Miliband offers answers on living standards, but the Tories just want to change the subject

On the politically defining issue of low pay, the Labour leader has the pitch all to himself.

At last week's PMQs, David Cameron branded Ed Miliband a "one trick pony", suggesting that the Labour leader had nothing to offer beyond a pledge to freeze energy prices (although as Cameron tacitly acknowledged, that "trick" is a potent one). But that's not a line he'll be able to repeat this week. In the next stage of Labour's cost of living offensive, Miliband has turned his attention from rising prices to falling wages. To coincide with Living Wage Week, he will make a speech on the subject tomorrow (as The Staggers revealed last week), providing further details of his plan to offer one-year tax rebates of up to £1,000 per worker to firms that pay employees the higher rate.

The cost of the policy will be met through the increased tax revenues and lower benefit payments that result from companies paying the living wage. For every £1 that employers pay to raise salaries to living wage-level, the Treasury saves 49p. The chunk of this accounted for by higher tax revenues (32p) will be paid back to firms that sign up to Labour's Make Work Pay contracts (a deft appropriation of one of the Tories' favourite slogans), while the Exchequer banks the remainder (another chance for Labour to demonstrate its commitment to fiscal responsibility). 

All three party leaders have praised the living wage (David Cameron described it as "an idea whose time has come" in a speech to Citizens UK in May 2010), but Miliband is the first to make a concrete offer. In response, the Tories have dismissed the plan as one that would require higher borrowing or tax rises, based on a line used by Ed Balls (not a source they're usually keen to cite) during the Labour leadership election. Balls said of Miliband's living wage proposal in 2010: "It seems to me that there would be a substantial extra cost either to the exchequer or to business".

In reference to these comments, Grant Shapps declared: "Even Labour’s own Shadow Chancellor Ed Balls says Ed Miliband’s latest unworkable policy would have a substantial extra cost to the Exchequer. Labour got us into a mess with too much borrowing and too much debt. And now they're calling for yet more borrowing and more debt.

"That would mean higher taxes and higher mortgage rates for hardworking people, hitting their living standards. It would make working Britain worse off, not better off – it’s the same old Labour."

But even were that the case (and it's important to note that Miliband's original plan, based on corporation tax breaks, differed from Labour's), it's not a line of attack that will do much to aid the Tories. Few voters, after all, are going to disagree with the idea of higher wages (a poll earlier this year found that 60% support a universal living wage even if it costs jobs). To the Tories' rhetorical assault, their response will be, but what would you do? 

Before the Conservatives' conference last month, there were rumours that they would promise a significant increase in the minimum wage as a means of shedding their image as "the party of the rich", but no announcement, or even a hint of future action, followed. After Labour's success in shifting the debate towards living standards, the party still gives every impression of wanting to change the subject. Cameron and other Tories regularly berate Miliband and Balls for "not wanting to talk about the economy", boasting that the UK is now forecast to grow faster than any other major western nation. But they would do well to remember that to most voters, living standards are the economy. Rising GDP and falling government borrowing mean little to them if they do not no share in the gains. The Tories remain confident that higher growth will translate into higher wages and that Labour's warnings of a "cost of living crisis" will soon appear as misplaced as past warnings of a triple-dip recession and unemployment of three million.

But rather than merely relying on the economy to deliver the goods (as it may fail to do in an era when growth has become decoupled from living standards), the Tories need to demonstrate that they have their own ideas to raise voters' incomes. Right now, on the defining issue of low pay, Miliband has the pitch all to himself. 

Ed Miliband speaks at the Labour conference in Brighton last month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.