Vox Political: Eoin Clarke Shows How Labour Will Pay for Its Policies

Mike over at Vox Political has reblogged a piece by Eoin Clarke, who’s on Twitter as @LabourEoin, showing how Labour will pay for their reforms. It’s to counter all the critics, who complain that Labour haven’t shown where they’re going to get the money from.

See: http://voxpoliticalonline.com/2017/04/23/sick-of-people-telling-you-the-uk-cant-afford-labours-plans-show-them-this/ and follow the links to Eoin’s original article.

This also answers, in part, a deeper object that you’ll always hear from the Tories: That the country can’t afford Labour’s welfare policies. Of course it can. As Mike has shown ad infinitum, Labour kept well in budget during its time in power. The only period of massive overspending was when Gordon Brown had to pump money into the global economy after the banking crash. This wasn’t Labour’s fault. Labour had contributed to it by following the same ‘light touch’ regulation – in fact continuing the Tories’ deregulation of the financial sector – but the direct cause was the massive speculation and bizarre financial shenanigans of Goldman Sachs et al in Wall Street. I’m not a fan of Gordon Brown. Despite claims that he was ‘Old Labour’, I’ve seen no evidence to suggest that he did not share Blair’s neoliberalism. But Brown did keep us out of the Euro, and he did save the global economy.

What is clear that is the country and its people definitely can’t afford another five years of the Tories.

Thanks to the Tories’ privatisation of essential services, we are paying more for a worse service for everything from the NHS to the railways. We are paying more in subsidies for the rail network than we were when it was nationalised. And contrary to Tory claims, during the last years of British Rail when the network was operating under Operating For Quality, the company offered better value for service than any time since nationalisation or after privatisation. Since then, fares have been raised and services cut.

The same is true of the Tories’ privatisation of the NHS. Private healthcare is actually far more bureaucratic than socialised medicine, as the private healthcare companies charge for advertising and their legal department as well as administration. They also must show a profit for their shareholders. Thus, as the Tories have outsourced NHS services, a process that began with Peter Lilley and the PFI, costs have actually gone up due to the inclusion of private industry.

Not Forgetting the millions of low and unwaged workers, and the unemployed, Cameron and May have created.

There are 8 million people in ‘food insecure’ households, according to the UN. This is because Cameron and May have deliberately kept wages low, and introduced zero hours contracts, among other tricks, in order to keep labour costs down and the workforce frightened. As a result, we’ve seen millions of people forced to rely on food banks for their next meal. These are hardworking people, who have been denied a living wage, all for the profit of big corporations like Sports Direct.

Then there are the millions of unemployed and disabled, who have been thrown off benefits under the absolute flimsiest of pretexts. This has been covered by left-wing bloggers again and again. And tens of thousands have died from poverty and starvation. See the stats and biographies of some of those, who have been murdered by these policies, collected by Stilloaks, Johnny Void, Mike over at Vox Political, Another Angry Voice and so on.

It isn’t a case of Britain being unable to afford Labour. The country cannot afford not to have Labour in power.

Corbyn Will Re-Introduce Collective Bargaining and End Zero-Hours Contracts

This looks like a piece of very good news. According to Mike, Jeremy Corbyn plans to repeal the laws passed by Blair’s government in 1999 limiting workers’ rights to have a recognised trade union, and end zero-hours contracts.

Corbyn wrote a piece in the Observer stating that he felt the changes were necessary due to the scandals over Sports Direct, Philip Green and BHS, and the Byron Hamburger chain to help immigration officials arrest 35 illegal immigrants, who were working for them.

At the moment, current legislation stipulates that a union wishing to be recognised at a workplace must show that 10 per cent of employees are members, and 50% want them to lead in pay bargaining. If that isn’t the case, then a secret ballot must be held, at which at least 40% of those able to vote do so, and the majority vote in favour of union recognition.

Corbyn, however, wants to introduce a French-style system, in which firms with over 250 members would have to recognise a specific trade union, and bargain with them over pay. He states

“Even Theresa May understands she has to pay lip service to change in the workplace and the boardroom …,” writes Corbyn.

“But the best way to guarantee fair pay is through strengthening unions’ ability to bargain collectively – giving employees the right to organise through a union and negotiate their pay, terms and conditions at work,” he writes.

“That’s why it should be mandatory for all large employers, with over 250 staff, to bargain collectively with recognised trade unions.”

Corbyn also states that he wants all workers to be given specified hours, that are written into their contracts. If an employer wants them to work beyond these hours, they are to specify the length of time and give them a reason. They will also have to give workers additional compensation, similar to an on-call payment, for being willing to work beyond their usual contracted hours, whether the workers in fact do so or not.

