Economy//

Cameron has betrayed the low paid

Written by: Owen Smith on 5 February, 2013
Filed under Economy

In May 2010, at a Citizens UK election rally, David Cameron declared the Living Wage to be an idea “whose time had come.”  Two months later, in a volte face that has since become a hallmark of his Government, the Coalition announced that it was to abolish a body that guaranteed a Living Wage of at least £7.66 per hour for 45,000 British workers. For those men and women, at least, the idea had not only come, but gone – and at the stroke of a Tory pen.

The Agricultural Wages Board, created in 1948 by Attlee’s great reforming government, has for sixty five years been responsible for setting wages, terms and conditions for British farm workers. The Board survived the cull of Wages Councils undertaken by the Thatcher and Major governments and currently sets wages at six separate grades for 150,000 agricultural labourers and craftsmen. The lowest grade is set at £6.21, a couple of pence above the current minimum wage, but 76% of workers are on grades 2 to 6, enjoying wages of between £6.96 and £9.40 per hour. The abolition of the board will remove the protection these rural workers have enjoyed and will no doubt see unscrupulous employers either seek to reduce wages to the statutory minimum or to ease out those on higher grades in favour of cheaper, new employees.

In Wales, where the wages of 13,849 workers are governed by the AWB, the Welsh Labour Government is fighting a rearguard action against its abolition and last week proudly pledged to legislate for its retention or replacement, within Wales, if the Coalition presses on with its plans. The Welsh campaign, led by the Labour Assembly Member for Pontypridd, Mick Antoniw, and carried forward by the Welsh Agriculture Minister, Alun Davies, is prompting a dynamic conversation within the party and the wider, Welsh Labour movement about the future of the minimum wage, its relationship with Labour’s support for a non-statutory Living Wage and the broader compass of decent, ‘Living’ terms and conditions that were provided for under the aegis of the Wages Councils, including the AWB, but are unaffected, of course, by the national minimum wage.

The history of government intervention in our labour markets, to influence earnings or conditions, is more than a century old. It was Churchill, then a Liberal of course, who had a hand in the establishment of the original Wages Councils as part of the reform programme which centred on the People’s Budget of 1909 and which broke with the laissez-faire economics of the Victorian age.

The Perambulator and Invalid Carriage Wages Council, the Button Manufacturing Wages Council and the Ostrich and Fancy Feather and Artificial Flower Wages Council may today seem arcane reminders of a long-gone age, but to the workers in the ‘sweated trades’, as they were known at the time, they represented a shield from exploitation and poverty pay, the triumph of collectivism and civilisation over the free-market ethos of private industry.

Of course, not everyone subject to low wages was protected by the Wages Councils, though by the 1960’s over 60 separate sectors were covered and at the point of their final eradication in the early 1990’s some 2.5 million workers in low-paid jobs were under their umbrella. The Agricultural Wages Board was the one council that even Mrs Thatcher dared not abolish, in recognition of the particularly parlous position of farm employees, isolated from their fellow workers – literally and figuratively – and employed by equally isolated farm owners and tenants.

For today’s Labour Party, the councils may hold some important lessons, and the actions of the Welsh Labour Government might provide some inspiration. The first lesson can be appreciated by looking at the make- up of the Wage Councils. Each one consisted of an equal number of employer and worker representatives, plus a maximum of three independent members. In that respect, their complexion was not radically dissimilar to that of the Low Pay Commission established by labour in 1998 to advise the government on setting the National Minimum Wage. However, a better modern comparator for the Councils might be the remuneration boards of individual corporations, where no such balance or emphasis on workers’ representation exists at present. Those early 20th century traditions of shared responsibility between workers and bosses, or labour and capital, if you like, were maintained in other European societies, notably in Germany and Scandinavia, but have been gradually eroded in our own society, and need to be remade anew.

The second lesson from the councils relates to the breadth of their remit. Not just concerned with minimum rates of pay, councils also policed the terms and conditions of workers, establishing expected periods of sickness pay, holidays, overtime premia and rest-breaks. Farm workers protected by the modern AWB enjoy similar support, and the abolition of the board will see paid holidays reduced by as much as a week, statutory sick pay, overtime for night working and training time all reduced or cut.

Those responsibilities, to look beyond the bottom line, speak to our contemporary fears about the eroding quality of people’s lives and the need to remake and restate the case for work that not only pays enough money to live on but also allows enough time and energy to enjoy a life outside employment. Too many in our country are working their lives away, often holding down multiple low waged jobs, and with diminishing time to devote to their families, their passions, their physical health or their mental well-being. Of course, Wages Councils didn’t guarantee that time or space either, but a century after their inception we might have hoped to have progressed beyond the financial bottom line.

Unfortunately, however, for millions of our fellow citizens, the bottom line remains vital, paramount even. Despite the inception of the Minimum Wage, pay rates in Britain have stagnated for much of the last decade. Today they are growing at just half the rate of prices; leaving more and more of our fellow citizens to fall into poverty and debt. The Squeezed Middle, identified by Ed Miliband, is the defining demographic of our age, as Ed’s call for the creation of more ‘responsible capitalism’ must become our generation’s rallying cry. We need our employers – public and private – to create jobs that provide dignity, opportunity, and a fair share of the prosperity they generate. This is essential for building a more stable economy and a more cohesive society. Essential for tackling the gross inequalities that persist in Britain, and which handicap our productivity, our prosperity and our progress.

The living wage campaign which exhorts employers to take a more ethical and equitable approach to wages and profits is a crucial step, but we should not forget the actions of earlier generations – those that created the Wage Councils or delivered the minimum wage – and we should not forswear the option of such interventions in future, if companies and corporations cannot rise to the challenge we’ve set.

In Wales, the Welsh Labour Government is rising to the challenge, refusing to accept that Welsh farm workers must endure increased insecurity and lesser wages and conditions. In Westminster, too, we will continue to argue for retention of the AWB as the Bill for its abolition continues its passage through the Lords and House of Commons. The Agricultural Wages Board is a One Nation institution. Its job has been to protect the living standards and ensure fairness for the men and women who work the land of our nation, and One Nation Labour will continue to fight for its future.