Banks urged to insist their contractors pay a living wage
GMB Scotland is to hold a protest demonstration outside Royal Bank of Scotland HQ in St Andrew Square on Tuesday to step up the campaign for them to pay a living wage to members employed by G4S and ISS to provide security and cleaning at RBS buildings across Britain. Continue reading High noon: Union plans Tuesday protest at RBS
… national minimum wage goes up by 20 pence today
From today, the apprentice rate of the National Minimum Wage (NMW) goes up by 57 pence to £3.30 and the NMW rate for adult workers will rise by 20 pence from £6.50 to £6.70 per hour.
The boost for apprentices is the largest ever and means that those working 40 hours a week will now have £1,185 more in their pay packet over the year, the government says.
By implementing a rate higher than the Low Pay Commission’s (LPC) recommendation apprenticeships will deliver a wage that is comparable to other choices for work.
The 3% increase in the adult rate is the biggest real increase since 2006 and moves the NMW closer to the average wage than ever before. The new rate means that a full time employee, working 40 hours, will see the largest cash increase in their annual pay packets since 2008.
Business Secretary Sajid Javid said: “As a one nation government we are making sure that every part of Britain benefits from our growing economy and today more than 1.4 million of Britain’s lowest-paid workers will be getting a well-deserved pay rise.
The increase for apprentices is the largest in history making sure that apprenticeships remain an attractive option for young people. While the National Minimum Wage will see the largest real-terms increase since 2007.
From 1 October 2015:
The GMB trade union welcomes the additional 20p on National Minimum Wage for 1.4 million workers but said that £6.70 per hour is NOT a living wage.
On tax credit cuts from April 2016 for 2.62 million workers the minimum loss will £23.72 per week and the average loss will be £34 per week for 3.3 million working families, the union says.
Paul Kenny, GMB General Secretary, said: “The additional 20p per hour for 1.4 million lower paid workers is welcome but as the Chancellor recognized £6.70 per hour is not a living wage. Employers like NEXT who can afford to pay a living wage should do so without delay.
“The Government must also step up enforcement and enable trades unions and local councils to contact HMRC to report employers who are not paying the rate.
“These same workers and their families face a serious loss of income from 1st April 2016 when tax credits are cut. GMB assess that for 2.62 million the minimum loss will £23.72 per week and that over time that the average loss will be about £34 per week for 3.3 million working families.
“For the huge numbers of working families that will be hit by cuts in tax credits the answer is simple – they should join a union to fight for better pay from employers who can well afford it as Osborne confirmed. “
Have your say on minimum wage rates
The Government is making changes to the UK minimum wage rates and has asked the Low Pay Commission (LPC) to report and gather evidence on these new arrangements.
It has asked the LPC to report on the future level of the existing UK minimum wage rates, by February 2016. It has also asked the LPC to report on the future level of the new National Living Wage (NLW), which will be introduced in April 2016 and applies to workers aged 25 and over.
As part of evidence gathering a public consultation has been launched including a short survey which runs until 25 September 2015.
Scotland on track to hit Living Wage target
A significant milestone in the push to have 500 Living Wage-accredited employers in Scotland has been reached. Beatson Cancer Charity has been confirmed as the 300th employer to be accredited, meaning that Scotland is well on track to reach its target by March next year.
The charity delivers a range of patient and family support including patient wellbeing and complementary therapy services. These are delivered through their unique and award-winning Wellbeing Centre and throughout the Beatson West of Scotland Cancer Centre and related facilities throughout the West of Scotland.
They also provide funding for a range of specialist posts including specialist nursing, radiography, physics and research-based staff as well as providing funding for enhanced medical equipment, innovative service developments, unique research projects and developmental staff training.
Cabinet Secretary for Fair Work, Skills and Training Roseanna Cunningham said: “The Scottish Government is committed to fairness and supporting those on the lowest incomes. We recognise the real difference the Living Wage can make to working people and are leading by example by becoming the first accredited government in the UK earlier this year.
“We have been working closely with the Poverty Alliance to encourage employers to seek accreditation and today’s landmark demonstrates excellent progress in our aim to have 500 employers signed up by next March.
“The charity and its staff is a key partner of NHS Greater Glasgow and Clyde and of NHS Scotland and they should be commended for their work in supporting the treatment, care and wellbeing of current and former cancer patients and their families. Today’s news ensures that all staff at the charity will be paid the Living Wage, good news for staff and a good example set for the sector in Scotland.
