Sunday 1st April marked the 25th anniversary of the UK getting a minimum wage (writes TUC General Secretary PAUL NOWAK).
Nowadays when we think of the national minimum wage (NMW), we think of what is roundly accepted as one of the great policy successes of our time. But we shouldn’t kid ourselves that there was unanimity about the need to raise wages.
Britain was full of employers and employers’ organisations predicting the minimum wage would cause mass unemployment and economic ruin.
The CBI warned a NMW “could result in rising prices, business closures and unemployment”. That it would “undermine flexibility and was a poor way to tackle poverty”. They wanted all new employees to be exempted from the minimum wage for the first six months! 1
They were wrong!
The minimum wage started off at £3.60. With no loss of jobs, and no economic meltdown. And in recent years, it’s gone up substantially. And it’s done so with no negative impact on jobs.
History proved all those doomsday warnings emphatically wrong. And I think there are lessons there for all of us. So here’s three:
First: the NMW was a bold policy and we need to be equally bold for its future.
The TUC is clear, we now need to set the bar higher. That means ministers should set a bolder Low Pay Commission remit:
A target of 75 per cent of median pay.
Getting us faster towards a £15 an hour minimum wage for all.
Raising the pay of millions
Making the minimum wage a real Living Wage.
Second: sometimes we have to face down those whose instinctive reaction is to say no to measures that improve the lives of working people.
This is vital if we are going to deliver a much-needed new deal for working people in this country.
1 in 9 workers are in insecure work.
Record numbers of young people on zero hours contracts.
Seventy per cent of the kids who live in poverty have working parents.
The New Deal is the right thing to do. Not just morally, but economically. It will establish a level playing field. Stop decent employers from being undercut by the cowboys. And make sure that everyone has a secure job they can build a life on.
Just like the minimum wage, good employers have nothing to fear from the New Deal. But that hasn’t stopped some employers organisations’ warning of an economic apocalypse if Labour’s New Deal was made law. And the arguments are exactly the same as they were 25 years ago. It will cost jobs. Put employers out of business. Reduce flexibility.
The then British Hospitality Association said back in 1997 that the NMW would destroy 32,000 jobs in the industry2 . Spoiler alert: it didn’t!
They were wrong then, and they are wrong now. That’s why Labour should resist the out of touch, out of date siren voices from the 90s. Now is the time to forge a new political consensus on tackling the scourge of insecure work and deliver the New Deal in full.
Third and final lesson.
The NMW has succeeded because it has been underpinned by what might be unfashionably called social dialogue. Employers, unions, supported by independent academics, working with government to deliver a minimum wage. We could do with more of that approach today.
Our so-called flexible labour market has failed far too many people. It’s led to massive rewards at the top and stagnant wages for everyone else. Unleashed epic insecurity and in-work poverty. And actively undermined our productivity.
So it’s time for a new approach.
Time to apply the lessons of the minimum wage. Time for the New Deal for workers that Britain needs.
NEW ANALYSIS reveals 2 in 3 zero hours contract workers have been with their current employer for over a year
TUC says a ban on zero-hours contracts is “long overdue”
Union body says “employers need to get on board with the New Deal”- following business calls to scale back the package.
The overwhelming majority of zero-hours contract workers are “stuck” on zero hours contracts in the long-term, the TUC has warned.
The union body warns hundreds of thousands of workers are being trapped in low-pay and insecurity, with bad employers “parking workers on zero-hours contracts for years on end”.
The new analysis reveals:
2 in 3 (66%) zero-hours contract workers have been with their current employer for over a year.
Almost half (46%) of zero-hours contract workers have been with their current employer for over 2 years.
Astonishingly, 1 in 8 (12%) zero-hours contract workers have been with their current employer for over 10 years.
Only a minority of zero hours contract workers are on the precarious contracts as a stop gap, temporary measure. Just 7% of zero-hours workers have been with their current employer less than 3 months.
TUC polling in 2021 showed that by far the most important reason that people take zero-hours contract work is because that is the only work available.
Almost half (45%) of respondents said that this was the most important reason for them being on zero-hours contracts while 16% said it was the typical contract in their line of work.
