It’s time to tackle austerity and inequality

Fightback! newsletter

Living standards are continuing to fall for the large majority of people in Britain but the wealth of the ultra-rich minority is continuing to grow as if the recession had never happened. Yet the politicians remain wedded to austerity policies which are driving millions into poverty and undermining vital public services, while income inequality is allowed to grow to levels not seen since before the First World War.

The contrast between the way the increasingly impoverished majority and the millionaire and billionaire minority are being affected by these policies could hardly be clearer:

Average incomes for the majority have fallen by 10% since the start of the recession, according to the Office for National Statistics, and the situation is worse when real, after- inflation incomes are taken into account.

The number of adults in absolute poverty has risen to 8.7 million, also according to the ONS, and the number of children in such poverty has risen to 4.1 million – and those figures are continuing to increase.

The number of households living below the breadline now make up around 33% of all households, according to research by the University of Bristol, and 80% of tenants affected by the bedroom tax are finding it difficult or very difficult to make ends meet and are having to cut back on food, energy and other necessities to survive.

And the poorest fifth of households in Britain are amongst the most economically deprived in Western Europe, according to the OECD, and suffer deprivation on a par with Romania, Bulgaria and other former eastern bloc countries.

Yet Britain is still one of the richest countries in the world and life for the ultra-rich has never been better:

We now have more billionaires per capita than any other country, and London has more billionaires than any other city on earth, according to the Sunday Times Super Rich List.

The wealth of the 1,000 richest people in the country has doubled since the start of the recession, according to the Sunday Times Rich List, and increased by 13% to £518 billion in the past year alone. This figure is equal to one third of Britain’s GDP and is the same as the annual earnings of two thirds (20 million) of the British workforce.

Remuneration for FTSE 100 Chief Executives has risen to an average of £4.7 million a year, (almost £13,000 a day), according to the High Pay Centre, and they now take home 180 times as much as the average employee each year.

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And the richest five families in the country have as much income and wealth as the poorest 20% of the population, according to Oxfam.

What these figures show is that Britain has more than enough wealth to provide everybody with a reasonable standard of living and decent social provision – if it was shared out more equally and the ultra-rich and companies paid their fair share of tax. Yet millions of ordinary people are still falling for the lie that Britain is broke and that there is no alternative to austerity and to cutting pay and benefits for the poorest and most vulnerable.

But millions are also realising that they are being lied to and are increasingly fighting back to get their fair share and to defend their rights and entitlements at work and in society. These ‘rebels’ include people in local community and campaign organisations, in unions, charities and faith bodies, and in national campaigns like the People’s Assembly Against Austerity.

These organisations and their activities do not always get headlines in the national media, but by involving people in fighting against cutbacks and for fair pay, good working conditions, affordable housing and decent health, education and social services, they are doing something which is extremely valuable.

They are showing that we don’t have to accept a situation where what is best in Britain is being progressively destroyed, while the ultra-rich minority have more wealth than they know what to do with and are continuing to get even richer. They are also showing that we don’t have to wait for others to fight our battles for us and that we can make a real difference if we take up the cudgels for ourselves.

You may well be amongst that group but if you are not, isn’t it time you joined the fightback? Remember, every act of resistance counts and, together, we can rebuild our country in the interests of its people, rather than in the interests of the millionaires and billionaires which the current Coalition represents.


How much do you know about the People’s Assembly Against Austerity?

The People’s Assembly was launched on 22 June 2013 to promote the fight against austerity, to encourage large numbers of ordinary people to join that fight and to mobilise for co-ordinated action against the government policies which are increasingly impoverishing working people and those unable to work. It was initiated by the late Tony Benn (who became its first President) and by a range of union general secretaries, MPs, writers, journalists and academics, and by a large number of charities and campaign organisations. Its launch conference, in Westminster’s Central Hall, was attended by thousands of supporters from all parts of the country.

The Assembly organised a major demonstration in London on 21 June 2014 which saw 50,000 people from all over the country march to demand ‘No More Austerity’ and at which Russell Brand was amongst the speakers. (See Youtube for coverage of this demo and its speakers.) The Assembly was also well represented on the 10 July 2014 demonstrations by striking public sector workers who were demanding real pay increases after years of frozen pay and below-inflation increases.