“Research shows that the Living Wage can enhance productivity, reduce absenteeism and improve staff morale, but we need even more organisations to recognise those benefits and sign up for accreditation and help those on the lowest pay.”
David Welch, Chief Executive of Beatson Cancer Charity said: “Beatson Cancer Charity is proud to be the 300th Living Wage-accredited employer and to have contributed to reaching this significant landmark. We are committed to continue to support this initiative and to ensuring that all of our staff are well supported and paid a fair wage for their work.”
Peter Kelly, Director of the Poverty Alliance said: “Warm congratulations to the Beatson Cancer Charity on becoming the 300th employer in Scotland to receive accreditation as a Living Wage Employer. Over the course of the past year, employers from the public, private and third sectors in Scotland have been standing up to be counted as Living Wage Employers.
”Scotland now has the highest public awareness of the Living Wage, and has the fastest rate in terms of growth of number of accredited Living Wage Employers than any other part of the UK.”
“The Budget today puts security first. The economic security of a country that lives within its means. The financial security of lower taxes and a new National Living Wage.
“The national security of a Britain that defends itself and its values. A plan for working people. One purpose. One policy. One nation. And I commend this Budget to the House.” – Chancellor of the Exchequer George Osborne
Every Chancellor loves a little drama; that opportunity to produce a rabbit from a hat and wrong-foot political opponents and leave them floundering. George Osborne took centre stage today, delivering the first Conservative budget since 1996, and in the finest traditions of vaudeville conjurers he kept something up his sleeve, saving the best ’til last – the big finish.
Yes, there was the expected £12bn cut to welfare – although over a longer time frame – and there were small giveaways here and clawbacks there, nothing too remarkable or unexpected. And then …
“In the last five years we’ve taken the tough choices to drive down our borrowing, make our business taxes competitive and reform welfare.
“It’s because we’ve taken these difficult decisions, and overcome the opposition to them, that Britain is able to afford a pay rise.
Because let me be clear: Britain deserves a pay rise and Britain is getting a pay rise.
I am today introducing a new National Living Wage.”
Now you can call it a new National Living Wage if you want, or just an increase to the National Minimum Wage if you prefer, but whatever you choose to call it, it’s a sizeable hike: more than either Labour or the SNP offered in their respective manifestos, the government has set it to reach £9 an hour by 2020.
Working people aged 25 and over will receive it, starting next April, at the rate of £7.20p.
Along with the slashing back of public expenditure through swingeing cuts to the welfare budget, the setting of a compulsory ‘National Living Wage’ is clearly designed to get the message out that this government intends to make work pay. The announcement delighted the massed Tory ranks, with architect of the benefits reforms Iain Duncan Smith (below) particularly enthusiastic. Rarely has the ‘quiet man’ been quite so animated!
Responding for the Labour Party, acting leader Harriet Harman said: “When you’re in opposition, the temptation is to oppose everything the government does – and believe me, I feel that temptation. But we best serve this country by being a grown-up and constructive opposition.
“So while we will fiercely oppose policies that hit working people, and we will expose policies that are unworkable, where the government comes forward with ideas that are sensible we will be prepared to look at them.”
On Scotland, Mr Osborne said very little: “But what really drives this government, is building up other parts of our United Kingdom, as a balance to London’s strength.
“For Scotland, we’re now delivering – as promised – major devolution of tax and welfare powers.
“The Scottish Government will soon have to answer the question; “you’ve got the powers, when are you going to use them?””
And that was it.
Scotland’s Deputy First Minister John Swinney called the Budget a ‘con trick’ which particularly hits low income households and young people.
He said the announced freeze in working age benefits and cuts to tax credits will see the most vulnerable in our society continue to be hit the hardest whilst the revised minimum wage fails to deliver a real living wage.
Mr Swinney said: “The reality is this budget is an attack on the low paid, the young and those entering the jobs market. This budget is a series of con tricks to try and hide the fact that individual households will now bear the brunt of austerity cuts.
“I support a meaningful living wage paid for by business – one that pays what people need to live, not one that fails to compensate for cuts to valuable tax credits.
“The Chancellor has not even promised to meet the current living wage of £7.85 and under 25’s will face the brunt of cuts but receive no increase in wages.