Just 9% cited work-life balance as the most important reason – and the TUC says many in this group would prefer the opportunity to work flexibly within a secure job.
Structural racism in action
The latest available data show there are 1.15 million people on these contracts.
Black and minority ethnic (BME) women are nearly three times as likely to be on zero-hours contracts as white men (6.8% compared to 2.5%),
TUC analysis published in August revealed the number of BME workers in insecure work more than doubled from 2011 to 2022 (from 360,200 to 836,300).
The TUC says this increase in zero-hours contracts for BME workers reflects “structural racism in the jobs market”.
Lack of control
The TUC says zero-hours contracts hand the employer total control over workers’ hours and earning power, meaning workers never know how much they will earn each week, with their income subject to the whims of managers.
The union body argues that this makes it hard for workers to plan their lives, budget and look after their children.
And it makes it harder for workers to challenge unacceptable behaviour by bosses because of concerns about whether they will be penalised by not being allocated hours in future.
Such insecurity can be particularly challenging for those who have caring responsibilities, who are overwhelmingly women, says the TUC.
New deal
The TUC says a ban on zero-hours contracts is “long overdue” – and is calling for all workers to have a right to a contract that reflects their regular hours.
Recent TUC polling revealed 6 in 10 (63%) already support a ban zero-hours contracts – including 60% of Conservative 2019 voters.
Labour is promising a ban on zero-hours contracts as part of its New Deal for Working People – which it says it will deliver with an employment bill in its first 100 days, if elected.
The union body says “employers need to get on board with Labour’s New Deal”- following business calls to scale back the package.
TUC General Secretary Paul Nowak said: “Everyone should be treated fairly at work. But too many workers – especially Black and ethnic minority women – are trapped in low-paid jobs on zero-hours contracts, with few rights and protections and no guarantee of shifts.
“Bad employers are parking workers on zero hours contracts for years on end. It’s not right.
“These precarious contracts hand almost total control over workers’ hours and earning power to managers – making it nigh on impossible to plan budgets and childcare.
“Insecure work has boomed on the Conservatives’ watch over the past 14 years – with the number of workers on zero hours contracts hitting the one million mark.
“That’s why a ban on zero hours contracts is long overdue. Working people should have a right to a contract that reflects their regular hours of work.
“It’s time for a New Deal for Working People, like Labour is proposing – which includes a ban on zero hours contracts, ensuring workers get reasonable notice of shifts and an end to fire and rehire.”
Commenting on reports in The Times on business calls to scale back Labour’s New Deal for Working People, alongside a poll showing the plans are “extremely popular” with the public, TUC General Secretary Paul Nowak said: “Employers need to get on board with Labour’s New Deal for Working People – and good employers will.
“The UK’s long experiment with a low-rights, low-wage economy is a complete failure. The Tories’ lack of an economic plan for jobs, growth and living standards has cost workers and industry dear.
“Labour’s New Deal for Working People stands in stark contrast to the Conservative’s dire record.
“And it would be good for our economy too. Decent, secure jobs are essential to building a motivated, healthy, innovative workforce – all vital for high productivity growth.”
Scotland’s councils must radically change how they operate – particularly how they collaborate with partners – if they are to improve and maintain services to their communities.
Councils worked well with their partners to address the impacts of Covid-19. They need to implement the lessons learned during the pandemic in order to now cope with reducing budgets, growing demographic and workforce pressures, and declining performance across some services.
The Scottish Government and COSLA urgently need to finalise the planned ‘New Deal’ settlement for local government, allowing for more long-term planning, flexibility and transparency in councils’ budgeting process.
Currently, an increasing proportion of funding is ringfenced for national priorities; this constrains councils from making decisions about how to best use money to address the local needs of their citizens and communities.
Councils must now rethink how they work together, and with local partners and communities, to provide financially sustainable services whilst tackling national issues such as climate change, child poverty and inequalities. Few councils provide services jointly or share support services across different councils.
Councils also need better data in order to ensure that they can demonstrate that their services are meeting their citizen’s needs.
