Issue 211 of SOCIALIST REVIEW Published September 1997 Copyright © Socialist Review


Editorial, minimum wage, trade unions, inequality, Montserrat, South Africa

A test of strength


A crisis in the health service. Widespread opposition to charges which will end free education in colleges. Growing distrust of a government which in every area of policy seems to accept the dictates of big business and the 'fat cats' of whom it was so critical in opposition.

The euphoria felt after 1 May seems very far away. There was a sense of unease and even a convinced scepticism about Blair's intentions among a minority even then. That minority is growing as government actions fall far short of expectations. Even if such expectations were not massive, there was a general feeling that things would not get worse and that there would be small improvements in workers' lives.

At one level, the election of a Labour government represented a real change and reflected an even greater desire for change. However, in many workplaces and localities there is also an unwelcome feeling of continuity that we are still having to put up with too many Tory policies.

The plan to impose tuition fees and end student grants marked a significant betrayal of such hopes. A Labour government is attempting to make student conditions even worse than they were under the Tories. This has led to the first generalised crisis for Labour, since the issue hits substantial numbers of working class families. There is the sense that ministers are denying the next generation precisely the kind of opportunities which they had.

This crisis dovetails with a wider discontent felt most acutely by Labour and trade union activists­that the government is far more on the side of the bosses than it is of the workers. The British Airways dispute highlighted how close Labour is to bosses like Robert Ayling who set out to bust the union. Plans for benefits have retained several Tory cuts and there is no promise to increase the incomes of the very poorest other than to pretend that there is work for them. This has led even right wingers like Roy Hattersley to attack Labour for abandoning any commitment to equality. The uproar inside Labour over the leadership's proposed changes to the conference and the NEC is symbolic of the extreme unease about New Labour within the party's ranks and at even the highest levels of the trade unions.

Support for the lobby of Labour's conference on 28 September is an indication of the strength of feeling in the trade union movement and in the workplaces to commit Labour to policies which would benefit working people. The scale of what is possible is much greater than might have been thought even a few months ago. Union branches and shop stewards' committees up and down the country have backed the lobby and thousands of people look set to come to Brighton to protest in person.

The success of building this protest against government policies is of crucial importance to the future of working class struggles. We know that there are decisive battles ahead­in education, in the health service, in private sector firms which are attacking workers such as Barclays Bank and British Airways (both run by those close to Blair).

The outcome of these battles depends on the terrain on which we fight and the size of our forces. The issues are favourable to us. The vast majority of workers want more money spent on health and education, a minimum wage, more trade union rights and greater equality.

However, we need to mobilise sufficient numbers to mount a challenge to Blair and an alternative to the weakness and vacillation of what there is of the Labour left. That means building a much bigger Socialist Workers Party, extending the influence of Socialist Worker and beginning to sink roots inside the working class movement. Mobilising for the lobby is a test of our strength and influence. It also helps us to counter the pessimism which often affects some of the shop stewards and militants around us and to show that there are many people who want to mobilise against government policies.

Building a socialist alternative is not something which can be left to the distant future. We can make a difference to what happens around us now.

Wages: The bare minimum

Dave Beecham

With the appointment of the nine members of the new Low Pay Commission, the real arguments about the minimum wage are about to start. Up till now the employers have kept very quiet, but as the commission begins to gather evidence at a series of regional meetings during the autumn, the battle lines will become clearer.

The make up of the commission is very traditional: three employers' representatives, three right wing union officials and three middle of the road professors of economics. The members are supposed to act in a personal capacity­not a convincing notion when you consider that they include senior officials from both the TUC and the CBI. As for the independence of the professors, one of them is David Metcalf of the LSE who is already on record as arguing that the unions' target wage of £4.40 an hour (for 1996) is wrongly calculated and should really be £3.50.

Even if the minimum was this low it would still affect several million workers. Official figures from the Labour Force Survey indicate that more than three million people earned below £3.50 an hour last winter. Around 6.5 million people­more than a quarter of the workforce­earned less than £4.50 an hour.

The figures also show (see box) how low pay affects younger workers, women and those in smaller firms. Typically, it's the service sector where wages are lowest, above all shops, catering and hotels. In 1996 almost half the workforce in these sectors was paid less than £3.70 an hour. But nearly half a million manufacturing workers were also in this category. And it is not only back street sweatshops which pay these rates but large electronics and food firms.

