected by tech firms.
What connects the low paid and the tax averse is the Chancellor’s speech to the Tory party faithful – the former a specific threat that must be addressed immediately and the latter an irritation that might be looked at some time, off in the future, maybe.
Reform is for the little people. The perks of the poor are luxuries which cannot be afforded. The state is too big and the public sector is bloated. Property bubbles are great for the economy and the looming pensions crisis is the fault of nurses and prison officers who have something most private sector employees don’t. We are back to the standard mantra of the corporate press and the Westminster consensus after the unwelcome interruption of the Scottish referendum. Do you notice how the above assertions of ‘common sense’ and ‘realistic economics’ were absent during the debate in Scotland?
Scots were offered varying degrees of social democracy by both ‘Yes’ and ‘No’ sides to an electorate who expressed, in huge numbers which swamped the gurus of public opinion, sufficient levels of dissatisfaction with what passes as political choice in the UK. Put simply, welfare reform almost broke up Britain alongside its ideological cousins of austerity economics, low pay, tax dodging, privatisation by stealth, expense fiddling, phone hacking, corporate snooping, utility pricing, insider trading, door revolving, crony rewarding politics-as-normal.
The large turnout could be compared with the 1998 referendum here and the 1951 election between Churchill and Attlee – plebiscites where there was a real choice and not slim variants of neoliberalism. The shift in power and profits to the top of society has been so gradual that we are encouraged to believe that it was always thus, that the huge gap in wealth and aspiration and hope is as natural as gravity. We need to scotch that lie.
Choices have been made, by the few for themselves. We are bombarded with tales of woe about how red tape and the EU and trade unions are holding back entrepreneurship.
We are told that tax avoidance is perfectly legal and that companies have a ficundary duty to shareholders. We are told that if we want top talent then we must pay top dollar.
Okay. Then justify this: “If the national minimum wage had kept pace with FTSE 100 CEO salaries since 1999, it would now be £18.89 per hour instead of £6.50” (The Guardian, 15 September).
Working people are being ripped off by a massive transfer of wealth to the already filthy rich. We must learn from the Scots. The only way to drive change is to participate in it.
