The case for increasing wages to cut the welfare bill

Learning from Joseph and the Chocolate Factory.

Writing in today’s Times Philip Collins produces a powerful and eloquent article arguing that we should cut the welfare bill by increasing wages. What’s more, he argues for a more moral form of capitalism to underpin it.

So what’s brought this on? Well, today JRF published our annual Minimum Income Standards report. This research asks members of the public what are the goods and services every household needs to be able to afford in order to achieve a minimum acceptable standard of living in the UK. As Collins notes:

Whether or not you agree that a few pence a week for Blu-tack is necessary, most of the costlier items are hard to dispute and they come to quite a price.

And our research shows the cost of that decent standard of living is rising fast – up 25 per cent over the last five years, higher than the official rate of inflation, which was 17 per cent for the same period. This means people today need much higher earnings just to afford the same standard of living they had five years ago. As Collins argues:

The gap between the minimally decent life and reality is growing. People on low incomes are subject to a higher rate of inflation than those who are a little richer … The gap between the life that people think others should be able to afford, in a rich and lucky country, and the life that most people lead is huge.

So what would it take for people to afford a better standard of living? The research costs the basket of goods and services people say they need for a decent standard of living, and works out what that means for how much you need to earn, once tax and benefits have been factored in. The resulting hourly wage rates are substantially higher than the national minimum wage (which is currently £6.19 per hour). A single person would need to earn £8.16 an hour while a couple with two children would need to earn at least £9.91 an hour each. 

Collins argues employers have responded to this challenge before and they should do so again, learning from historical figures like Joseph Rowntree:

When he opened his chocolate factory in York in 1869, Rowntree established good pay, housing benefits and the first occupational pension scheme for his workers...

He understood that the corporation was and is a public entity, underpinned and given a license to operate by the laws of limited liability. He felt, as all the pioneers of the American joint stock company did too, that his private accumulation came with a public obligation, which he fulfilled by paying his people well.

Low paid jobs remain prevalent in the UK, and a fifth of the workforces is on low pay. This costs us all dear as the state subsidises low income working households through the tax credit system. 

For those employers not persuaded by the moral case for change Collins argues the rate of the minimum wage should be ratcheted up as a backstop, a view that is starting to gain more support. This undoubtedly has to be part of the solution, but alone will not solve the problem. Instead a more comprehensive strategy is required that looks at why we have such an endemic low pay problem in the UK; what is driving up the cost of essential like housing, childcare and energy; and yes, as unpopular as it is right now, how best to support people through the social security and tax systems.

Katie Schmuecker is a Policy and Research Manager at the Joseph Rowntree Foundation (JRF) 

Joseph Rowntree. Photograph: Getty Images
Photo: Getty Images
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I'll vote against bombing Isis - but my conscience is far from clear

Chi Onwurah lays out why she'll be voting against British airstrikes in Syria.

I have spent much of the weekend considering how I will vote on the question of whether the UK should extend airstrikes against Daesh/Isis from Iraq to Syria, seeking out and weighing the evidence and the risks.

My constituents have written, emailed, tweeted, facebooked or stopped me in the street to share their thoughts. Most recognised what a difficult and complex decision it is. When I was selected to be the Labour candidate for Newcastle Central I was asked what I thought would be the hardest part of being an MP.

I said it would be this.

I am not a pacifist, I believe our country is worth defending and our values worth fighting for. But the decision to send British Armed Forces into action is, rightly, a heavy responsibility.

For me it comes down to two key questions. The security of British citizens, and the avoidance of civilian casualties. These are separate operational and moral questions but they are linked in that it is civilian casualties which help fuel the Daesh ideology that we cannot respect and value the lives of those who do not believe as we do. There is also the important question of solidarity with the French in the wake of their grievous and devastating loss; I shall come to that later.

I listened very carefully to the Prime Minister as he set out the case for airstrikes on Thursday and I share his view that Daesh represents a real threat to UK citizens. However he did not convince me that UK airstrikes at this time would materially reduce that threat. The Prime Minister was clear that Daesh cannot be defeated from the air. The situation in Syria is complex and factionalised, with many state and non-state actors who may be enemies of our enemy and yet not our friend. The Prime Minister claimed there were 70,000 ground troops in the moderate Free Syrian Army but many experts dispute that number and the evidence does not convince me that they are in a position to lead an effective ground campaign. Bombs alone will not prevent Daesh obtaining money, arms and more recruits or launching attacks on the UK. The Prime Minister did not set out how we would do that, his was not a plan for security and peace in Syria with airstrikes a necessary support to it, but a plan to bomb Syria, with peace and security cited in support of it. That is not good enough for me.

Daesh are using civilian population as human shields. Syrians in exile speak of the impossibility of targeting the terrorists without hitting innocent bystanders. I fear that bombing Raqqa to eliminate Daesh may be like bombing Gaza to eliminate Hamas – hugely costly in terms of the civilian population and ultimately ineffectual.

Yet the evil that Daesh perpetrate demands a response. President Hollande has called on us to join with French forces. I lived in Paris for three years, I spent time in just about every location that was attacked two weeks ago, I have many friends living in Paris now, I believe the French are our friends and allies and we should stand and act in solidarity with them, and all those who have suffered in Mali, Kenya, Nigeria, Lebanon, Tunisia and around the world.

But there are other ways to act as well as airstrikes. Britain is the only G7 country to meet its international development commitments, we are already one of the biggest humanitarian contributors to stemming the Syrian crisis, we can do more not only in terms of supporting refugees but helping those still in Syria, whether living in fear of Daesh or Assad. We can show the world that our response is to build rather than bomb. The Prime Minister argues that without taking part in the bombing we will not have a place at the table for the reconstruction. I would think our allies would be reluctant to overlook our financial commitment.

We can also do more to cut off Daesh funding, targeting their oil wells, their revenues, their customers and their suppliers. This may not be as immediately satisfying as bombing the terrorists but it is a more effective means of strangling them.

The vast majority of the constituents who contacted me were against airstrikes. I agree with them for the reasons I set out above. I should say that I have had no experience of bullying or attempts at intimidation in reaching this decision, Newcastle Central is too friendly, frank, comradely and Geordie a constituency for that. But some have suggested that I should vote against airstrikes to ensure a “clear conscience” ’. This is not the case. There will be more killings and innocent deaths whether there are UK airstrikes or not, and we will all bear a portion of responsibility for them.

A version of this article was originally sent to Chi Onwurah's constituents, and can be read here