George Osborne looks on as David Cameron delivers a speech to business leaders in Manchester. Photograph: Getty Images.
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Osborne falls far short of £7 minimum wage target

The proposed figure of £6.70 fails to meet the Chancellor's aim of restoring the minimum wage to its pre-recession value. 

In a characteristically calculated intervention last year, George Osborne sought to compensate for the Tories' past opposition to the minimum wage by declaring that he hoped the main rate would rise to £7 by 2015-16. "If, for example, the minimum wage had kept pace with inflation it would be £7 by 2015-16, £6.31 at the moment, so that is an increase," he said, with an eye to his party's blue collar wing. "I think we can see an above inflation increase in the minimum wage and do it in a way that actually supports our economy precisely because the economy is recovering and many, many jobs are being created." The Treasury published an accompanying analysis modelling the impact of an increase to £7, lending further weight to the figure (which at the time would have restored the minimum wage to its pre-recession value). 

But it is now clear that Osborne was raising false hopes. The Low Pay Commission, the body that advises the government on the minimum wage, has today published its recommendations for 2015-16 - and they do not include an increase to £7. Instead, the LPC has called for a smaller rise to £6.70 (up from £6.50). The government is not obliged to accept its proposals but Vince Cable, who is formally responsible for this area as Business Secretary, has signalled that ministers will almost certainly not oppose the figure. He said: "I will now study these recommendations and consult my Cabinet colleagues with a view to announcing the final rates in the next few weeks. The Low Pay Commission strike a delicate balance between what is fair for workers and what is affordable for employers, without costing jobs. It does so impartially and without political interference. No government has ever rejected the main rates since it was established fifteen years ago. It is important that it is able to continue to do its work ten weeks before a general election."

Cable is known to have been angered when Osborne floated the figure of £7, believing that the LPC would never approve such a large rise. Indeed, Osborne pre-emptively retreated when the government failed to propose this rate in its final submission to the body. The Chancellor can point out that he maintained at the time that 'the exact figure has to be set by the Low Pay Commission'. But that does not alter the fact that he sought (and won) headlines on his support for a £7 rate. Through this careless act, he has handed Labour political ammunition with which to attack him and ensured that a 20p rise (3 per cent above inflation) will now disappoint expectations. 

Although inflation has fallen significantly, a rate of £6.77 would still fail to restore the minimum wage to its peak value. As the Resolution Foundation noted: "The minimum wage is set to rise by 3 per cent in October 2015, roughly the same percentage by which it rose in October 2014. Last year, the Low Pay Commission described its decision to recommend a 3 per cent increase last year – rising from £6.31 to £6.50 – as reflecting “a new phase” for the minimum wage, following a period in which it had suffered repeated falls relative to inflation. But that lost ground has yet to be fully made up. The Resolution Foundation estimates that an increase of 4.2 per cent to £6.77 would have been necessary to take the minimum wage back to its highest ever value in real-terms, which it held in 2008-09."

To be on track to meet Labour's promise of an £8 minimum wage by the end of the next parliament, the rate would need to rise to £6.78. That means the opposition faces some tough questions of its own: would it have become the first government to overrule the LPC? 

George Eaton is political editor of the New Statesman.

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No, the battle in Momentum isn't about young against old

Jon Lansman and his allies' narrative doesn't add up, argues Rida Vaquas.

If you examined the recent coverage around Momentum, you’d be forgiven for thinking that it was headed towards an acrimonious split, judging by the vitriol, paranoia and lurid accusations that have appeared online in the last couple days. You’d also be forgiven for thinking that this divide was between a Trotskyist old guard who can’t countenance new ways of working, and hip youngsters who are filled with idealism and better at memes. You might then be incredibly bemused as to how the Trotskyists Momentum was keen to deny existed over the summer have suddenly come to the brink of launching a ‘takeover bid’.

However these accounts, whatever intentions or frustrations that they are driven by, largely misrepresent the dispute within Momentum and what transpired at the now infamous National Committee meeting last Saturday.

In the first instance, ‘young people’ are by no means universally on the side of e-democracy as embodied by the MxV online platform, nor did all young people at the National Committee vote for Jon Lansman’s proposal which would make this platform the essential method of deciding Momentum policy.

Being on National Committee as the representative from Red Labour, I spoke in favour of a conference with delegates from local groups, believing this is the best way to ensure local groups are at the forefront of what we do as an organisation.

I was nineteen years old then. Unfortunately speaking and voting in favour of a delegates based conference has morphed me into a Trotskyist sectarian from the 1970s, aging me by over thirty years.

Moreover I was by no means the only young person in favour of this, Josie Runswick (LGBT+ representative) and the Scottish delegates Martyn Cook and Lauren Gilmour are all under thirty and all voted for a delegates based national conference. I say this to highlight that the caricature of an intergenerational war between the old and the new is precisely that: a caricature bearing little relation to a much more nuanced reality.

Furthermore, I believe that many people who voted for a delegates-based conference would be rather astounded to find themselves described as Trotskyists. I do not deny that there are Trotskyists on National Committee, nor do I deny that Trotskyists supported a delegates-based conference – that is an open position of theirs. What I do object is a characterisation of the 32 delegates who voted for a delegates-based conference as Trotskyists, or at best, gullible fools who’ve been taken in.  Many regional delegates were mandated by the people to whom they are accountable to support a national conference based on this democratic model, following broad and free political discussion within their regions. As thrilling as it might be to fantasise about a sinister plot driven by the shadow emperors of the hard Left against all that it is sensible and moderate in Momentum, the truth is rather more mundane. Jon Lansman and his supporters failed to convince people in local groups of the merits of his e-democracy proposal, and as a result lost the vote.

I do not think that Momentum is doomed to fail on account of the particular details of our internal structures, providing that there is democracy, accountability and grassroots participation embedded into it. I do not think Momentum is doomed to fail the moment Jon Lansman, however much respect I have for him, loses a vote. I do not even think Momentum is doomed to fail if Trotskyists are involved, or even win sometimes, if they make their case openly and convince others of their ideas in the structures available.

The existential threat that Momentum faces is none of these things, it is the propagation of a toxic and polarised political culture based on cliques and personal loyalties as opposed to genuine political discussion on how we can transform labour movement and transform society. It is a political culture in which those opposed to you in the organisation are treated as alien invaders hell-bent on destroying it, even when we’ve worked together to build it up, and we worked together before the Corbyn moment even happened. It is a political culture where members drag others through the mud, using the rhetoric of the Right that’s been used to attack all of us, on social and national media and lend their tacit support to witch hunts that saw thousands of Labour members and supporters barred from voting in the summer. It is ultimately a political culture in which our trust in each other and capacity to work together on is irreparably eroded.

We have a tremendous task facing us: to fight for a socialist alternative in a global context where far right populism is rapidly accruing victories; to fight for the Labour Party to win governmental power; to fight for a world in which working class people have the power to collectively change their lives and change the societies we live in. In short: there is an urgent need to get our act together. This will not be accomplished by sniping about ‘saboteurs’ but by debating the kind of politics we want clearly and openly, and then coming together to campaign from a grassroots level upwards.

Rida Vaquas is Red Labour Representative on Momentum National Committee.