Tim McKay, Acting Chair of the Accounts Commission said: “The New Deal for local government, agreed between the Scottish Government and COSLA, is long overdue. Putting this in place will give councils longer-term financial stability, supporting them to make decisions and make the fundamental changes that are urgently needed.
“Councils have gone beyond the point where making savings is enough. If the change needed doesn’t happen now, some services will continue to get worse or deeper cuts will be made. This will impact communities and individuals that are already at crisis point with the effects of inequality and persistently high poverty.
“Councils need to have open and honest conversations with their communities and staff about the future of council services.”
COSLA President Shona Morrison has said that Councils are already at the forefront of service provision and are probably the most transformative and collaborative part of the public sector in Scotland.
The COSLA President also called on other parts of the public sector to be as radical and transformative as Scottish Local Government and praised how well Scottish Local Government collaborates with partners in particular.
Commenting yesterday (Wednesday) in response to the Accounts Commission Overview Report, Councillor Morrison said: “As today’s report recognises, Councils worked well with their partners to address the impacts of Covid-19.
“The report also recognises the huge challenges Councils face due to budget constraints, increased cost pressures and demand, and increases in directed and ringfenced funding. As we have all seen, increasingly difficult choices are required about spending priorities and service provision given reducing budgets coupled with growing demographic and workforce pressures.”
Councillor Morrison added: “In addition, we are working with the Scottish Government on a ‘New Deal’ for Local Government, which will enable more long-term planning, more transparency in the budget setting process and a reduction in ring fenced funding for national priorities which constrains councils from making decisions about how to best use money to address the needs of their local communities.”
She concluded: “Only on Monday of this week, in our response to the Finance and Public Administration Committee’s call for views on public service reform, we highlighted the significant efficiencies and reforms that councils across Scotland have already made in response to successive real-terms cuts to core funding for over a decade.
“We also welcomed the Scottish Government’s renewed commitment to work collaboratively with Local Government to deliver on shared priorities, including tackling child poverty and achieving a just transition to net zero.
“Today’s report from the Accounts Commission and our response to the Finance and Public Administration Committee deliver exactly the same message. Councils are uniquely placed to be the key partner in the Scottish Government’s public service reform programme and should be further empowered to better support local service delivery.”
Councils and Scottish Government ‘working hand-in-hand’
First Minister Humza Yousaf has reaffirmed the Scottish Government’s commitment to resetting the relationship with local authorities in a meeting with COSLA President Shona Morrison.
A New Deal for local government has been embodied in the appointment of a dedicated Minister for Local Government Empowerment and Planning, Joe FitzPatrick, who joined the meeting alongside Deputy First Minister Shona Robison.
The New Deal will be jointly agreed with COSLA and will provide greater flexibility over local funding and clear accountability for delivering shared priorities.
The First Minister said: “These early discussions in my first week as First Minister have been an important opportunity for me to reaffirm the Scottish Government’s commitment to working collaboratively with local government.
“Together, local and national governments work hand-in-hand to deliver on our shared priorities for the people of Scotland and the vital public services in our communities whilst recognising the considerable financial pressures across the public sector.
“Work is already underway on developing a New Deal for Local Government. We will work together, through regular and meaningful engagement, to progress this, explore a new fiscal framework for councils and reform our public services.”
COSLA President Shona Morrison said: “I was very pleased to get a meeting with the new First Minister in his first week in office. It was both a productive and positive meeting with a range of issues discussed.
“I certainly hope we can build a strong working relationship as we jointly go about delivering for the people of Scotland.”
This government is committed not just to defeating coronavirus but to using this crisis to tackle this country’s great unresolved challenges of the last three decades.
To build the homes, to fix the NHS, to tackle the skills crisis, to mend the gap in opportunity and productivity and connectivity between the regions of the UK, to unite and level up.
The government will build back better, build back greener, build back faster.
We will invest in and accelerate infrastructure across the UK; promote a clean, green recovery; reform our planning system; and strengthen the Union and local government.
All of these changes will make life better for the people of this great country and unleash Britain’s potential.
