Labour members present the party's "cost-of-living contract" during a campaign rally on May 21, 2014 in London. Photograph: Getty Images.
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Labour should pledge to make the government a living wage employer

Even at a time of austerity, it is a small price for a big gain. 

The government claims to be a proponent of the living wage. David Cameron says he supported it at the last election and believes it is an idea "whose time has come". Earlier this year he told the World Economic Forum in Davos that "where companies can pay the living wage, they should". Yet for all the warm words, government departments continue to drag their feet over becoming accredited living wage employers.

Rather than leading the way, ministers still insist that a living wage is a cost we perhaps can’t afford. As Lord Deighton, the Commercial Secretary to the Treasury, told Parliament in 2013: "requiring employers to pay a living wage could be burdensome to business and damage the employment prospects of low-paid workers". When confronted with the argument that it may be a price worth paying, Downing Street retorts that, anyway, living wage clauses in public procurement breach EU law (a view strong disputed by the European Commission, as well as by Boris Johnson).

If the GLA and a long list of local authorities, universities and charities can pay the living wage, why not Whitehall? Indeed, our study on "setting a fair pay standard: the government as a living wage employer" (here) shows that the cost of paying all low-paid Whitehall workers the living wage would be only £18m – equivalent to 0.002 per cent of total public spending. This would include all in-house employees as well as cleaners, security, catering staff etc who are contracted in. The cost would still be only around £23m even if contractors didn’t absorb any of the costs involved in taking pay rates up to the London living wage level (£8.80).  

Alan Buckle’s recently published report on low pay for the Labour Party recommends that central government departments should become accredited living wage employers and use the power of procurement to encourage organisations bidding for contracts to pay their staff a living wage. This would ensure that all sub-contractors pay the living wage to any staff working on government contracts. Our analysis suggests that this would cover nearly 200,000 people, and approximately 30,000 people would see their pay increase as a result. Many of those low-paid workers who would benefit are currently working for the DWP, which is committed on paper at least to paying the living wage.

There’s a lot of complex number crunching involved in evaluating the cost to government of paying the living wage. Some workers are paid close to the living wage which means the uplift costs are low, others are on the National Minimum Wage and could see their wages rising significantly; there are issues around how much different contractors in different services can afford to contribute, and how phasing might operate; how best to factor in know-on employment effects and productivity gains; and what impact will pay rises at the bottom have on wage differentials? All are important considerations, but not impossible for government to work out. What is most striking is that the overall costs to the taxpayer are low because government gets a dividend back from tax receipts and reduced benefit payments. According to our analysis, the tax and benefit savings of moving 30,000 workers onto the living wage would be some £20m. That’s roughly half the total cost of becoming a living wage employer.

Ed Miliband has flirted with several ideas over how to support the living wage, including council-backed living wage zones and tax breaks to private firms. Each have their merits and demerits. But surely it is best to start with the public sector. Government, after all, is a major employer of low-paid workers and has huge buying power. Ministers can set the pace on the living wage and force and cajole the business community to follow.

In Scotland, Holyrood recently voted down an amendment to the Procurement Reform Bill by Labour to introduce a "Scottish Living Wage duty" - which would make it compulsory for companies who wanted to win work from the public sector to pay the living wage. This was something of an embarrassment for the SNP, which boasts that the Scottish government is an accredited living wage employer.

Labour should be bolder on the living wage than Salmond or Cameron and give a clear and unequivocal commitment over the term of a parliament to making not just Whitehall, but all public bodies living wage employers. The opportunity is there to outflank the Tories, whose credibility on tackling low pay and endorsement of the living wage needs to be challenged. There is a cost and the big contractors will fight against paying their share, but as our report shows, even at a time of fiscal austerity, it is a small price for a big gain. 

Paul Hackett is the director of The Smith Institute.

Photo: Getty
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How the row over Jackie Walker triggered a full-blown war in Momentum

Jon Lansman, the organisation's founder, is coming under attack. 

The battle for control within Momentum, which has been brewing for some time, has begun in earnest.

In a sign of the growing unrest within the organisation – established as the continuation of Jeremy Corbyn’s first successful leadership bid, and instrumental in delivering in his re-election -  a critical pamphlet by the Alliance for Workers’ Liberty (AWL), a Trotskyite grouping, has made its way into the pages of the Times, with the “unelected” chiefs of Momentum slated for turning the organisation into a “bland blur”.

The issue of contention: between those who see Momentum as an organisation to engage new members of the Labour party, who have been motivated by Jeremy Corbyn but are not yet Corbynites.