“As the Resolution Foundation – cited by the Chancellor – make clear the real living wage is based on people receiving tax credits and housing benefit so any new living wage must be far higher to compensate for it. The Chancellor’s con trick does not come close to meeting those costs.
“The Chancellor is cutting from the poor whilst paying out to the rich, he is short changing those on low incomes whilst giving tax breaks to the better off.
“There has been no easing up on austerity – he has simply shifted some of the balance from public services to the public themselves. The Scottish Government has faced a 10% cut in our overall budget for the last five years and the Chancellor today said deficit reduction would take place at the same pace in the future. Overall the scale of austerity being imposed by this UK Government remains unchanged.
“Despite revising down productivity and export figures in each of the next four years there was little in this budget to boost productivity or to set out a strategy for growth.
“The reality is that in delivering his emergency budget the Chancellor has simply exacerbated the emergency situation faced by many on low pay and low incomes.”
The Budget in summary:
1. Introducing a new National Living Wage of over £9 an hour by 2020
From April 2016, a new National Living Wage of £7.20 an hour for the over 25s will be introduced. This will rise to over £9 an hour by 2020.
2. The government will run a surplus in 2019-20
The deficit will be reduced by around 1% of GDP (the value of the economy as a whole) on average in each year, which is the same pace as over the last 5 years. This means a surplus (where more tax is raised than is spent) will be achieved in 2019-20, and debt will fall in every year. Included in this is:
Plans for the remaining savings will be set out in the autumn following the spending review.
3. The tax-free Personal Allowance will be increased from £10,600 in 2015-16 to £11,000 in April 2016
The tax-free Personal Allowance – the amount people earn before they have to start paying Income Tax – will increase to £11,000 in 2016-17.
Increases to the Personal Allowance since 2010, when it was £6,475, mean that a typical taxpayer will be £905 a year better off in 2016-17.
The government has an ambition to increase the Personal Allowance to £12,500 by 2020, and a law will be introduced so that once it reaches this level, people working 30 hours a week on the National Minimum Wage won’t pay Income Tax at all.
4. Protecting defence spending
The Ministry of Defence’s budget will rise by 0.5% (above inflation) each year to 2020-21. Up to an additional £1.5 billion a year will also be available by 2020-21 to fund increased spending on the military and intelligence agencies.
The government will meet the NATO pledge to spend 2% of national income on defence every year of this decade.
5. Reforming the welfare system to make it more affordable
The welfare system will be reformed to make it fairer for taxpayers who pay for it, while continuing to support the most vulnerable. Changes include:
6. Reforming Dividend Tax
The dividend tax credit (which reduces the amount of tax paid on income from shares) will be replaced by a new £5,000 tax-free dividend allowance for all taxpayers from April 2016. Tax rates on dividend income will be increased.
This simpler system will mean that only those with significant dividend income will pay more tax. Investors with modest income from shares will see either a tax cut or no change in the amount of tax they owe.
7. Taking the family home out of Inheritance Tax
Currently, Inheritance Tax is charged at 40% on estates over the tax-free allowance of £325,000 per person. Married couples and civil partners can pass any unused allowance on to one another.
From April 2017, each individual will be offered a family home allowance so they can pass their home on to their children or grandchildren tax-free after their death. This will be phased in from 2017-18.
The family home allowance will be added to the existing £325,000 Inheritance Tax threshold, meaning the total tax-free allowance for a surviving spouse or civil partner will be up to £1 million in 2020-21.
The allowance will be gradually withdrawn for estates worth more than £2 million.
8. The amount people with an income of more than £150,000 can pay tax-free into a pension will be reduced
Most people can contribute up to £40,000 a year to their pension tax-free. From April 2016, this amount will be reduced for individuals with incomes of over £150,000, including pension contributions.
9. The higher rate threshold will increase from £42,385 in 2015-16 to £43,000 in 2016-17
The amount people will have to earn before they pay tax at 40% will increase from £42,385 in 2015-16 to £43,000 in 2016-17.
10. Corporation Tax will be cut to 19% in 2017 and 18% in 2020
The main rate of Corporation Tax has already been cut from 28% in 2010 to 20%, in order to boost UK competitiveness. It will now fall further, from 20% to 19% in 2017, and then to 18% in 2020, benefiting over a million businesses.