Mike is unsure about the wisdom of the reforms on union recognition, and would like comments on this matter from experts on trade union matters and employment law. However, he welcomes the proposal to end zero-hours contracts.

See http://voxpoliticalonline.com/2016/07/31/corbyn-pledges-to-scrap-blair-union-laws-in-favour-of-collective-bargaining-and-an-end-to-zero-hours-contracts/

The decision to end zero-hours contracts is an excellent policy. Guy Standing devotes several pages in his book, A Precariat Charter, to attacking them. They are widely recognised as a highly exploitative and pernicious system of employment for those trapped in them.

Stewart Lansley and Joanna Mack make clear that the assault on collective bargaining and the trade unions was a deliberate policy of Maggie Thatcher, and has resulted in the contraction of wages, high unemployment, and the impoverishment of the working class in their book, Breadline Britain: The Rise of Mass Poverty(London: OneWorld 2015). They write

Deteriorating opportunities are also the direct product of an about-turn in the country’s political economy. At the end of the 1970s, fighting the rising rate of inflation became the number-one economic goal, displacing the former priority given to maintaining full employment. The instruments used – tight monetary and fiscal policies and a strong pound – accelerated long-term de-industrialisation, while triggering mass unemployment. The critical decision in the 1980s to adopt a more aggressive, market-oriented model of capitalism led to the sweeping away of regulations, the favouring of finance over manufacturing, the outsourcing of public sector jobs, relentless pressure on companies to cut labour costs and, critically, an assault on labour’s bargaining power.

Cabinet papers for 1983 reveal that Mrs Thatcher admonished Norman Tebbit for being too timid on trade union reform, telling him we ‘should neglect no opportunity to erode union membership’. In Britain the proportion of the workforce covered by collective bargaining has fallen from around eighty percent in 1979 to below twenty-five percent today (fifteen percent in the case of private sector workers). This is one of the lowest levels of coverage among rich nations, adding to the heavily skewed and economically unhealthy concentration of corporate power. The UK stands at twenty-first place out of twenty-seven countries in the European Union in terms of workplace representation, though parts of the European continent are also seeing more recent falls in the level of coverage, though from a much higher base.

Britain’s much vaunted ‘flexible labour market’, engineered during the 1980s to give business greater freedom to hire and fire, was necessary, it was claimed, to enable domestic firms to compete in an increasingly globalised economy. Such freedom for employers has continued to be championed by subsequent governments. Yet, just as over-restrictive labour laws can be bad news for dynamism, so can under-restrictive laws.

Britain’s low-wage, high-unemployment economy is as much the product of these internal, political forces as of external, economic ones. Indeed, it was later admitted by one of Mrs Thatcher’s top economic advisers that one of the government’s central aims was the taming of labour. ‘The nightmare I sometimes have about this whole experience runs as follows … there may have been people making the actual policy decisions … who never believed for a moment that this was the correct way to bring down inflation. They did, however, see that it would be a very, very good way to raise unemployment.’ This was how Sir Alan Budd, chief economic adviser at the Treasury in the 1980s, summed up – in 1992 – the multilayered assault on inflation and the unions. He continued: ‘And raising unemployment was an extremely desirable way of reducing the strength of the working classes…what was engineered there, in Marxist terms, was a crisis of capitalism which created a reserve army of labour and has allowed the capitalists to make high profits ever since.’ (pp.101-3, emphasis mine).

They further write on page 242

Perhaps the most effective, and radical, measure for boosting the total wage pool at the bottom would be a rebalancing of bargaining power in favour of the workforce. Another would be a more concerted attempt to reduce the significant pay gap between men and women by raising women’s wages. Both measures would raise the share of national income going in pay and would be critical elements of an effective strategy for cutting poverty levels among the workforce.

Far from being a strength, the sustained decline in workforce bargaining power in the UK is an economic and democratic weakness. Because of the ‘wage premium’ associated with collective bargaining, this erosion of labour’s bargaining power has played a big role in wage contraction. Evidence across sixteen rich countries has shown that the higher the level of trade union membership, the lower the degree of inequality. Further, it is likely that the erosion may have encouraged British employers to move down a low-pay and productivity road. By being able to minimise pay and rely on casualised labour, British employers – unlike say their German counterparts – have had few incentives to improve skills and introduce more productive processes.

Phased in over time, such a policy mix – a boost to the minimum wage, a reduction
in the numbers on less than the living wage, wider collective bargaining coverage and lower unemployment – would put the thirty-year long trend of a shrinking wage share into reverse, and make an important contribution to reducing poverty among the low-paid, while taking some of the strain off the benefit system.

