Low Pay – and How The Parties Plan to Deal with It

A look at the cost of living crisis, and the plans the political parties have drawn up to combat it.

The Problem

Supermarket receipt

The spectre of low pay hangs over the heads of the poorest and neediest British citizens. Since 2010 over a million people have been pushed onto poverty wage, meaning that most people in poverty in this country are in employment. The country has experienced the biggest drop in living standards since the Victorian era. While the billions spent on Working Tax Credits end up subsidizing corporations such as Tesco, and Sports Direct.

The living wage foundation says that £7.85 per hour is a wage that is high enough to maintain a normal standard of living. The minimum wage is  £6.50 p/h.  The six major parties (Including the SNP as they could be the third largest party in parliament after May 7) all have different visions on how to deal with the cost of living crisis.  

The Plans in Brief 

The Conservatives

George Osborne said in 2014 that the country can now afford to raise the minimum wage above inflation but I find no explicit number pledged.

The main thrust of their plans to improve the lot of the low waged is to increase the tax-free personal allowance to £12,500.

The Labour Party

The Labour have pledge to preside over a rise in the minimum wage to £8 p/h by 2020.

They also plan to reintroduce the 10p tax rate, which they claim will lower tax for 24 million people. They also have plans to introduce tax breaks for companies paying the living wage.

The Liberal Democrats

Liberal Democrat policy appears to focus on removing minimum wage workers from paying income tax; which they will do by raising the income tax personal allowance to £12,500, but not until 2020.

There is little mention of any action on the minimum wage.

The Scottish National Party

The SNP are fighting for the powers to set minimum age to be devolved to Holyrood, where they will increase the minimum wage at least in line with inflation. It is their stated aim to eventually pay a living wage.

UK Independence Party

UKIP’s policy rests entirely on increasing the lower income tax threshold. They are the most generous offering a rise to £13,500.

The Green Party

The Greens are promising the immediate implementation of a Living Wage after May the 7th with a promise that nobody will be paid less than £10 p/h by 2020. The differential in minimum wage based on age will also be abolished.

Income tax plans are in flux until the publication of their manifesto, as they have presumably been rewritten after the dropping of the Citizens Income policy.

The analysis

Increasing the tax threshold at which lower earners start paying income tax, offered by the Conservatives, the LibDems, and UKIP appears to be a sensible idea. No doubt it would have some effect on the finances of millions.

However large sections of people employed on minimum wage are part-time workers; meaning they pay little or no income tax, so for many this policy means nothing. Indeed income tax for the low waged is a relatively small burden when compared to Council Tax and VAT. Meaning their energies might be better spent in Council Tax reform.

Labour’s commitment to an £8 p/h minimum wage by 2020 is questionable. The minimum wage has not yet recovered, in real terms, to pre-crash levels. To beat the pre-crash levels the minimum wage would have need to be around £8.50 p/h by 2020.

The SNP have a slightly fairer offering, at least the minimum wage would keep pace with inflation. However without a commitment to a Living Wage people are still going to struggling to make ends meet.

The Green Party are the only party advocating an immediate change to a living wage, which is a noble and achievable aim. Obviously the vested interests of big businesses and the CBI are lobbying hard against the policy in Westminster, using scare tactics of job losses, but they did the same when the minimum wage was introduced in 1998. There were no job losses then, nor will there be any now.   

min wage

The establishment parties’ policies are at best timid, and at worst harmful. A revolution is needed to crush the cost of living crisis, but it will not come from Westminster.

Originally posted on Quazen.com


In Defence of Jobseekers Allowance

This article seeks to address the concerns of the small but vocal minority of people who see Jobseekers Allowance as a problem, a leach on society. The “I have a job so why can’t they get one” crowd, that twists the welfare debate to such a degree that common sense is no longer heard.

Job Centre: The number of JSA claimants fell by 1.6% month-on-month.

The idea behind Jobseekers Allowance (JSA) is to help people into work. The reality is something different, something sinister.

If JSA was suddenly cancelled, the cost for the country would be far more than the £4.2bn a year the government currently spends on JSA. They would have to turn to food banks to live, they are driven to innumerable health problems which drive them to the NHS costing far more than £72.40 a week for JSA.

It’s like putting oil in the car, it costs you some money your engine doesn’t seize up and cost you hundreds more in repairs.

We can’t assume that these people are “lazy scroungers who want to sit on their arse while indulging in drinking and drug taking. Just 70p out of every £100 is lost to fraud.

The media fuelled by the coalition government) force feed us ideological dogma about the benefit system. They are lying to us to make people angry, to make hard working people scared, so they conform to an economic system that is run by the rich and for the rich. If people are angry about the benefits system it’s easy to miss the massive fraud which big business and the super-rich engage in endemically.

HMRC estimates that some £30bn (Other sources put it at closer to £100bn) is under paid in tax while benefit fraud stands at £1.6bn. That is the real scandal to be angry about

Companies like HSBC are helping their wealthy customers break the law to avoid paying tax. Others use dodgy connections with politicians to make millions, while they systematically erode the rights of workers making trade union action impossible.

The costs of joblessness are enormous, local governments alone are spending £345 million a year to support homeless people, mental health issues can plague people for decades and cost millions in upkeep. A jobless person forced off JSA, for one of the innumerable and spurious reason, could then be forced into theft to feed their starving families;  then the tax payer would ending up footing a much large bill for housing them in prison.

Giving the jobless a wage they can survive on and taking them out of the climate of intimidation, fear, and bullying that they encounter at the Job Centre could help hundreds of thousands of people into work. These people need money for bus tickets to get to interviews, cash for interview clothes, and a supportive environment where they are not dehumanized and demoralized; only then they will find work.

DWP - headless woman interpreted as having a headache

What’s more once you help more people into work the economy will grow. More people will be paying taxes and creating wealth. More people will be spending money allowing businesses to grow and employ yet more people.

But big business and the super-rich don’t want this, they want more people out of work because it suppresses wages, and makes it easier to fire people.

Jobseekers Allowance is an invaluable safety net, one which helps this country grow and prosper. Reform are needed, cuts are not.


Originally published on Socyberty