The People’s Assembly is campaigning for an alternative to austerity and its demands include:

Reverse the cuts, re-nationalise our utilities and public services. Private profit is not for health, education and social services

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A statutory living wage, abolish zero hour contracts, end the wage freeze

Invest in building social housing, abolish the bedroom tax and place a cap on private rents

A higher tax on the rich and a clamp down on tax avoidance

Invest in creating green jobs

Increases to welfare and pensions should be tied to average earnings or inflation, whichever is highest

Stop scapegoating immigrants and those relying on social security

A publicly owned democratic banking system

End the cost of war in blood and money: No military interventions, no Trident replacement

Hands off our unions: support the right to strike, remove the anti-union laws and promote strong, effective collective bargaining

Despite its short period of existence, People’s Assembly organisations are being established all over the country and are helping to promote mass resistance to the austerity policies which are doing so much damage.

It deserves even more support and anybody who backs the demands outlined above is urged to look up the People’s Assembly on www.thepeoplesassembly.org.uk and get involved in supporting the organisation financially and in your local area. Alternatively keep abreast of what the People’s Assembly is doing by checking out facebook.com/thepeoplesassembly or twitter: @pplsassembly, or call the Assembly’s London Office on 020 8525 6988.

The People’s Assembly is a non-sectarian organisation which aims to bring together people of all beliefs and political persuasions to oppose austerity and cutbacks and to fight for a more equal and pro-people society in Britain.

It deserves your support and, if you give it that support, we can change for the better the way our country is being run. Join the fight now!


Employment and unemployment figures are continuing to improve

The Labour Market Statistics bulletins published in May and June showed employment increasing and unemployment falling in the quarters to end March and end April 2014. This is welcome but unemployment is still far too high and the average earnings’ details published in the same bulletins provided nothing but bad news.

Employment increased from 30.39 million at the end of February to 30.43 million at the end of March, and to 30.54 million at the end of April. The last of these figures showed that 72.9% of people aged 16-64 are now in work and the employment rate is very close to matching the rate which applied before the economic downturn in 2008.

Unemployment fell from 2.24 million at the end of February to 2.21 million at the end of March, and to 2.16 million at the end of April. This meant that the unemployment rate fell from the end-February figure of 6.9% to 6.6% at the end of April.

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Long-term unemployment remained a problem, however, with even the best of the above figures showing 791,000 people unemployed for over a year and 430,000 unemployed for over two years. In addition to this, the most recent figures showed unemployment amongst 16-24 year olds at 853,000, giving a youth unemployment rate of 18.5%. And 8.82 million people, aged 16-64, were classed as ‘economically inactive’ and out of work (but not counted in the unemployment statistics).

JSA claimant numbers also fell, from 1.14 million at the end of March to 1.12 million at the end of April and 1.09 million at the end of June. (Figures for claimants are a month more up to date than overall unemployment figures.) Welcome as these figures are, even the best of them are substantially above the 778,400 who were claimants prior to the economic downturn in early 2008.

It is also worth noting that the increased use of ‘sanctions’ against claimants, who miss meetings with advisers or who fail to apply for enough jobs every day, is driving a lot of unemployed people off the claimant list. And Coalition plans to make future claimants wait five weeks, rather than two, for JSA payments, is likely to reduce claimant numbers as well.

Job vacancies have been increasing of late, totalling 611,000 in March, 628,000 in April and 637,000 in May. However, this means that there are still around three and a half people on average chasing every vacancy.

#Update: The Labour Market Statistics published on 16 July 2014, after the above article was written, showed unemployment down to 2.12 million (6.5%). Full details are available from the Office for National Statistics website (www.statistics.gov.uk).


The situation on pay is getting worse

Unemployment may have been falling steadily of late, but there is no sign of this doing anything to drive up pay. In fact, if anything, the situation on pay is getting worse for the large majority of British workers.

This was highlighted by the June Labour Market Statistics, which showed that total pay (including bonuses) increased by only 0.7% in the year to April 2014, while regular pay (excluding bonuses) increased by only 0.9% over the same period. Both of these figures represented a reduction in real pay at a time when CPI inflation stood at 1.8% and RPI inflation at 2.5%.

According to the Office for National Statistics, this left average total pay at £478 a week and average regular pay at £449 a week – both around 10% lower than the pre-recession level.