The Chancellor will unveil more of this plan next week, and we will use the forthcoming Spending Review and Autumn Budget to set the direction for the rest of this parliament.
Investing in and accelerating infrastructure
The government is committed to building a Britain with world class infrastructure. Spring Budget 2020 set out that the public sector will invest £640bn over five years in our future prosperity.
We are redoubling our efforts to get on with this now, in support of economic recovery and jobs right across the country by bringing forward £5bn of capital investment projects, supporting jobs and the economic recovery, including:
£1.5bn this year for hospital maintenance, eradicating mental health dormitories, enabling hospital building, and improving A&E capacity. This will improve patient care, make sure NHS hospitals can deliver world-leading services and reduce the risk of coronavirus infections.
£100m this year for 29 projects to improve our road network to get Britain moving, from bridge repairs in Sandwell to boosting the quality of the A15 in the Humber region. Plus £10m for development work to unblock the Manchester rail bottleneck, which will begin this year.
Over £1bn to fund the first 50 projects of a new, ten-year school rebuilding programme, starting from 2020-21. These projects will be confirmed in the autumn, and construction on the first sites will begin from September 2021.
£560m and £200m for repairs and upgrades to schools and FE colleges respectively this year.
£142mn for digital upgrades and maintenance to around 100 courts this year, £83m for maintenance of prisons and youth offender facilities, and £60m for temporary prison places, creating thousands of new jobs.
£900m for a range of ‘shovel ready’ local growth projects in England over the course of this year and next. This will enable local areas to invest in priority infrastructure projects to drive local growth and jobs. This could include the development and regeneration of key local sites, investment to improve transport and digital connectivity, and innovation and technology centres to build on local comparative advantage
£96m to accelerate investment in town centres and high streets through the Towns Fund this year. This will provide all 101 towns selected for town deals with £500k-£1m to spend on projects such as improvements to parks, high streets, and transport.
We will establish a new Infrastructure Delivery Taskforce, named ‘Project Speed’.
Led by the Chancellor, Project Speed will bring forward proposals to deliver government’s public investment projects more strategically and efficiently. This will ensure we are building the right things better and faster than before.
The taskforce will aim to cut down the time it takes to develop, design and deliver vital infrastructure projects. For example, it will look at how it can address outdated practices and identify blocks to progress.
Projects will include the 40 new hospitals the government has committed to build and the school rebuilding programme announced yesterday.
In the Autumn, the government will also publish a National Infrastructure Strategy which will set a clear direction on core economic infrastructure, including energy networks, road and rail, flood defences and waste.
The Government also intends to bring forward funding to accelerate infrastructure projects in Scotland, Wales, and Northern Ireland – working with the devolved administrations to identify where we can get spades in the ground, build our communities, and create jobs faster for citizens across the United Kingdom.
We will also carry out a review to look at how best to improve road, rail, air and sea links between our four nations to create a more connected kingdom.
Through the Barnett formula, the UK Government has already given the Scottish Government £5.4bn, the Welsh Government £2.4bn, and the Northern Ireland Executive £1.7bn in capital funding for devolved areas this financial year. We would encourage them to accelerate infrastructure projects in the same way that the UK Government is doing.
Promoting a clean, green recovery
The UK was the first major economy to commit to net zero emissions by 2050 in law. We already have a proven track record of cutting emissions while growing the economy, with over 460,000 UK jobs in low-carbon businesses and their supply chains.
We will continue to build on this even further and deliver a stronger, cleaner, more sustainable economy after this pandemic.
The Government will continue to set out further measures as part of its green agenda in the run up to COP26 in November 2021.
Transport:
We are making additional funding available this year to attract investment in ‘gigafactories’, which mass produce batteries and other electric vehicle components, enabling the UK to lead on the next generation of automotive technologies.
£10m of funding will be made available immediately for the first wave of innovative R&D projects to scale-up manufacturing of the latest technology in batteries, motors, electronics and fuel cells.
Additional funding will also allow us to progress initial site planning and preparation for manufacturing plants and industry clusters, with sites under consideration across the UK.
