The news that the government is due to announce a rise of its so-called ‘National Living Wage’ for those aged 23 and above from £8.91 to £9.50 has been lauded by some in the national press as ‘inflation-busting’. Yet, thanks to more than a decade of Conservative government attacks on working people, we’ve seen the worst wage stagnation since Napoleonic times. This increase simply will not be sufficient for many of those on the lowest incomes who have experienced such a lengthy real-term pay decline.
The squeeze on wages since 2010 has meant that in-work poverty has hit new highs, with one in six working households below the poverty line. In my home town and constituency of Middlesbrough over the past five years alone the relative child poverty levels have almost doubled, and two out of five children now live in households with an income below the poverty line.
This trend has only been exacerbated by the pandemic. Data collected by the Trussell Trust shows that food bank usage has soared, and many families have been forced to turn to emergency food parcels for the first time. Over one third of UK households are just one missed pay packet or unexpected expense away from financial ruin.
Those most in need are now set to be hit by the Tories’ cruel and callous slashing of Universal Credit, along with their plans to put up National Insurance contributions. All the while the cost of living is shooting up, thanks in part to the government’s catastrophic mishandling of the fuel crisis. This winter, many people will be left having to make the dreadful decision between either keeping the heating on or putting food on the table. In this context, it is astonishing that anyone could consider the government’s proposed rise in the minimum wage as anything but pitiful.
Labour has to have a better offer. Without a stronger proposal than calling for ‘at least £10 an hour’, I am fearful that the government will be free to dictate the terms of the debate on low pay. The policy is over half a decade old, and considering the great sacrifices that those on the lowest pay have made during the pandemic, it is essential that the Labour and trade union movement fights for better. People have seen the critical role played by our key workers, often those on the lowest pay, and there has been a distinct shift in the public mood. A recent poll by Survation showed that 65 percent of the public are in favour of raising the minimum wage to £15 an hour.
This sentiment was reflected at the Labour Party conference last month, where delegates passed a motion resolving to support the policy. Considering that the call for a minimum wage of £15 an hour has now been adopted by Labour’s sovereign body, it is vital that the party’s front bench pursues it with full vigour. The fact that the proposal has overwhelming support across the political spectrum—with 59 percent of Conservative voters backing it—makes the argument all the more compelling.
We must also see an end to the unfair disparity of the minimum wage depending on workers’ ages. Young people have been endlessly punished by this government, whether it be the cuts to Education Maintenance Allowance or the tripling of tuition fees. With poverty rates among young people higher than any other age group, there can be no justification in 16 and 17 year olds earning almost half the rate of those who are 23 and over.
The level of the government’s minimum wage for those under the age of 18 currently stands at £4.62 an hour, only 98p more than it was in 2010, meaning that the minimum wage for 16 and 17 year olds today has gone down in real terms. In 2019, Labour committed to introducing a Real Living Wage, and extending it to all workers aged 16 and over. It is key that the Labour leadership recommit to this policy if we stand a chance of winning these young people over, and showing them that our Party has their back.
The cold, hard truth is that the problem of low wages will require much more than raising the rate of the minimum wage—what is needed is systemic change. We cannot allow a status quo to continue in which the scales are tilted so heavily against working people. Because of the weakness of the government’s enforcement regime, too many employers are able to get away with unlawfully exploiting their workforce.
A staggering two million people are currently paid below the legal minimum. Yet, last year, there were just 18 Employment Agency Standards inspectors responsible for inspecting 40,000 employment agencies. So it is no good for ministers to set out higher rates of wages, if at the same time they are happy to sit back while exploitative employers are given free rein to take advantage of their workers without any meaningful or effective enforcement.
Fighting for working people’s rights and wages is what the Labour Party was established to do. This mission is the very heart and soul of our movement, and every political position we take should be informed by it. As a basic point of principle, that means making the case for workers to be paid enough to have flourishing lives free from financial insecurity.
We cannot allow this demand to be painted as idealistic or unachievable. It is working people who create wealth, not businesses and capital, and it is working people who should enjoy the fruits of their labour. Yet thanks to this government and the ruling elite it represents—which places private profit above lives and livelihoods—far too many are currently denied the basic necessities and rights that they should be entitled to.
During my time as Shadow Secretary of State for Employment Rights and Protections, I set out Labour’s Green Paper on Employment Rights detailing exactly what a New Deal for Working People would look like—one founded on decency and treating working people with dignity and respect. The balance of power in the workplace has shifted far too far away from workers, and it is high time we listened to their voices as they demand a wage they can live on.
An hourly rate of £9.50 an hour simply won’t cut it. Nor will £10. The time is right to fight for £15. In fact, it’s way overdue.