11. The annual investment allowance will be set at its highest ever permanent level at £200,000
The annual investment allowance, which has previously been increased temporarily, will be set permanently at £200,000 from January 2016.
The allowance means businesses can deduct the full value of certain items, including equipment and machinery, up to a total value of £200,000 from their profits before tax. This helps them with cash flow because it means the full tax relief is given in the year items are purchased, rather than over several years.
This permanent increase will help businesses plan their spending on longer-term investments.
12. The Employment Allowance will increase by a further £1,000 to £3,000
Businesses will have their employer National Insurance bill cut by another £1,000 from April 2016, as the Employment Allowance rises from £2,000 to £3,000. The Employment Allowance gives businesses and charities a cut in the employer National Insurance they pay.
This means, next year, businesses will be able to employ 4 people full time on the National Living Wage and pay no National Insurance at all.
13. The standard rate of Insurance Premium Tax will increase to 9.5%
From November 2015 the standard rate of Insurance Premium Tax will be increased from 6% to 9.5%. Households’ insurance prices are falling and the standard rate remains lower than that of many other EU countries.
14. Clamping down on nuisance calls from claims management companies
The amount that can be charged by claims management companies – such as those that encourage claims for payment protection insurance (PPI) or personal injury insurance – will be capped, reducing nuisance calls to potential customers.
15. Restricting tax relief for wealthier landlords
Currently, individual landlords can deduct their costs – including mortgage interest – from their profits before they pay tax, giving them an advantage over other home buyers. Wealthier landlords receive tax relief at 40% and 45%. This tax relief will be restricted to 20% for all individuals by April 2020.
In addition, from April 2016, the ‘wear and tear allowance’, which allows landlords to reduce the tax they pay (regardless of whether they replace furnishings in their property) will also be replaced by a new system that only allows them to get tax relief when they replace furnishings.
16. Ending permanent non-dom status
Non-domiciled individuals (non-doms) live in the UK but consider their permanent home to be elsewhere. The UK rules allow non-doms to pay UK tax on their offshore income only when they bring it into the UK.
Permanent non-dom status will be abolished from April 2017. From that date, anyone who’s been resident in the UK for 15 of the past 20 years will be considered UK-domiciled for tax purposes.
17. Reforming the way banks are taxed
Following increasing bank profits, and to reflect changes in bank regulation, the government is:
18. 3 million new apprenticeships
3 million new apprenticeships will be created by 2020, funded by a levy on large employers. Firms that are committed to training will be able to get back more than they put in.
19. £30 million of funding for Transport for the North
Cities and counties in the North will be given even more control over local transport. Transport for the North (TfN) will be supported by £30 million in funding over 3 years, and will have more responsibility for setting out policy and investments.
20. 30 hours of free childcare for 3 and 4 year olds
From September 2017, working families with 3 and 4 year olds will receive 30 hours of free childcare – an increase from the 15 hours they’re currently offered.
21. Student maintenance grants will be replaced with loans
From the 2016-17 academic year, cash support for new students will increase by £766 to £8,200 a year, the highest level ever for students from low-income households. New maintenance loan support will replace student grants. Loans will be paid back only when graduates earn above £21,000 a year.
22. Road tax will be reformed and the money raised spent on the road network
The road tax system will be revised to make it fairer and sustainable. From 2017, there will be a flat rate of £140 for most cars, except in the first year when tax will remain linked to the CO2 emissions that cars produce. Electric cars won’t pay any road tax at all and the most expensive cars will pay more.
Existing cars won’t be affected – no one will pay more for a car that they already own. The money brought in from road tax in England will be spent on England’s roads from 2020.
The government will extend the deadline for the first MOT of new cars and motorcycles from 3 years to 4 years.
23. Public sector pay will increase by 1%
Public sector pay will increase by 1% a year for 4 years from 2016-17.
24. Making sure individuals and businesses pay what they owe
The government will continue to clamp down on tax avoidance, planning and evasion, as well as increasing resources for HM Revenue and Customs (HMRC) so they can make sure people pay the tax that’s due. This includes:
Improved productivity and an enhanced company reputation have been highlighted as key benefits of organisations implementing the Living Wage according to an independent report.
The report – Wider Payment of the Living Wage in Scotland – highlights that increased productivity is also likely to outweigh the higher wage for many firms with increased pay creating a ‘feel good factor’ in the workplace.