This funding forms part of our commitment to spend up to £1bn to attract investment in electric vehicle supply chains and R&D to the UK.
And this comes on top of the over £1bn we provided at Budget to support the rollout of ultra-low emission vehicles in the UK via support for a super-fast charging network for electric vehicles, and extension of the Plug-In Grant schemes.
The UK will also aim to produce the world’s first zero emission long haul passenger aircraft.
Rebuilding our natural infrastructure:
Re-foresting Britain by planting 75,000 acres of trees every year by 2025.
£40m Green Recovery Challenge Fund to help halt biodiversity loss and tackle climate change through local conservation projects, connecting more people to the outdoors by delivering up to 5,000 jobs.
Innovation:
Up to £100m of new funding for research and develop a brand new clean technology, Direct Air Capture (DAC), which captures CO2 emissions directly from the air around us. If successful, DAC technology could be deployed across the country to remove carbon from the air, helping sectors where it’s tough to decarbonise such as aviation.
To help bring forward this technology, the government is exploring options around carbon pricing and incentives, where the government may pay a price per tonne of CO2 captured.
Reforming our planning system
We will make it easier to build better homes where people want to live.
New regulations will give greater freedom for buildings and land in our town centres to change use without planning permission and create new homes from the regeneration of vacant and redundant buildings.
Under the new rules, existing commercial properties, including newly vacant shops, can be converted into residential housing more easily, in a move to kick start the construction industry and speed up rebuilding.
The changes include:
More types of commercial premises having total flexibility to be repurposed through reform of the Use Classes Order. A building used for retail, for instance, would be able to be permanently used as a café or office without requiring a planning application and local authority approval. Pubs, libraries, village shops and other types of uses essential to the lifeblood of communities will not be covered by these flexibilities
A wider range of commercial buildings will be allowed to change to residential use without the need for a planning application
Builders will no longer need a normal planning application to demolish and rebuild vacant and redundant residential and commercial buildings if they are rebuilt as homes
Property owners will be able to build additional space above their properties via a fast track approval process, subject to neighbour consultation.
These changes, which are planned to come into effect by September, will both support the high street revival by allowing empty commercial properties to be quickly repurposed and reduce the pressure to build on green fields land by making brownfield development easier.
The Prime Minister also announced that work will begin to look at how land owned by the government can be managed more effectively.
Ahead of the Spending Review, a new, ambitious cross-government strategy look at how public sector land can be managed and released so it can be put to better use.
This would include home building, improving the environment, contributing to net zero goals and injecting growth opportunities into communities across the country.
These announcements come alongside a package of measures to support home building across England, including:
A £12bn affordable homes programme that will support up to 180,000 new affordable homes for ownership and rent over the next 8 years, confirmed today.
Included in the affordable homes programme will be a 1,500 unit pilot of ‘First Homes’: houses that will be sold to first time buyers at a 30% discount which will remain in perpetuity, keeping them affordable for generations of families to own.
Funds from the £400m Brownfield Land Fund have today been allocated to the West Midland, Greater Manchester, West Yorkshire, Liverpool City Region, Sheffield City Region, North of Tyne and Tees Valley to support around 24,000 homes.
The Home Building Fund to help smaller developers access finance for new housing developments will receive additional £450m boost. This is expected to support delivery of around 7,200 new homes.
The government will launch a Policy Paper in July setting out our plan for comprehensive reform of England’s seven-decade old planning system, to introduce a new approach that works better for our modern economy and society.
Strengthening the Union
We will take steps to guarantee and enhance our internal market and find new ways to invest in Scotland, Wales, England and NI and focus on “levelling up” our whole country.
As above, the Government also intends to bring forward funding to accelerate infrastructure projects in Scotland, Wales, and Northern Ireland – working with the devolved administrations to identify where we can get spades in the ground, build our communities, and create jobs faster for citizens across the United Kingdom.
The Spending review will create a multi-year, UK-wide Shared Prosperity Fund which will support which will support local economic recovery by driving economic growth and tackling deprivation.
We will carry out a review to look at how best to improve road, rail, air and sea links between all parts of the UK to create a more connected kingdom.