One trade unionist from that tendency described what they see the problem as like this: “you have people who have joined to vote for Jeremy, they’re going to meetings, but they’re voting for the Progress candidates in selections, they’re voting for Eddie Izzard [who stood as an independent but Corbynsceptic candidate] in the NEC”.  

On the other are those who see a fightback by Labour’s right and centre as inevitable, and who are trying to actively create a party within a party for what they see as an inevitable purge. One activist of that opinion wryly described Momentum as “Noah’s Ark”.

For both sides, Momentum, now financially stable thanks to its membership, which now stands at over 20,000, is a great prize. And in the firing line for those who want to turn Momentum into a parallel line is Jon Lansman, the organisation’s founder.

Lansman, who came into politics as an aide to Tony Benn, is a figure of suspicion on parts of the broad left due to his decades-long commitment to the Labour party. His major opposition within Momentum and on its ruling executive comes from the AWL.

The removal of Jackie Walker as a vice-chair of Momentum after she said that Holocaust Memorial Day belittled victims of other genocides has boosted the AWL, although the AWL's Jill Mountford, who sits on Momentum's ruling executive, voted to remove Walker as vice-chair. (Walker remains on the NEC, as she has been elected by members). But despite that, the AWL, who have been critical of the process whereby Walker lost her post, have felt the benefit across the country.

Why? Because that battle has triggered a series of serious splits, not only in Momentum’s executive but its grassroots. A raft of local groups have thrown out the local leadership, mostly veterans of Corbyn’s campaign for the leadership, for what the friend of one defeated representative described as “people who believe the Canary [a pro-Corbyn politics website that is regularly accused of indulging and promoting conspiracy theories]”.

In a further series of reverses for the Lansmanite caucus, the North West, a Momentum stronghold since the organisation was founded just under a year ago, is slipping away from old allies of Lansman and towards the “new” left. As one insider put it, the transition is from longstanding members towards people who had been kicked out in the late 1980s and early 1990s by Neil Kinnock. The constituency party of Wallasey in particular is giving senior figures in Momentum headaches just as it is their opponents on the right of the party, with one lamenting that they have “lost control” of the group.

It now means that planned changes to Momentum’s structure, which the leadership had hoped to be rubberstamped by members, now face a fraught path to passage.

Adding to the organisation’s difficulties is the expected capture of James Schneider by the leader’s office. Schneider, who appears widely on television and radio as the public face of Momentum and is well-liked by journalists, has an offer on the table to join Jeremy Corbyn’s team at Westminster as a junior to Seumas Milne.

The move, while a coup for Corbyn, is one that Momentum – and some of Corbyn’s allies in the trade union movement – are keen to resist. Taking a job in the leader’s office would reduce still further the numbers of TV-friendly loyalists who can go on the airwaves and defend the leadership. There is frustration among the leader’s office that as well as Diane Abbott and John McDonnell, who are both considered to be both polished media performers and loyalists, TV bookers turn to Ken Livingstone, who is retired and unreliable, and Paul Mason, about whom opinions are divided within Momentum. Some regard Mason as a box office performer who needs a bigger role, others as a liability.

But all are agreed that Schneider’s expected departure will weaken the media presence of Corbyn loyalists and also damage Momentum. Schneider has spent much of his time not wrangling journalists but mediating in local branches and is regarded as instrumental in the places “where Momentum is working well” in the words of one trade unionist. (Cornwall is regarded as a particular example of what the organisation should be aiming towards)

It comes at a time when Momentum’s leadership is keen to focus both on its external campaigns but the struggle for control in the Labour party. Although Corbyn has never been stronger within the party, no Corbynite candidate has yet prevailed in a by-election, with the lack of available candidates at a council level regarded as part of the problem. Councilors face mandatory reselection as a matter of course, and the hope is that a bumper crop of pro-Corbyn local politicians will go on to form the bulk of the talent pool for vacant seats in future by-elections and in marginal seats at the general election.

But at present, a draining internal battle is sapping Momentum of much of its vitality. But Lansman retains two trump cards. The first is that as well as being the founder of the organisation, he is its de facto owner: the data from Jeremy Corbyn’s leadership campaigns, without which much of the organisation could not properly run, is owned by a limited company of which he is sole director. But “rolling it up and starting again” is very much the nuclear option, that would further delay the left’s hopes of consolidating its power base in the party.

The second trump card, however, is the tribalism of many of the key players at a local level, who will resist infiltration by groups to Labour’s left just as fiercely as many on the right. As one veteran of both Corbyn’s campaigns reflected: “If those who have spent 20 years attacking our party think they have waiting allies in the left of Labour, they are woefully mistaken”. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.