Only Labour can be trusted to strengthen the minimum wage

Despite ministers promising to name and shame firms which aren’t paying the legal minimum, not a single firm has been named so far.

Can you imagine earning £1.75 an hour for a hard day’s work?  How is a person expected to live on such a sum? And that the employer who paid that sum was doing it legally. This is not a rhetorical question to shock, but was evidence taken from a woman, who had worked as a home worker for over a decade, by the Low Pay Commission in the late 1990s when considering the level of the minimum wage.

Fifteen years have now passed since the introduction of the National Minimum Wage and cases such as these are now thankfully illegal. It is undoubtedly one of Labour’s proudest achievements in government and it is undeniable that it has been a huge success for employees and employers.

The contribution of those Labour MPs who sat late into the night to ensure this crucial legislation passed should not be underestimated. Whilst Tory naysayers bitterly opposed the minimum wage, Labour persevered to ensure that it became a political and economic fact of life. Many of those who opposed it back in the 1990s are now in ministerial posts, like then Tory backbencher Michael Fallon, now Business minister, whose scaremongering claim in 1997 was that the minimum wage "will add costs to British business". The Tories argued that increasing wages at the bottom would cost more than a million jobs. It did nothing of the sort.

It gave more than one million workers an average pay rise of 10-15% and now nearly two million workers directly benefit from the minimum wage, around one worker in ten. For women in particular, a group in the UK workforce often most susceptible to low pay, the national minimum wage made a significant impact. And over the years, studies have repeatedly shown that the minimum wage has had no adverse impact on aggregate employment, individual employment or unemployment probabilities.

Now the Tories pretend they love the minimum wage, all in an attempt to once again detoxify the conservative "brand". But the problem of low pay has got worse under this government. Families are on average £1,600 a year worse off since David Cameron took office in 2010 and the value of the minimum wage has declined by 5% under his watch, contributing to the cost-of-living crisis that has engulfed the country. But this government have failed to notice, let alone take the action we need.

The Tory-led government is not doing enough to enforce the minimum wage. Despite ministers promising to name and shame firms which aren’t paying, not a single firm has been named so far. Incredibly, this government have made more announcements on naming and shaming firms that flout the minimum wage than actually naming them. Since 2010, three separate ministers have repeated three announcements on the policy.

Today, we have yet another re-announcement, that fines on businesses that don’t pay the minimum wage will rise to £20,000, a repeat of remarks made by David Cameron in November last year. Whilst it’s a small step in the right direction, following Labour’s lead, and in response to the opposition day debate we have called this week, we need the government to back up its empty rhetoric on enforcement with real action. A recent report by the Centre for London found that only two employers in four years have been prosecuted for paying below the minimum wage, despite evidence that over 300,000 people in the UK are earning less than the legal minimum.

And the Lib Dems are no better. At every turn since 2010, they have supported measures making it easier to fire not hire people at work. Vince Cable didn’t vote for the National Minimum Wage and later admitted that he’d had "reservations". In 2003, he warned that raising the minimum wage would set a "dangerous precedent".

The next Labour government will strengthen the minimum wage. In September last year, Ed Miliband announced a review into low pay, led by Alan Buckle, formerly Deputy Chairman of KPMG International, to examine how to restore the value of the minimum wage and promote the living wage.

And in November, Ed Miliband outlined how a future Labour government will provide tax incentives for employers that sign up to become living wage employers in the first year of the next Parliament through new "Make Work Pay" contracts. We also need to see higher penalties for rogue companies who don’t pay employees the minimum wage and far more effective enforcement, including by giving local authorities new powers. Penalties against those rogue employers should be higher and we would set them at £50,000 – a real deterrent to the minority of businesses that exploit workers and undermine firms that do the right thing.

These measures will enable us to earn our way out of the cost-of-living crisis. But this is also about more than pay. The way to get the social security bill down dramatically is to get people into work with proper wages.

It is no surprise that in 2010, the National Minimum Wage topped a poll of political studies academics to find the best policy of the last 30 years. Labour created it and Labour will strengthen it for all of the low-paid people around our country, working together with representatives of both employers and employees to find a consensus and moving together towards the shared goal of making work pay. And it is Labour that will take proper sanctions against those that do not pay it.

