England, Wales and Scotland section of International Socialist Alternative

‘Historic’ Tory minimum wage rise not nearly enough

By Tom Barker, Socialist Alternative Leicester

The cost of living crisis continues to be a daily reality for millions of workers across Britain. Inflation (RPI) may have decreased to around 4% this year after peaking at 12% in 2023, but prices are still going up and real wages are still, in the vast majority of cases, going down.

This is the context in which the Tory government has increased the minimum wage from £10.42 to £11.44 and reduced the eligible age from 23 to 21. A government spokesperson describes this as a “historic moment”, representing a pay rise worth around £1,800 per year for a full time adult worker.

In reality, this ‘historic moment’ represents the failure of the capitalist system to maintain control over inflation combined with an (un)healthy dose of pre-general election pandering in a desperate attempt to shore up Tory support. While the increase in the minimum wage will benefit some of the lowest paid workers, it falls far short of what is needed.

What is a real living wage?

The ‘real living wage’ (RLW) set by the Living Wage Foundation charity, is currently at £12 an hour across the UK and £13.15 in London. There are currently half a million workers employed in companies which pay the RLW, although as we have reported in previous issues of our paper, so-called ethical employers like BrewDog and Capita have now abandoned this pledge. The Trade Union Congress, on the other hand, has been arguing for an increase of the minimum wage to £15 an hour (albeit by 2030).

After more than a decade of wage freezes and attacks on public services, £15 an hour brings wages more in line with inflation, although even this is just the start of addressing the crisis working people face. We say the starting point should be £20 per hour to meet the cost of living and to begin to redress the major losses suffered by workers over the past decades.

But the Tories’ minimum wage rise is not just inadequate because of the scale of the rise, but because it does not address a range of other factors.

Benefit payments, for example, have not been adjusted to reflect this new situation, meaning that those who rely on benefits, whether because of joblessness or because of in-work poverty, face continued misery.

The Labour Party is now once again publicly attacking benefit claimants. Shadow Work and Pensions Secretary, Liz Kendall, recently announced that there “will be no option for a life on benefits” – as if that is what people really want. It is clear that working class people need to look elsewhere for a solution.

Where did the minimum wage come from?

It is often said that the introduction of the minimum wage was one of New Labour’s biggest achievements. The Blairite-led Resolution Foundation has claimed that the National Minimum Wage, introduced in 1998, is the UK’s “most successful economic policy in a generation.”

Many working class people, on the other hand, will be left scratching their heads, wondering how the Resolution Foundation can talk about the economic success of this policy which has run concurrently with a total collapse in living standards. 25 years on from the introduction of the minimum wage, and with a Blairite Labour government likely to be elected sometime this year, workers are worse off than ever.

The truth is that the New Labour government was fundamentally anti-worker. Writing for the Telegraph ahead of the 1997 General Election, Tony Blair boasted that UK labour laws were “the most restrictive in the Western world” and he pledged to maintain these restrictions.

This was one of the few promises New Labour kept. Because they refused to roll back the anti-union laws introduced by Margaret Thatcher and others, the national minimum wage also became, in effect, a national maximum wage and was used as an excuse by unscrupulous employers to deny workers a good standard of living.

Making matters worse, the national minimum wage has also suffered massively over the years because of a lack of enforcement. This has led to a rise in sweatshops, with 6,000 paid far less than the legal minimum wage in Leicester alone – something which has been an open secret for many years – and which the state and the local authority continues to fail to address. 

We fight for:

  • An immediate £20 an hour minimum wage for all ages, and for future raises to be tied to the cost of living.
  • A benefit system that is fit forpurpose which reflects the real cost of living. Scrap benefit sanctions
  • Scrap all draconian anti-trade unionlaws
  • Fund the wage increases by nationalising the banks and the top corporations. Put profits into the pockets of workers, not shareholders
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