Thursday, 29 June 2017

Report warns of 'Wages Theft' in Tory Britain!

During the eleven years that Margaret Thatcher served as the British Prime Minister of a Conservative government (1979-1990), many people bought into the idea that trade unions were an irrelevance and an anachronism in a modern society. Thatcher told voters that if they bought their council house and a few shares in ‘British Gas’, they could become middle-class and a capitalist overnight. She called it “popular capitalism.”

Since Thatcher’s ‘conservative revolution’, we have seen trade union membership fall from 13m in the late 1970s to around 6m today. Part-time and temporary work, self-employment (up by a quarter), and zero hours contracts, have flourished, and today account for 43% of the UK workforce. Pay in these areas also lags behind the pay of those in full-time occupations. Changes in employment law have also made it more difficult for workers to take industrial action and have eroded the bargaining power of labour. Despite the fact that the unemployment rate is said to be at its lowest since 1975, real incomes are falling and inequality is growing.   

 Although the Bank of England estimates that the wage premium associated with trade union membership, adds between 10 to 15% to pay, most people in Britain today, are likely to be paid by the task or the hour and will not be members of a trade union.  

The decline of trade unions in the UK over the last 30 years has coincided with a giant leap in inequality. A recent United Nations report revealed that the UK has some of the highest levels of hunger and deprivation among the world’s richest nations. UNICEF have stated that one in three children in this country, suffer ‘multi-dimensional poverty’ in housing, social activities, and food. It shouldn’t require a doctorate in economics, to realise that if workers don’t or can’t exercise their industrial clout to squeeze employers, then there is little incentive for employers to improve pay and conditions. It is generally recognised even by the IMF that union members tend to be better paid and that collective bargaining yields better results for workers.

A recent report ‘Unpaid Britain’, published by Middlesex University Business School, spells out our prevalent ‘wages theft’ has become within many sectors of the British economy, which tend to be non-unionised. The research based on data from ‘employment tribunals’, the ‘insolvency service’, the ‘Labour Force Survey’, ‘ACAS’ and the ‘CAB’,  was  used to estimate the scale of deliberately unpaid work in Britain today. The report found that UK workers were cheated out of at least £1.5bn a year in holiday pay, (there is no penalty on an employer for failing to pay) in spite of being entitled to 28 days holiday a year under the ‘European Working Time Directive’ (which they’re often unaware of) for full-time workers, or the equivalent of 12.o7% of average pay, for those who work variable hours. One-in-12 doesn’t get a pay slip as required by law and £1.2bn in wages is unpaid annually.

The Citizens Advice Bureau (CAB), say they have experienced a doubling of cases of wages theft between 2014 and 2017, with about 9,000 workers asking for help to recover unpaid wages and 75,000, having problems with pay and entitlements in the last year. The report says that many employers simply pockets workers wages because they can do so with impunity, due to a lack of enforcement by the authorities, or because workers who undertake variable hours, often do not get a pay slip or find it difficult, to keep track of the hours worked to prove what they are owed. Researchers found that other employers known as ‘phoenix businesses’, are going into administration owing debts and then reappearing shortly after, using a different name.

The report says that the cost incurred by workers to go to an Employment Tribunal, often prevents workers from seeking to recover unpaid wages. Since Employment Tribunal fees were introduced by Vince Cable, the Liberal Democrat minister in the Cameron coalition government in 2013, individual workers taking employers to a tribunal has fallen by 67%.  Clearly, having rights and being able to exercise them are two completely different things in Britain.

The neo-liberal capitalist model of business, as espoused by Thatcher and Regan in the late 1970s, sought to smash the trade unions and the collective bargaining power of labour, so as to turn British workers into doormats for billionaires, and to introduce ‘flexible working’ like zero hour contracts and the ‘gig’ economy. Likewise, Thatcher’s anti-union laws were also used to place legal hurdles in the way of workers in order to make it more difficult for them to take industrial action, in order to get better pay and conditions from their employers.

In his book ‘POSTCAPITALISM’, the author and journalist, Paul Mason, says that many people fail to grasp the true meaning behind ‘austerity’, believing it to be seven years of spending cuts or what occurred in Greece. He asserts that the real austerity project is about driving down wages and living standards in the west for decades, until they meet those of the middle-classes in China and India on the way up. To make his point, Mason, refers to a speech given by Tidjan Thiam, the CEO of Prudential, at the Davos Forum in 2012, who said that unions were the “enemy of young people” and that the minimum wage, was “a machine to destroy jobs”, along with workers’ rights and decent wages, which stood in the way of capitalism’s revival and had to go.
The recent General Election which resulted in a hung parliament and a Conservative minority government showed that many British voters are getting sick of Tory one-sided austerity and they desire a change. Rather than spend another five years in the dungeons, they want to see investment in Britain’s infrastructure, services, education, housing and decent jobs. Labour’s left-wing socialist manifesto was popular and offered many voters hope and the prospects of something better for themselves and their children. According to pollsters, nearly 13 million people voted Labour including 52% of middle-class professionals under 35 and 70% of younger people in the “DE” social category, classed as “most working class.” This is encouraging, but it seems highly unlikely, that Jeremy Corbyn, will be in Downing Street by Christmas even after securing 40 percent of the popular vote. This week, Labour lost an amendment which called on MPs to lift the cap on public sector pay of 1% which has been in place since 2010. While austerity is imposed on public sectors workers, to cap their pay, it isn’t when it comes to the pay of MPs. Two years ago (2015), MPs were given a 10% rise followed by a 1.4% deal in 2016. When you hear the phrase ‘national interest’, always ask whose interest we are talking about.

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