Corbyn’s decision to expand and strengthen collective bargaining therefore appears from this to be an excellent measure. It will also doubtless be attacked by the Confederation of British Industry and the right-wing press and Blairites with just about every ounce of abuse they can muster. We’ll hear once more about how this will threaten British businesses with bankruptcy, and how this will lead us all back to the strike-torn 1970s, the Winter of Discontent, and all the old Thatcherite rubbish. The reality is that Britain was no more strike-prone in the 1970s than many other countries, and much less so than America. And the Winter of Discontent was, in the views of at least one historian I’ve read, the response to the system of wage restraint buckling under the weight of political pressure it was not designed to deal with, and which the unions should not have been expected to shoulder.

Of course, the real reason for the rage at the reinstatement of collective bargaining and the ending of zero-hour contracts will be that it attacks the nearly forty years of exploitative Tory employment policies that Maggie introduced. These employment practices have caused real misery, just as Thatcher and the economists she followed, von Hayek and Milton Friedman, intended them to. They should end now.

Dennis Skinner on Mike Ashley and Sports Direct

Mike over at Vox Political has published a piece about Mike Ashley, the founder of Sports Direct, finally agreeing to meet the Business, Innovation and Skills Committee, who are investigating the employment practices in his firm. Among the issues they wish to inquire into are claims that working conditions at Sports Direct result in employees working for less than the minimum wage. Ashley was unwilling to meet them at their headquarters, and so invited them to come to talk to him at his headquarters, but this violates parliamentary transparency. So they threatened to apply sanctions. This finally worked, and Ashley has agreed to go to meet them.

See Mike’s article: http://voxpoliticalonline.com/2016/06/06/sports-direct-founder-to-appear-before-mps-after-committee-prepares-to-apply-sanctions/

Shirebrook, where Sports Direct’s headquarters is located, is in Dennis Skinner’s constituency, and the left-wing Labour MP has a few sharp criticisms at Ashley and his firm in his autobiographical Sailing Close to the Wind: Reminiscences. Especially as the site occupied by it is on former coal tips, which were levelled and the land reclaimed through funding obtained by Skinner as the local MP. Skinner writes

Mike Ashley, the billionaire operator of sports shops on many high streets and the Newcastle United football club in the premiership, owns a huge Sports Direct warehouse in Shirebrook in the Bolsover constituency. I secured £21 million from Gordon Brown when he was chancellor of the exchequer to flatten Shirebrook’s pit tips and Ashley’s buildings sit on the reclaimed site. So Ashley’s plant was subsidised out of the public purse.

Sadly, MPs such as myself have no control over planning matters and East Midlands regional development agency didn’t heed advice to demand that trade unions be recognised. As a result, if all the workers I’ve seen from the place are representative of the whole workforce there, the warehouse is filled with hundreds of workers on insecure zero-hours agency contracts at little more than the minimum wage. So taxpayers subsidise Ashley a second time by topping up the low pay with benefits to enable his workforce to survive.

No trade union is recognised at Sports Direct in Shirebrook and I know from conversations with countless nervous workers that they’re terrified of speaking out of turn because they fear they’ll be sacked. Almost everybody I’ve come across was recruited through an agency, on poor conditions, rather than through Jobcentres. I know of very few workers there who are on full-time permanent contracts paying a living wage. I wrote to Ashley asking why at Newcastle United, the football club he owns, a trade union is recognised for the players but he doesn’t recognise a trade union for the workers at Sports Direct. Ashley never replied. What’s more, I, as the local MP, have never, on principle, set foot in the warehouse.

Greedy bosses such as Ashley are why I shall be a socialist as long as I breathe. He’s rich beyond the dreams of avarice by exploiting workers. Worth an estimate £3.75 billion, his loot increased by £1.45 billion last year according to the latest Rich List. He’s amassed a fortune even bigger than that grinning tax dodger Richard Branson. The helicopter Ashley flies in, to and from that Shirebrook plant, is paid for by the sweat of men and women who struggle to afford a bus fare home.

The truth is the Professional Footballer’s Association (PFA) forced Ashley to recognise a union at Newcastle United. Footballers are a tightly knit small group with a transfer value on the market. At Sports Direct, Ashley holds all the cards – the company hiring and firing at will. He dips into a large pool of vulnerable unemployed. (pp. 101-2).

This shows the double standards between the very lucrative world of professional football, and the poor souls, who slave away in sweatshops all over the world to produce the merchandising sold by exploiters and slave drivers like Mike Ashley. Sports Directs’ head should have much explaining to do, but I dare say he’ll get away with it, or escape with a bare minimum punishment due to the fact that he’s one of the go-getting entrepreneurs the Tories and New Labour just love. And bad luck for the rest of us.