Figures from the private pay research organisations were better than this, with Income Data Services and the Labour Research Department quoting 2.5% and XpertHR quoting 2% as the median settlement level over the three months to end April. These figures only relate to where here have been increases, however, and do not take into account pay freezes and pay cuts. These are more common than most people think, particularly in jobs done by young workers. Recent research by the Institute for Fiscal Studies, for example, showed that real living standards for under-25s fell by 13% between 2007-08 and 2012-13.

This collapse in real pay is impoverishing millions of people and is happening at a time when the High Pay Centre announced that the average pay of FTSE 100 CEOs is now £4.7 million a year – over £90,000 a week and 180 times the pay of the average worker.

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In the light of this, it’s been hugely encouraging that over a million public sector workers should have gone on strike for better pay on 11 July. Most of these workers have had three years of frozen pay and an increase offer of a mere 1% this year, and it has been great to see them telling the Coalition that they are not going to put up with it any longer. These workers should be an example for all of us, and we need millions more to tell their employers that unless their pay is increased, they will be taking action as well.

Remember, most of them can afford to give proper pay increases and if it is good enough for CEOs it’s good enough for ordinary workers too.


What way is inflation going now?

Price rises are slowing down, according to the Office for National Statistics’ figures published in mid June, but the slowdown is not consistent and we still have the highest inflation in the European Union.

According to the ONS Statistical Bulletin, the Consumer Prices Index (CPI) fell to 1.5% in the year to end May 2014, after rising to 1.8% in the year to end April. The Retail Prices Index (RPI) also fell, to 2.4% from 2.5% in April.

The new indices, the CPIH and RPIJ, fell as well, with the former down to 1.4% from 1.6% and the latter down to 1.7% from 1.8%.

The main reasons for these falls in inflation were falls in transport service costs (particularly in air fares) and a slowing down of price increases in the food and clothing sectors. However, there was upward movement in motor fuels, with petrol prices up by 0.4p a litre between April and May, and diesel prices up by 0.3p a litre during the same period.

Amongst the increases which stood out from the annual average were increases in the price of fish (4.2%), tobacco (7.1%), electricity (6%), gas (5.1%), tools and equipment for house and garden (3.3%), hospital services (4.8%), rail transport (2.8%), postal services (4.8%), newspapers and periodicals (6.1%), education (10.3%) and insurance (3%).

Our CPI rate of 1.5% was also the highest in the EU (jointly with Austria) in the year to the end of May 2014. It was well above the Euro area average of 0.5% and the EU average of 0.6%, not to mention inflation in Spain (0.2%), Italy (0.4%), Germany (0.6%) and France (0.8%).

Our CPI is still higher than that in Japan (1.4%) but we are currently doing better than the US (2.1%) and China (2.5%).

# Update: The Consumer Price Inflation bulletin published by the Office for National Statistics on 15 July 2014 has shown prices up from 1.5% to 1.9% under the CPI measure and from 2.4% to 2.6% under the RPI measure. Full details are available from the ONS website (www.statistics.gov.uk).


Private sector union membership is increasing

Union membership in the UK was broadly unchanged at 6.5 million last year, according to the latest (May 2014) figures from the Department of Business Innovation and Skills, but membership in the private sector increased for the third year in a row.


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The overall membership rate across the economy was 25.6% in 2013 but membership was still far higher in the public sector than in the private sector. There were 3.8 million members in the public sector, giving a membership rate of 55.4%, whereas membership in the much larger private sector was only 2.6 million, giving a very disappointing rate of 14.4%.

Women were more likely to be union members than men, for the 12th year in a row, with 28% of women in unions compared to 23% of men. Other groups who were more likely to be union members included disabled workers, those with higher educational qualifications, workers in full-time and permanent occupations and middle-income earners. Older workers were also more likely to be unionised than younger workers.

The report confirmed that union members are still better paid than non members, with the Union wage premium 19.8% in the public sector and 7% in the private sector. It continued:

“Trade union members in both the public and private sectors saw a rise in their average hourly earnings between 2012 and 2013. Private sector non members saw a broad stagnation in their average hourly earnings over the same period, while public sector non members experienced a reduction. Subsequently the overall gap between member and non member average hourly earnings increased between 2012 and 2013.”

Much of the BIS report is relatively positive but it is worth pointing out that union membership was around 13 million in 1979 and fell steadily up to the early 1990s, after which it stabilised rather than increased. It is also worth pointing out that the period of this fall and stagnation coincided with a huge increase in inequality between the wages and wealth of working people relative to the richest in society. In other words, the decline in union power and influence has been a major factor in the decline in real wages and in the massive increase in the wealth of the senior executives, speculators and other members of the global elite.

