Government talks big, acts small

Frances O’Grady outlines the TUC recovery plan to combat pay squeeze

Britain still needs a pay rise. As fuel, energy and food prices rocket, working people face a big cost of living crisis. The government’s shameful decision to cut Universal Credit by over £1,000 is pushing low-income families into destitution. Boris Johnson talks about building a high-wage economy, but queues at food banks are soaring. As wages stagnate and bills rise, middle-income workers face being hammered too.

Trade unions are leading the campaign for change. The TUC is calling for a New Deal for working people, delivering stronger rights at work, better wages and new powers for unions to bargain collectively. We’re making the case for huge investment in our public services and in the clean, green industries of the future. The latter would create over a million good, well-paid jobs – and show that ‘just transition’ is more than a mere slogan.

The government talks big about “leveling up” and “building back better”, but acts small. The chancellor’s recent Budget completely failed to address the realities confronting working people. After years of pay misery, public sector and key workers who’ve got us through the pandemic discovered the pay freeze had become a pay squeeze. And buried in the Budget’s small print was a startling admission: that workers face another half-decade of wage stagnation.

With inflation at a 10-year high, household budgets are under huge pressure. But after over a decade of Tory government, real wages have only just returned to 2009 levels. Real pay for paramedics has fallen by over £3,000 since the Conservatives came to power, with nurses losing £2,500 and teachers £2,000. The PM’s promise of a surge in wages rings hollow to millions of workers.

That’s why pay is right at the top of the TUC’s agenda. We’re calling for an immediate increase in the minimum wage to £10 an hour, a ban on zero hours contracts, and for workers on boards to deliver fair shares for all. More fundamentally, we want stronger rights for unions to access workplaces and bargain collectively for better terms and conditions. New pay agreements covering different sectors – raising standards across the board – would be a great place to start.

The UK has one of the worst records on low pay of all the OECD industrialised countries. Despite being one of the richest economies in the world, one in six workers earns less than the real living wage of £9.90 (£11.05 in London). And as a result, two thirds of kids growing up in poverty have at least one parent in work: a scandal in a modern industrial democracy.

So the case for a real living wage is unanswerable. While a growing number of firms are becoming real living wage employers – and sometimes demanding the same from their suppliers – far too many bad bosses are getting away with poverty pay. And the TUC believes there is an economic, as well as a moral, imperative to act. Rather than squirreling their money away in tax havens, low-paid workers spend their wages on the high street and in their local economy. That leads to a virtuous circle of demand, growth and regeneration.

As we make the case for higher wages for working people, the trade union movement is also grappling with the challenges posed by Covid-19. Although the vaccines have made a big difference, the NHS is under huge strain this winter. Throughout the crisis, unions have called for robust health and safety measures, Covid-secure working and greater flexibility for all working people, not just professionals with Zoomable jobs.

We’ve also demanded, and won, financial support for working people. The TUC and unions won the furlough scheme that saved the livelihoods of one in three workers. That’s one of the reasons why the TUC has called for ministers to set up a National Recovery Council, bringing together government, businesses and unions to discuss how to build a stronger, fairer post-pandemic economy – because there can be no recovery for workers if we are locked out of the room.

There can be no doubt that this must be a watershed moment. After all, it’s the labour of working people – not captains of industry, hedge fund managers or private equity barons – that has got us through the crisis. And those workers deserve an economy that works for them: with higher wages, decent jobs and investment in our public services.

The TUC will keep banging the drum for change. Brexit, the pandemic and the broader challenges of tech change and the climate emergency all demand we build a more just, more resilient future. As more groups ballot for action, workers are demanding dignity and a fair share of rewards.

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