Reduced absenteeism and reduced staff turnover have also been outlined as potential benefits by the report, which has been published ahead of tomorrow’s second meeting of the Fair Work Convention.
Cabinet Secretary for Fair Work, Skills and Training Roseanna Cunningham welcomed the report and said: “This is a fascinating report which, on the whole, offers a very positive outlook on the benefits of paying the Living Wage.
“As well as the more obvious benefits to individuals receiving higher pay, I hope the findings on improved rates of absenteeism and better productivity help convince employers, not already on board with the Living Wage, that it could be a very positive step for their business.
“A number of respondents also mentioned the reputational benefits of being a Living Wage employer, including reinforcing their positioning as ethical and socially responsible businesses.
“The Scottish Government is committed to fairness, supporting those on the lowest incomes, and we recognise the real difference the Living Wage can make to the people of Scotland. We have been working closely with the Poverty Alliance to encourage every employer to ensure all staff receive a fair level of pay. The Fair Work Convention, which meets for the second time tomorrow, is looking a number of ways to improved workplace relations and productivity, with fair pay seen as key to their work.
“Some of Scotland’s top employers already pay the Living Wage, with Aberdeenshire beer company Brewdog, fast-becoming one of our most recognisable brands becoming the 200th accredited organisation last week.
“A KPMG report from last month showed that Scotland is most Living Wage-aware region in UK with 9 out of 10 Scots having heard of the Living Wage and a higher proportion of employees paid the Living Wage than the UK as a whole.
“But employers paying the living wage is only half the story here. The tax and benefits system needs to work smarter to make sure that people on low incomes see a greater share of any increases in pay – and we will press the UK Government to make sure this happens.”
The report ‘Wider Payment of the Living Wage in Scotland’ was carried out by Ipsos MORI and Loughborough University and can be found at: http://www.gov.scot/Publications
Among the main points highlighted:
Existing research from other countries suggests that payment of the Living Wage can improve employee wellbeing, including higher satisfaction at the workplace. However, the effects on reducing poverty are less clear, as a large proportion of the employee’s pay increase is often lost in increased taxes and reduced means-tested benefits.
A considerable body of evidence shows no significant reduction in labour demand and employment levels due to increased wage floors.
Although increased productivity is likely to outweigh the higher wage cost for many firms, this does not mean that all firms will experience increased productivity, or that it will fully cover the cost for all those that do experience it. Some employers reduce labour costs in other ways (e.g. non-wage benefits), suffer reduced profits and/or pass the costs on to consumers in the form of higher prices.
To improve the implementation process, the Scottish Living Wage employers interviewed suggested employers should:
• conduct feasibility studies to identify and deal with potential risks
• communicate openly with staff about the rationale for adopting the Living Wage
• create a clear action plan for working with sub-contractors
The Scottish Living Wage employers interviewed suggested the Scottish Government could:
• provide advice and guidance on all aspects of the implementation phase
• encourage dialogue between Living Wage employers and those considering it
• raise awareness among recruitment agencies about the Living Wage
• provide more information and evidence on the benefits of the Living Wage
• provide financial incentives to help small businesses implement the Living Wage
• improve communications on, and engagement in, setting the level of the Living Wage
In the US, evidence on additional contracting costs due to enforcing a Living Wage among public contractors suggests at most very modest effects. In the UK – which, unlike the US, is unable to make payment of the living wage a mandatory requirement – a number of public bodies have nevertheless successfully included living wage considerations in procurement exercises. However, no satisfactory way of dealing with social care contracts has been found, due to very tight public budgets and a cost base dominated by low-paid labour.
Scottish Government contractors identified actions that could support the use of procurement to encourage implementation of the Living Wage, including:
• some form of subsidy to help offset increases in wage costs among contractors
• making use of local government and non-departmental government bodies to provide information and support
• workshops with contractors to provide information and advice on best practice
• providing robust evidence on the impacts, and advice on addressing barriers.
Cyrenians, the charity committed to supporting those excluded from family, home, work or community, has been awarded living wage status.
The charity has 110 staff who deliver services in seven local authority areas as well as providing training across the country through their Scottish Centre for Conflict Resolution. Cyrenians were able to finally achieve Living Wage status by moving a Community Job Scotland trainee and a Youth Employment Scotland trainee into employment directly with Cyrenians.