Ed Miliband speaks to an audience on living standards at Battersea Power station on November 5, 2013. Photograph: Getty Images.

Ian Murray is shadow minister for employment relations, consumer and postal affairs, and Labour MP for Edinburgh South

 

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Labour's establishment suspects a Momentum conspiracy - they're right

Bernie Sanders-style organisers are determined to rewire the party's machine.  

If you wanted to understand the basic dynamics of this year’s Labour leadership contest, Brighton and Hove District Labour Party is a good microcosm. On Saturday 9 July, a day before Angela Eagle was to announce her leadership bid, hundreds of members flooded into its AGM. Despite the room having a capacity of over 250, the meeting had to be held in three batches, with members forming an orderly queue. The result of the massive turnout was clear in political terms – pro-Corbyn candidates won every position on the local executive committee. 

Many in the room hailed the turnout and the result. But others claimed that some in the crowd had engaged in abuse and harassment.The national party decided that, rather than first investigate individuals, it would suspend Brighton and Hove. Add this to the national ban on local meetings and events during the leadership election, and it is easy to see why Labour seems to have an uneasy relationship with mass politics. To put it a less neutral way, the party machine is in a state of open warfare against Corbyn and his supporters.

Brighton and Hove illustrates how local activists have continued to organise – in an even more innovative and effective way than before. On Thursday 21 July, the week following the CLP’s suspension, the local Momentum group organised a mass meeting. More than 200 people showed up, with the mood defiant and pumped up.  Rather than listen to speeches, the room then became a road test for a new "campaign meetup", a more modestly titled version of the "barnstorms" used by the Bernie Sanders campaign. Activists broke up into small groups to discuss the strategy of the campaign and then even smaller groups to organise action on a very local level. By the end of the night, 20 phonebanking sessions had been planned at a branch level over the following week. 

In the past, organising inside the Labour Party was seen as a slightly cloak and dagger affair. When the Labour Party bureaucracy expelled leftwing activists in past decades, many on went further underground, organising in semi-secrecy. Now, Momentum is doing the exact opposite. 

The emphasis of the Corbyn campaign is on making its strategy, volunteer hubs and events listings as open and accessible as possible. Interactive maps will allow local activists to advertise hundreds of events, and then contact people in their area. When they gather to phonebank in they will be using a custom-built web app which will enable tens of thousands of callers to ring hundreds of thousands of numbers, from wherever they are.

As Momentum has learned to its cost, there is a trade-off between a campaign’s openness and its ability to stage manage events. But in the new politics of the Labour party, in which both the numbers of interested people and the capacity to connect with them directly are increasing exponentially, there is simply no contest. In order to win the next general election, Labour will have to master these tactics on a much bigger scale. The leadership election is the road test. 

Even many moderates seem to accept that the days of simply triangulating towards the centre and getting cozy with the Murdoch press are over. Labour needs to reach people and communities directly with an ambitious digital strategy and an army of self-organising activists. It is this kind of mass politics that delivered a "no" vote in Greece’s referendum on the terms of the Eurozone bailout last summer – defying pretty much the whole of the media, business and political establishment. 

The problem for Corbyn's challenger, Owen Smith, is that many of his backers have an open problem with this type of mass politics. Rather than investigate allegations of abuse, they have supported the suspension of CLPs. Rather than seeing the heightened emotions that come with mass mobilisations as side-effects which needs to be controlled, they have sought to joins unconnected acts of harassment, in order to smear Jeremy Corbyn. The MP Ben Bradshaw has even seemed to accuse Momentum of organising a conspiracy to physically attack Labour MPs.

The real conspiracy is much bigger than that. Hundreds of thousands of people are arriving, enthusiastic and determined, into the Labour party. These people, and their ability to convince the communities of which they are a part, threaten Britain’s political equilibrium, both the Conservatives and the Labour establishment. When the greatest hope for Labour becomes your greatest nightmare, you have good call to feel alarmed.