This is one reason why there is bound to be a clash over the minimum wage. The Labour leadership likes to pretend that employers have accepted the principle­the only argument is about the level. But it is not just a question of cash, but also of how the law is to be enforced. There are two major questions: how to protect workers from victimisation for demanding their rights; and how to stop employers from cutting back elsewhere­on bonuses, overtime, holidays or sick pay­to claw back the costs. Ignoring these issues will mean the system is wide open to abuse, but tackling them involves taking a much harder line with the employers than Labour has been prepared to do so far.

Blair's law?

Dave Beecham

For the first time in 19 years the TUC meets with Labour in government, an occasion no doubt for some backslapping and photo opportunities. But the TUC agenda shows that, four months into the new government, even the legendary patience of the union officials is wearing thin. Despite the efforts of the top TUC bureaucrats to provide Tony Blair with a comfortable ride, motions from three of the largest unions­the TGWU, GMB and Unison­all challenge Labour's reluctance to deliver even modest reforms to improve workers' rights.

The TGWU motion calls for legislation guaranteeing the right to strike, drawing on the lessons of the British Airways dispute where the company tried to intimidate people by threatening to sue them for damages. The Unison motion challenges the government on the minimum wage, demanding a commitment to a specific target. The GMB takes up the key question of employment rights, calling for the abolition of the present two year qualifying period and for immediate legislation on union recognition.

All these motions strike at Blair's aim of consolidating his cosy relationship with the employers. But it is the GMB motion which raises the most important issues.

Under the Tories, people were deprived of their rights to claim compensation for unfair dismissal or redundancy unless they had been with the same employer for two years. In opposition, Labour pledged to abolish this, and even prominent management organisations such as the Institute for Personnel and Development have called for the time limit to be reduced to 12 months. Yet the government has stalled any reform, claiming it has to wait for a European Court ruling on a test case as to whether the rule contravenes the law on sex discrimination. Incredibly, this case dates back to May 1991.

What the government wants is a ruling which gets it off the hook. But it is far from clear that the European Court will decide that the two year rule discriminates against women. In the meantime, millions of people are being deprived of any legal protection. The government could change the law in days by means of a statutory instrument, but chooses not to do so on the grounds that industrial tribunals would not be able to cope with the flood of claims. On the same logic they ought to make burglary legal on the grounds that the police are overstretched.

The question of union recognition is a lot more complex. Under the Tories, all rights to recognition were abolished. But the law which previously existed (Section 11 of the Employment Protection Act) had little impact because companies were able to avoid or obstruct it. Since the election the TUC has had several meetings with Confederation of British Industry (CBI) on policy issues, including recognition. The government has been encouraging this process, once again because a deal done behind closed doors would avoid any suggestions that Labour was supporting the unions.

This approach carries grave dangers. There is no guarantee that, even if the CBI does a deal, it would be generally endorsed by employers. Secondly, any law which involves mechanisms to establish full union recognition is likely to be hedged around with all sorts of traps.

A law inevitably means supervised ballots, allowing the employer a say on which employees should be covered­the 'bargaining unit'. Anyone who has been involved in organising a workplace knows that it almost always depends on securing a base and then building outwards to win other groups of workers. Employers usually seek to frustrate this by demanding a ballot of all employees, or by insisting that supervisors and managers are included in the bargaining unit. A law on recognition is likely to reinforce this approach.

The other main problem is that the law is almost bound to give employers legal rights to derecognise unions. In the US this has given employers a free hand to undermine unions, using campaigns of bribery and intimidation backed up by the law.

There is a further complication in that European directives on redundancies and takeovers give employees the right to be represented, irrespective of whether they have a union. The government is on the point of starting consultations on whether the law should be changed­potentially opening the way for employers to avoid unions by setting up staff councils.

Of course everyone should campaign for a law on union rights. Labour must not be allowed to backtrack on its commitments, however limited they are. What are needed are simple laws and clear rules. Every individual should have the right to be represented by a union; unions should have the right to recruit, organise and campaign freely in any workplace. It should be illegal for any employer to prevent a worker being represented or to alter pay and conditions unilaterally. But currently the TUC is committed to an elaborate policy which would include setting up a new official agency to police recognition arrangements. The government has already pushed back any reforms to 1998.

The employers are certainly in no hurry. The TUC's approach could simply provide an excuse for further delay.

Inequality: Long division

Pete Morgan

Concern about the rising levels of poverty and inequality in Britain today have come to a head since the election of a Labour government. Roy Hattersley has recently argued that Labour must spend more money on the unemployed and those at the bottom of society. The war on poverty can only be tackled, he argues, if Labour is prepared to take from the rich and give to the poor.

The Labour Party leadership seems to want to redefine what it is to be poor and even question whether equality is a good thing. Gordon Brown said in the Guardian recently, 'We reject equality of outcome not because it is too radical, but because it is neither desirable or feasible.' Instead, he argued, what was now needed was 'equality of opportunity'.

