How the centre-left remains relevant in times of austerity
Below are a list of different initiatives the centre-left could look at as a way of helping those at the bottom of the income scale with limited money around. The rather basic and short examples and definitions listed here are a look at some, but by no-means all, ways to be left with ‘no money left’.
Tax increases – Not all taxes are vote losers, the 50p rate for example, is supported by well over half of the electorate; the bank levy, bankers bonus taxes or even certain windfall taxes on previously public-owned services. This worked in 1997 under Blair and it would work again now under Ed Miliband, with broad support shown for this sort of approach from some of our more unlikely allies, such as John Major.
Pay ratios – Late last year we saw Switzerland reject a pay ration of 12:1 in a referendum, rejecting the proposal with 65% on the no vote. That doesn’t mean it is the end for anybody who values income equality or of lifting the lowest paid out of in work poverty and poverty in general. Switzerland, currently rated the second most competitive country in the world is not alone in looking into pay ratios. Albeit perhaps less stringent, a few mutuals currently offer a binding pay ratio system in their companies, while France have also toyed with the idea.
Minimum Wage – A binding minimum wage for employers was brought in at the beginning of the ‘New Labour’ government. There was a fear that any minimum wage would lead to unemployment but this idea is now believed to be defunct, and since it was brought in unemployment has continued to drop. The minimum wage lifted many people out of the £1 an hour jobs and onto what at the time was just above £3 an hour.
We have seen the minimum wage being under-cut and creating a race to the bottom, with lease accommodation attached to jobs usually targeted at foreign nationals, whereby the employer ties accommodation to the contract so that people coming over here to work on the minimum wage also have a property to live in. However, what they are unaware of at the time is that the property is usually not a fit place to live and takes a large some of the wage they just earned. Without proper enforcement the minimum wage is abused by asking people to work longer hours than they are paid and employing people on bank/zero hour contracts – meaning that for fear of effectively being ‘black listed’ they remain and work over their specified hours.
Tax credits – They act as a negative income tax for those on the lower end of the income scale by way of increasing take-home money in your wage packet and beating the so called ‘poverty trap’ where means testing of benefits cuts off making people worse off in work than out. As a policy it was an admirable attempt to boost lower wages while also giving an incentive to work a policy that appeared without flaw. As with many policies there was and are unforeseen eventualities. One is that companies, primarily large shopping complexes pay their workers the minimum wage and then their wages get topped up by general taxation. This is in spite of the profits made by super markets in recent times.
Living Wage – This should be a wage calculated by an independent organisation and adjusted yearly to meet the basic needs of an employee. The increased adherence to the rate is down to both political pressure with Ed Miliband announcing his support on numerous occasions and setting out a policy that Labour will implement if elected in 2015. There are also groups in areas around the UK using community organising to help further the use.
These have, are or could be, implemented and built up on both at home and abroad. There is no reason to believe that as spending is tight, taxation can only bring in so much and doubters come out from the woodwork, that we the pragmatists and the fighters can’t still make a difference in government. It doesn’t have to make the ‘pips squeak’ or redesign the wheel. We can achieve more together than we can alone, so we must not give up on unity and social justice. We are not rich unless those around us can join in with our activities and for us to have cohesion.