CEO Ewan Aitken said: “We are delighted to have achieved Living Wage accreditation and to put our shoulder to this vital anti-poverty campaign. As part of our employability work, we have helped over 500 people into jobs this year so we know the difficulties that low wage economy causes. This achievement is a sign of our commitment to live out what we want our many partner employers to do also.”
He went on: “We know that austerity politics is going to bite even harder and those in poverty will continue to get the blame. The Living Wage is one way of helping people out of poverty whilst challenging the many myths perpetrated by those who want to deny the reality that poverty is a symptom of a broken system and not a lifestyle choice as some would have us believe.”
The Living Wage is an hourly rate set independently and updated annually, currently set at £7.85 per hour. It is calculated according to the basic cost of living in the UK. Living Wage accreditation enables employers to be recognised for paying their staff a fair, decent wage.
Peter Hunter, Director of the Poverty Alliance, congratulated Cyrenians on becoming an accredited Living Wage Employer. “Cyrenians have shown fantastic leadership in becoming a Living Wage Employer,” he said. “The continual rise of in-work poverty in Scotland is an issue that needs to be addressed as a priority. The response requires cooperation from private, public and third sector employers. The fastest way to tackle in-work poverty is to curtail the acceptance of the minimum wage and put an onus on paying the Living Wage.”
‘Low pay is a moral scandal in our country’ – Mark Lazarowicz MP
Mark Lazarowicz MP is supporting Scottish Labour leader Jim Murphy’s plan to address the problem of low pay by offering employers tax rebates when they increase their staff’s pay to the living wage of £7.85 per hour.
Under the plans, employers would receive a tax rebate of up to £1000 for every low paid worker who gets a pay rise.
The average rebate would be £445, meaning that if every low paid worker across Scotland was given the living wage, business would get a windfall of over £180 million.
•a 25% fall in absenteeism
•80% of employers believing the living wage has enhanced the quality of the work of their staff
•66% of employers reporting a significant impact on recruitment and retention within their organisation
Over 400,000 Scots are currently paid less than the living wage – with an estimated 39,000 in Edinburgh alone – and Scottish Labour argues the living wage is best for business and best for fairness.
The North & Leith MP said: “Low pay is a moral scandal in our country and it is also holding our economy back. This plan to extend the living wage could lift thousands of Scots out of low pay. We could give a pay rise to as many as 39,000 workers in Edinburgh alone.
“Edinburgh City Council has already led the way by becoming a living wage employer so it is committed to paying all of its staff at least the living wage. Local businesses will see a bonus too, with £17 million available for businesses in Edinburgh.
“The research shows that absenteeism and staff turnover go down whilst performance and morale go up. It means a happier, more efficient workplace.
“A lot of businesses in Scotland aren’t turning over millions. They are on the sharp end budgeting month to month, they might want to give a pay rise to their staff but the conditions aren’t right.
“That is why Scottish Labour has a plan to convince these businesses to pay the living wage. We will use make work pay contracts to incentivise better pay for staff – and better performance for business.”
‘The Low Pay Commission should do what it says on the tin – and fight for the low paid’ – GMB General Secretary Paul Kenny
The Low Pay Commission LPC) has recommended to the Government that the adult rate of the National Minimum Wage should rise by 3 per cent to £6.70 from October – but trade union leaders and anti-poverty campaigners argue the increase simply isn’t enough
The LPC’s aim is to advise on a rate that protects as many low-paid workers as possible without damaging jobs or the economy. The Commission says it has carefully weighed the risk of doing too little to raise the earnings of the lowest paid against the risk of recommending more than business and the economy can afford.
With inflation now forecast at 0.5 per cent, would, if accepted by the Government:
Commenting on the recommendation, David Norgrove, Chair of the LPC said: “Last year we were pleased to recommend the first real terms increase in the value of the minimum wage since the recession. We argued that the minimum wage had proved its worth over the course of the slowdown, increasing relative to earnings generally and protecting the low paid during the downturn in a way not seen before albeit, as with wages for all other workers, its real value fell.
“Sharp increases in the minimum wage would put jobs at risk – not least bearing in mind pressure on low-paying sectors and small firms. We do believe however that the continued recovery, and in particular the impressive growth in employment of the low paid, should this year allow a further increase in the real and relative value of the minimum wage.