Poverty has increased enormously over the last two decades. The rich have been getting enormously richer at the expense of the poor.

This has now been confirmed by a new report from the Institute of Fiscal Studies called Inequality in the UK which is the largest and most comprehensive analysis of inequality since 1983. Paul Johnson, one of the report's authors, said on its release, 'The increase in inequality is probably the biggest social change we have experienced in the last 20 years.'

The report concentrates solely on people's income (and not their wealth). What it shows is that the richest 10 percent of the population now have as much income as all households in the bottom 50 percent. And the rise in income inequality between 1979 and 1992/93 reversed a record of falling inequality in the previous three decades.

The report estimates, on the basis of people's income before housing costs, that some 11.5 million, or around one in five of the UK population, now live in poverty. If housing costs are taken into account this rises to 14.5 million­nearly double the figure from 1979. However, this figure is not static­people move in and out of poverty depending largely on circumstances, in particular unemployment. So while some 10 percent of the population are said to be stuck permanently in poverty, a third of the population have had some experience of being below the poverty line.

For the first time since the Second World War the share of income of the poor is shrinking. In fact, as the Child Poverty Action Group concludes, 'the statistics reveal that in recent years household income has not trickled down but filtered up from the poorer sections of society to the richer ones.'

This rise in wealth redistribution is not some accident, or an unfortunate outcome of economic forces that are beyond the realm of control. Rather it is a direct result of government policy which has shifted the burden of taxation from rich to poor, and cut expenditure on such areas as health, education and social services which particularly help the less well off.

The most noticeable change has been a cut in the rate of income tax for the rich people. In the late 1960s the highest rate of tax on earned income was 96.25 percent and this was only ever paid by a tiny number of rich. This has been cut substantially since 1979, particularly in the 1980 and 1988 budgets, to a figure now of 40 percent. The rich squealed about the higher tax levels. But this higher rate of tax was never paid on all income­it is only paid on income above the basic rate threshold, which now stands at £25,500. The Tories also changed the tax system to switch money from the poor to the rich. Christopher Giles and Paul Johnson of the Institute of Fiscal Studies did a study of UK tax changes between 1985-1995. They concluded that, 'Taxes were increased in a very different way from that in which they were reduced The switch from direct to indirect taxes has reduced the progressivity of the tax system to the advantage of those on high incomes and at the expense of those on low incomes.'

Thus simply as a result of tax changes the poorest 10 percent of the population lost, on average, 2.9 percent of their income a week, while the top 10 percent gained earnings limit of £455 a week.

If this ceiling was abolished and higher rate tax payers had to pay an extra 10 percent in the pound, £4 billion would be raised. Brown could also reverse the decision he made in his first budget at the end of June which will see the rate of corporation tax cut from 33 to 31 percent next April. This means that over the next five years the bosses will profit to the tune of £7.5 billion. If Labour combined this with an increase in inheritance tax to the level it was in the 1960s, which would bring in an extra £4.5 billion, then there would be plenty of money to be spent on pensioners who have suffered so much over the last two decades.

There are many other areas in which money could be found to benefit working class people. For example the government could scrap the £118 million it spends each year on the privatised school inspectorate Ofsted and spend that on teachers and schools. The charitable status for public schools could be scrapped and VAT charged on their fees.

But it is not simply taxes that have been used to shift wealth from poor to rich. While bosses have been making enormous profits, the level of wages, according to government figures, has fallen to the lowest share of 'the national cake' for 40 years. If the workers' share of national wealth was restored to the level of the early 1990s it would mean we would have a total of £24.3 billion more. This would mean a pay rise to every worker of £21 a week­going some considerable way to introducing a decent minimum wage that millions of workers desperately need.

What is lacking, however, is any political will on the part of the Labour government. Since 1 May it seems that everyone, except the rich, has suffered tax increases, or a rise in mortgage costs. It is not true that there are only limited resources to go around. The money is there­it is a question of how it is divided up. The only way to address many of the social problems in Britain today is to make the rich pay. But rather than wait for Labour to feed us a few miserly crumbs from the tables of the rich, we must redouble our efforts to fight for what is rightfully ours.


Dean Ryan

The recent rioting and street protests in Montserrat have highlighted the British government's reluctance to provide for Montserratians fleeing the devastation caused by the volcano. As international development minister Clare Short condemned islanders' criticisms of British policy over the evacuation, she revealed the government's complete contempt for people still officially regarded as British citizens.

