National Gallery staff protest at "poverty pay" for shift workers at a new exhibition of Van Gogh's 'Sunflowers'. Photograph: Getty Images.
Show Hide image

The UK needs better jobs not just more jobs

There are more working than non-working households in poverty for the first time ever. But don't assume a living wage will solve all problems.

It is often assumed that a rising tide will lift all boats and, as the economy grows, some of the benefits will trickle down, hopefully reducing poverty as they go. But JRF research shows that if the recovery is not rich in jobs, the impact on poverty will be muted. And as the CIPID this week warned, ahead of the monthly unemployment figures, jobs growth could yet slow. In addition, not only does the UK need more jobs, it needs better jobs too.

The face of poverty in the UK is changing and in-work poverty has increased over recent decades. The latest data shows – for the first time – that more than half the 13 million people experiencing poverty in the UK live in households where at least one person is working. This is an inconvenient truth for politicians fond of saying work is the best route out of poverty.

Discussion of "better jobs" often quickly turns to the topic of the living wage. That this debate is gathering momentum is welcome, as higher pay is an important part of the fight against poverty. Industries with large numbers of low paid jobs such as retail, hospitality, personal services and care have higher rates of poverty among their workers compared to other industries.

But the relationship between low pay and poverty is not straightforward, not least because poverty is measured according to household income, meaning who you live with - and their circumstances - influences your likelihood of being in poverty. Analysis by the New Policy Institute shows that over half (56 per cent) of adults in working poverty live in households where at least one person is paid below the Living Wage. But that means nearly half do not, so higher pay provides half an answer to in-work poverty.

As well as higher pay, a better job means sufficient hours, security and the opportunity to progress. Part-time work is prevalent among families in working poverty, indicating that more good quality part-time work – especially for those with caring responsibilities – is important too. But the UK has a large number of low-paid and low-skilled jobs compared to other developed countries. Surveys find these workers are more likely to face insecure or temporary contracts and less likely to receive training from their employer, hampering their chances of progressing to a different job.

What is more, many businesses offering low pay and poor terms and conditions are able to survive using a low cost, low quality approach to their business. They have no difficulty hiring people into jobs that require little by way of formal skills and training. However, there are examples of individual businesses in low pay sectors constructing a business case for "better jobs". The precise argument varies, but examples include better pay and progression to reduce the cost of labour turnover and sickness absence; to improve service quality; and to ensure a "pipeline of talent" to support organisational growth.

But such business cases need to be backed by capable managers, an organisational culture that promotes progression and worker engagement. They also need a coalition of champions within the organisation – from senior managers to union representatives and individual staff members – to maintain momentum. Otherwise policies that look good on paper can fail to deliver in reality.

The challenge is how to spread better business practice and drive up employer demand for skilled workers in order to grow the economy and tackle poverty. The government’s City Deal process, whereby powers and responsibilities linked to economic growth and skills and are devolved to major cities, offer an opportunity for more experimentation in this area.

Nonetheless, the IFS projects that poverty will increase by 2020, largely as a result of cuts to benefits for both working and non-working low income families, but made worse by anticipated changes to the labour market. The coalition’s primary answer is to reform welfare to make sure it always pays to work more. This is a worthy goal, but welfare reform alone will not address poverty unless the quality of jobs at the bottom end of the labour market is also addressed.

Katie Schmuecker is Policy and Research Manager at the Joseph Rowntree Foundation

Getty
Show Hide image

Inside the progressive alliance that beat Zac Goldsmith in Richmond

Frantic phone calls, hundreds of volunteers, and Labour MPs constrained by their party. 

Politics for a progressive has been gloomy for a long time. On Thursday, in Richmond Park of all places, there was a ray of light. Progressive parties (at least some of them) and ordinary voters combined to beat Ukip, the Tories and their "hard Brexit, soft racist" candidate.

It didn’t happen by accident. Let's be clear, the Liberal Democrats do by-elections really well. Their activists flood in, and good luck to them. But Richmond Park was too big a mountain for even their focused efforts. No, the narrow win was also down to the fast growing idea of a progressive alliance. 

The progressive alliance is both a defensive and offensive move. It recognises the tactical weakness of progressives under first past the post – a system the Tories and their press know how to game. With progressive forces spilt between Labour, Liberal Democrats, Greens, the SNP, Plaid Cymru, the Women’s Equality Party and more – there is no choice but to co-operate, bring in proportional representation and then a whole new political world begins.

This move opens up the wider strategy – to end the domination of the City, and right-wing newspapers like the Mail, so Britain can have a real debate and make real choices about what sort of economy and society it wants. A pipedream? Well, maybe. But last night the fuse was lit in Richmond Park. The progressive alliance can work.

Months before the by-election, the pressure group for a progressive alliance that I chair, Compass, the Greens, and some Labour, Liberal Democrat and SNP MPs and activists, began considering this. The alternative after Brexit was staring into the void.

Then the Tory MP Zac Goldsmith stepped down over Heathrow. To be fair, he had pledged to do this, and we should have been better prepared. In the event, urgent behind-the-scenes calls were made between the Greens and the Liberal Democrats. Compass acted as the safe house. The Greens, wonderfully, clung onto democracy – the local party had to decide. And they decided to stand up for a new politics. Andree Frieze would have been the Green candidate, and enjoyed her moment in the autumn sun. She and her party turned it down for a greater good. So did the Women’s Equality Party.

Meanwhile, what about Labour? Last time, they came a distant third. Again the phones were hit and meetings held. There was growing support not to stand. But what would they get back from the Liberal Democrats, and what did the rules say about not standing? It was getting close to the wire. I spent an hour after midnight, in the freezing cold of Aberdeen, on the phone to a sympathetic Labour MP trying to work out what the party rule book said before the selection meeting.

At the meeting, I am told, a move was made from the floor not to select. The London regional official ruled it out of order and said a candidate would be imposed if they didn’t select. Some members walked out at this point. Where was the new kinder, gentler politics? Where was membership democracy? Fast forward to last night, and the Labour candidate got less votes than the party has members.

The idea of a progressive alliance in Richmond was then cemented in a draughty church hall on the first Tuesday of the campaign – the Unitarian Church of course. Within 48 hours notice, 200 local activist of all parties and none had come together to hear the case for a progressive alliance. Both the Greens and Compass produced literature to make the case for voting for the best-placed progressive candidate. The Liberal Democrats wove their by-election magic. And together we won.

It’s a small victory – but it shows what is possible. Labour is going to have to think very hard whether it wants to stay outside of this, when so many MPs and members see it as common sense. The lurch to the right has to be stopped – a progressive alliance, in which Labour is the biggest tent in the campsite, is the only hope.

In the New Year, the Progressive Alliance will be officially launched with a steering committee, website and activists tool-kit. There will also be a trained by-election hit squad, manifestos of ideas and alliances build locally and across civil society.

There are lots of problems that lie ahead - Labour tribalism, the 52 per cent versus the 48 per cent, Scottish independence and the rest. But there were lots of problems in Richmond Park, and we overcame them. And you know, working together felt good – it felt like the future. The Tories, Ukip and Arron Banks want a different future – a regressive alliance. We have to do better than them. On Thursday, we showed we could.

Could the progressive alliance be the start of the new politics we have all hoped for?

Neal Lawson is the Chair of Compass, the pressure group for the progressive alliance.

Neal Lawson is chair of the pressure group Compass, which brings together progressives from all parties and none. His views on internal Labour matters are personal ones.