“An increase of 3 per cent to £6.70 is a larger real terms increase than last year and, on the basis of the most recent Bank of England inflation forecast, should restore three-quarters of the fall in the real value of the NMW relative to its peak in 2007.
“We judge that the improved economic and labour market conditions mean once again that employers will be able to respond in a way that supports employment. However, our recommendation this year is predicated on a forecast which foresees lower costs for business in fuel and energy, a strong economic performance, significant recovery in earnings across the economy and rising productivity. If these expectations are not borne out over the year we will take this into account when considering next year’s recommendation”.
As well as its recommendation for the adult rate, the Low Pay Commission has also recommended:
However some argue that the increase doesn’t go far enough. The GMB trade union has called on Vince Cable to revise the LPC’s proposal of £6.70 National Minimum Wage from October to make up ground lost during the recession. The GMB says the rate should be at least £6.99 per hour.
Paul Kenny, GMB General Secretary, said “This is a missed opportunity by the Low Pay Commission to uprate the national minimum wage to the real term rate that it was before the recession hit in 2007. Vince Cable should revise the proposal.
“With the economic recovery under way there is no justification for the national minimum wage not going back to where it was in real terms before the recession.
“The Low Pay Commission should have recommended a rate of at least £6.99 per hour from October 2015 to make up the ground lost since the rate was fixed at £5.65 from 1st October 2006 before the recession.
“The Low Pay Commission should do what it says on the tin – and fight for the low paid.
“There has to be a concerted effort to make work pay. If this was done, staff would not need their meagre wages to be topped up by taxpayers with family tax credits and housing benefits so as to make ends meet.
“GMB members tell us that in their experience at least £10 an hour and a full working week is needed to have a decent life free from benefits and tax credits. Less than £10 an hour means just existing not living. It means a life of isolation, unable to socialise. It means a life of constant anxiety over paying bills and of borrowing from friends, family and pay day loan sharks just to make ends meet.”
The Poverty Alliance is spearheading the campaign for a living wage in Scotland.
“The Scottish Living Wage Campaign believes that a job should help you out of poverty, not keep you there.
“The National Minimum Wage is not enough for individuals in Scotland to access the essentials of everyday life. £6.50 per hour will just never be enough to cover the day to day basics, nevermind to save some money or plan for emergencies.
“Hundreds of thousands of workers are being paid wages that basically equate to poverty pay. This is simply not right.”
Thousands unfairly treated at work
Thousands of Scots face unfair working practices which leave them in desperate and miserable situations, according to new evidence from Citizens Advice Scotland (CAS).
Last year the Scottish CAB service saw 46,540 instances of unfair treatment at work – an increase of 5.5% on the previous year – and already this year the figures look set to be even higher.
Examples include unfair dismissal, non-payment of wages, cancellation of holidays, bullying, racism and denial of sick pay.
Many workers have told CAS they would like to take their case to tribunals but can’t afford to do so.
CAS new report ‘Fair Enough?’ sets out these problems in detail and suggests solutions to make Scotland’s workplaces fairer. It is being sent to Ministers, MPs and MSPs.
Publishing the report, CAS spokesman Rob Gowans said: “In Scotland we like to see ourselves as a generally fair, socially just country. Sadly, the evidence seen by CAB advisers every day tells a different story. We know that many Scots who are unemployed face severe hardship. But many who do have jobs are living on low incomes and also facing extremely unfair conditions at work.
“The evidence we present today is a snapshot of the kind of employment cases we see. Of course it’s important to say that most employers are fair and treat their staff well. But sadly it’s clear that there are many rogue employers in Scotland, and also that the system is in many ways stacked against workers who want to challenge unfairness at work.
“Some of the unfair employment practices we see put workers in difficult, complex and miserable situations. In exposing these today we want to raise awareness of these problems, but also to argue the case for change. All of the problems we identify in this report can be fixed, and we suggest ways of doing that.
“Because Scotland’s workers deserve better. And it is also in the interests of government and society as a whole that fair employment is promoted. Workers in low quality, stressful jobs have poorer general health, and poor daily quality of life than other groups – even those who are unemployed. It is also important to ensure that unscrupulous employers who wilfully undermine their employees’ basic rights do not gain an unfair advantage over fair employers.”
The sort of cases outlined in the report include:
The full report:
Fair Enough Protecting Scotland’s workers from unfair treatment Feb 2015