One time Labour left winger Short boasted of a £41 million aid package for the island, but the vast bulk of this money is mostly intended to redevelop the island's tourist industry rather than the relocation and relief of the 4,000 homeless Montserratians still on the island.

Two thirds of the island has been virtually destroyed. Most of the inhabitants have lost their homes and livelihoods and have been left penniless as insurance companies have deemed volcanic eruptions to be 'acts of god', refusing to pay compensation.

The failure of successive British governments to provide prompt relief payments to the island's inhabitants has meant that many of the 6,000 Montserratians who have already evacuated the island have had to rely on their families and friends to help them resettle.

Now many Montserratians feel insulted by the relocation package finally offered by the government, which amounts to £2,400 paid over a six month period for persons over 18 years of age. And islanders who want to come to Britain will only be allowed to claim social security benefits for a two year period. Britain has made millions out of Montserrat since colonising the island in 1632. The use of slave labour enabled the British ruling class to plunder the island's natural resources, including sugar and cotton, and use that wealth to finance the industrial revolution and establish the British Empire.

The government's treatment of the islanders reveals how the British state treats its 'loyal subjects' in the last remaining crumbs of empire. The inadequate aid package exposes the sham of New Labour's 'ethical foreign policy'. When news of the 'aid package' emerged after months of government inaction it acted as the catalyst for the riots and forced Montserrat's chief minister Bertrand Osborne to resign.

Short's arrogant denunciation of the islanders' protests was a disgrace. As Labour MP Bernie Grant commented, 'She sounds like a mouthpiece for an old 19th century colonial and conservative government.'

South Africa: Where's the delivery?

Charlie Kimber

A judicial hearing has focused many of the doubts held by millions of black people about the slow pace of change in South Africa. It centres on the murder of Chris Hani, the South African Communist Party leader, who was gunned down by the ultraright in 1993 as part of an attempt to wreck the movement towards democracy.

Clive Derby-Lewis, the South African Conservative Party MP who set up the killing, and Janusz Walus, the Polish immigrant who actually carried out the assassination, are applying for amnesty from the state's Truth and Reconciliation Commission. If it is granted they could go free. Remorse is not a precondition for amnesty.

They have to tell the whole truth, show that the murder was politically motivated and that they were acting on behalf of a political organisation.

The theory behind the commission is that people who took part in crimes because of the existence of the apartheid system should now be pardoned. In addition it was hoped that by offering amnesty, the lower levels of the apartheid state's secret state would reveal the crimes of their superiors.

It is of course right that, for example, the members of the African National Congress's armed wing should be cleared of all blame for the actions they took against apartheid. Many black people might grudgingly accept that it is useful to offer an incentive to the junior ranks of the torturers in order to catch the real monsters. But the thought that Hani's murderers might go free is a step too far for most.

During the hearing, Derby-Lewis and Walus have revealed their undiminished arrogance and contempt for black people. Walus said that the 'hit list' handed to him by Derby-Lewis was headed by Nelson Mandela. However, he had decided not to kill him because 'the old goat was not worth it'.

Derby-Lewis (once feted by the British Tories' Monday Club) said that he considered Hani 'the embodiment of the anti-Christ'.

The amnesty hearing has attracted attention because the concession towards these butchers throws light on the much wider concessions made by Nelson Mandela's government. Recently a series of shocking statistics have shown how divided the country remains: one in three black families live on less than £80 a month, in a country where prices are not much lower than in Britain; the average South African is 16 percent poorer than in 1981.

The reality of how little has improved for workers economically and socially since the end of apartheid has caused a wave of criticism of the government from some of its staunchest supporters. The national congress of the mineworkers' union complained about 'the increasing distance between the working class and the leaders we put in power'.

It protested that the government's Growth, Employment and Redistribution economic strategy (GEAR) is just 'a juicy carrot to the transnational corporations'.

A recent edition of the Communist Party's magazine asked, 'If we are so much in power, where is the delivery?' It added that, 'as senior government comrades have begun to acknowledge, our tendency to exaggerate the power we acquired in April 1994 [the elections] has unintentionally sent a demobilising message to our broader constituency­"Thanks for the struggle, we are now in power, see you in 1999".'

For the moment the level of strikes is low. However, the trade union leaders have been forced to call a number of set piece national actions over particular government measures in order to provide an outlet for their members' anger. In the battle over the Employment Standards Bill (which will regulate basic working conditions) the Cosatu union federation called a region by region national strike over four days in the middle of August. It was solidly supported, but there is little sign of a militant strategy to win from the union leaders.

For the moment the ANC faces no serious national political competitors. But the potential is growing for workers to move towards militant action and for individuals and groups to embrace genuine socialist organisation.

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