It is therefore vital that all of us play our part in rebuilding union membership and organisation and use that renewed strength to win a better deal for all working people.


Big fall in employment tribunal claims

The number of claims being sent to employment tribunals is falling rapidly, according to the latest figures from the Ministry of Justice.

The MOJ figures show that only 5,619 single claims were submitted in the first quarter of this year, compared to 9,801 in the last quarter of 2013 and 13,739 in the first quarter of 2013.

This represents a 59% reduction in the overall number of claims in the past year, but the figures are even worse for certain categories of claim. The number of unfair dismissal claims, for example, fell by 62%, while sex discrimination claims fell by 80% and claims for unpaid wages fell by 85%.

These figures have been welcomed by the Coalition, which has worked hard over the past few years to reduce the number of employee and worker claims. They have succeeded in doing this by requiring two years’ service with an employer before a claim for unfair dismissal can be made, by requiring payments of between £390 and £1,200 to pursue a claim and by making the system for claims and remission of fees so complicated that many would-be claimants give up rather than fight their way through all the bureaucracy.


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Yet for the past 50 years, the tribunal system has helped large numbers of workers get justice from their employers and has helped stay the hand of bad employers, some of whom would deny workers every right in the book if they thought they could get away with it. It is those bad employers who will benefit most from knowing that their workers are now less likely to demand their rights through the tribunal system. And it is the lowest paid and most vulnerable who will suffer most because of this.

But we can’t allow them to destroy the tribunal system and leave wronged and vulnerable workers to lose their right to fight for justice through the tribunals. We all need to educate ourselves about the new regime and rules for tribunals, and a good place to start is the excellent but concise explanation given in the Labour Research Department’s Law at Work 2014 guide (which has just been published).

We can also help by making sure workers know that their union may be able to give them free legal support to fight tribunal cases and may be able to pay the fees involved as well. We can also direct them towards Citizens Advice Bureaux or local community law centres (look up the Law Centres’ Network for details) which can give advice and refer people to charities like the Free Representation Unit (FRU), which will often provide free legal support. And even if legal support is not available, it is still often possible for workers to fight their own cases, preferably with some support from colleagues, and to win!

Other information on employment tribunals is available on line from the Department of Justice and HM Courts & Tribunal Service websites. Information is also available via the Employment Tribunals Public Enquiry Line (0300 123 1024 in England and Wales, and 0141 354 8575 in Scotland) and through the ACAS helpline (0300 123 1100). Forms and explanatory booklets, which you should be able to find on-line or to get from the ET Public Enquiry Line, include a booklet on Making a claim to an Employment Tribunal (T420), an Employment Tribunal claim form (ET1), a booklet on Employment Tribunal fees (T435) and a remission booklet and claim form (EX160A).

Details of ACAS early conciliation, which you have to engage with before submitting an employment tribunal claim, and the form for requesting such conciliation, are available from the ACAS Helpline or via www.acas.org.uk.


Law at Work: This is a must-have guide

If you need to understand your rights at work, or if you have to explain those rights to others or to represent colleagues at meetings with management, Labour Research Department’s Law at Work 2014 guide, which has just been published, is for you.

The guide, uniquely, is written for workers and union representatives, and is both comprehensive and easy to understand. In almost 400 pages it covers issues such as:

The employment law and employment tribunal system
Categories of workers and how they differ
Starting work and employment contracts
Rights to pay and conditions
Union and collective organisation
Discrimination and how to deal with it
Sick pay and sickness absence
Rights to time off for working parents and carers
Industrial action

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Dismissal
Redundancy
Business transfers and contracting out – TUPE
Sources of further information

The guide is invaluable for union reps and officials in particular, and will give you an edge in dealing with employers if you hold one of these roles.

Law at Work 2014 is available from Labour Research Department (LRD), 78 Blackfriars Road, London SE1 8HF, which can be contacted on 020 7928 3649 or via info@lrd.org.uk. The guide can also be purchased on line at www.lrd.org.uk.

It costs £29.50 and is worth every penny, regardless of whether it comes out of your pocket or is paid for by your union. However it can also be purchased as part of LRD’s booklet subscription service, which gives you 11 booklets on employment rights issies for only £50 a year. Contact LRD if you wish to know more.


Richard Lynch
30 July 2014

FBRL No 53 20140730

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