Sunday, May 17, 2009


The apex of Nu Labour’s politics of triangulation is its attitude to work and welfare. While unemployment soars and the incomes of the low-paid plummet and the people and the systems responsible for the crisis go unpunished while their staff are made redundant … still people like James Purnell claim that people should get off benefits and into work.

Labour have hectored the poor as Norman Tebbit used to, but they have glorified their tickings off with the glossy jargon of “wellbeing,” “social inclusion” and “citizenship,” as though stacking shelves for Tesco’s on sub-survival wages is some kind of tonic for misery and infirmity. It is no exaggeration to say that getting people off benefits is priority number one for the Department of Health and its agenda of promoting “recovery” for people with long-term mental health problems.


Reading Polly Toynbee’s Hard Work in 2009, six years after it was published, is salutary. Inflation aside, everything Toynbee writes about still stands, and then some. Early on in her book, before she swaps her comfortable Clapham home for a nearby Council flat and works as a porter, a dinner lady, a nursery support worker, a telesales operator and a care home worker, Toynbee reels out some statistics.

In 2002, the national median income was then £390 per week, and one in five people earned less than £240 per week. Unemployment was low then, but there were more people working multiple jobs and still not living life above the poverty line than people receiving benefits. These were boom times, but somehow, profits were available only to the very few. The majority fell further and further behind.

Of course this inequality had been growing since the late 1970s. In the last thirty years, executive salaries have grown exponentially, while those in low-paid jobs have vegetated. A regressive tax structure has redistributed wealth even further towards the rich. Child poverty has tripled since 1970, and the average Class 5 male worker won’t live long enough to qualify for a free TV licence.

So the proportion of the population living in poverty has increased while the UK economy overall has grown. The reasons for this are familiar to us, but it’s worth repeating them as they are still denied by the vast majority of people in mainstream politics.


Firstly, Margaret Thatcher’s decimation of Trade Unions means that workers have fewer rights and less bargaining power than ever. Atomisation has weakened workers dramatically. They have no bargaining power, no organising structure to support them, and often little sense of belonging. Jobs where a high proportion of workers belong to Unions generally have higher wages than non-organised workforces. But Unions need to do more than simply reform pay and conditions: they need to challenge labour’s absolute lack of presence in financial policy formulation, and take up the opportunity for change presented by the collapse of the global economy (for more on this, see here and here).

Secondly, the UK’s welfare provision errs towards the US, rather than the European social democratic, model. Its lack of social security means that more and more people are forced to look for work, and this mass search for employment helps to suppress wages. As Toynbee says, “America may be working, but the US has double Europe’s poverty rate.” Britain has the lowest social spending in Europe and the highest poverty; Sweden has the highest social spending in Europe and the lowest poverty.

What’s more, the old Tory trope that employment provides an opportunity to escape from the benefits trap and rebuild one’s life is contradicted by the old Tory (and New Labour) policies that mean it is often impossible to move from welfare to work. Once you get a job, you can no longer claim benefits – but a new starter will often have to work two or even four weeks before they receive their first pay check. If you are living on the breadline, how are you supposed to pay for bills and groceries without borrowing?

Thirdly, the salaries of people in low-paid jobs have been hit hard by the privatisation of “ancillary” (more on this word later) public services. When a private company takes on a cleaning contract for a hospital, they must reduce wages in order to generate a profit. When a private company takes over the running of hospital portering, residential care, or meals-on-wheels, the terms and conditions of existing workers are protected under the Transfer of Undertakings (Protection of Employment), or TUPE, regulations. But new workers receive no such protection. In 2002, Unison found that 62% of new starters were paid less than TUPE-protected workers; 73% had less holiday; 51% had worse pensions.


In the public sector, and in the low-paid sector generally, women have primarily been the victims of neoliberalism. It is really impossible to be a feminist if you do not oppose the capitalism of the last 30 years. The professions associated with women – the five Cs of cleaning, catering, caring, cashiering and clerical work – are among the lowest-paid and the hardest-hit by privatisation. They are the jobs known as ancillary (from the Latin word meaning ‘maid’ or ‘slave-girl’), which may explain how a stockbroker justifies paying a pittance to the woman who looks after his demented mother, or the women who works in his child’s classroom.

Aside from curbing salaries for the jobs that women do, the unwillingness of successive governments to provide state-funded childcare leads to what Polly Toynbee describes as “an impossible cycle of women’s low pay leading to women unable to work because they cannot afford childcare, and therefore a shortage of women to work in childcare because so many who would like to are trapped at home looking after their own.”

And of course, as a consequence of all this, the prejudice that women love doing caring work, that they would pay to do it given the chance, and that they shouldn’t expect much of a wage in return, is perpetuated.


There are many who think this is a God-given state of affairs. If I had space, I would re-produce the conversation Toynbee has with the chief executive of a care-home company verbatim – without the usual party-political sympathies blunting her analysis, her dissection of the free-market rhetoric used to sustain the repression of low wages is forensic.

Her chief executive claims that Local Authority staff are “feather-bedded.” He decries their “pensions, holidays, sick pay, overtime pay,” and saves money by withholding these from his own workforce. He pays his care staff £4.25 an hour (2002 rates). Most of them work a 48-hour week and cannot make ends meet, yet it is their work that feathers the beds of his shareholders. Care workers, Toynbee says, are simply not paid enough:

“We are not paying the market price.”

“But the market price [he replies] is whatever you can produce and sell something for.”

“No. It is a distorted market if it depends on sub-survivable wages. It is a below-market, fraudulent price, not the true price. The result is the government has to give out tax credits to subsidise low wages [...] Why should the tax-payer subsidise the services you and I purchase? [...] But above all, how do you and I justify earning large salaries while these hard-working people struggle?”

At which point, our chief executive bleats about freedom of opportunity and the debate descends into defensive platitudes which, when countered by statistics about stagnant social mobility, fail to stack up. And anyway, what does freedom of opportunity amount to when, for the last 15 years, executive pay has risen by more than 100% while frontline pay has risen by only a third?


Last week we learned that inequality has risen under Labour. Britain now has a more imbalanced economy than it ever did under Major, Thatcher, Heath or MacMillan. Those in the bottom 10% of earners have seen their incomes fall by £9 a week since 2005, while those in the top 10% have seen their incomes rise by £45 a week.

What is to be done? We must first admit that people are not poor because they are feckless, but because society has conspired to squeeze their wages until the pips squeak. Secondly, we must admit that the disparity between the wealthy and the poor is immoral and illogical, whether you believe in socialism or the free market. Thirdly, we must carry out a radical redistribution of wealth, whereby a market value is judged by whether those generating that value can survive through their labour, and via progressive taxation: in other words, wages must increase, and so must benefits.

This is pretty moderate stuff. It is neither Communism nor Socialism. It is just a fairer form of capitalism, and Polly Toynbee makes its case as logically and eloquently as it is possible to do. That was supposed to be the aim of the G20 summit: to make capitalism fair. But the G20 leaders, and the lobbyists who influence them, are interested in profits, not people. They will not make capitalism fairer.

It is we who must take charge of society – by opposing the irrational and dishonest arguments that working is, by definition, virtuous; by setting up and joining unions; by taking to the streets and protesting; by forming political alternatives to the tenable status quo; and especially by following Visteon’s example and standing up to the shadowy authority of capital.


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