A new TUC report on pay has confirmed that Britain has suffered the biggest fall in real wages over the last decade of any major European country bar Greece. British bosses, with the help of their Tory representatives, have been at the forefront of the attacks on pay, terms and conditions.
A new report on pay, commissioned by the TUC, has confirmed that Britain has suffered the biggest fall in real wages over the last decade of any major European country bar Greece. The reality is that UK workers have seen their pay fall on average in real terms by 10% since 2007. According to Conor D’Arcy from the Resolution Foundation, this represents the “most prolonged pay squeeze in over a century.”
Embarrassingly for a Tory government which is always trying to tell British workers how lucky they are to be living in the UK, it turns out that over the same period there was a 23% growth in pay in Poland, a 14% growth in Germany, and an 11% growth in France.
What this report shows is that Britain has been leading the way in forcing down basic pay, cutting overtime and bonus payments – for all bar the bosses of course – and generally cutting conditions for many workers in return for being allowed to keep their jobs. When the new Minimum Wage was introduced earlier this year, this clawback process was accelerated for the lowest paid workers as management sought to compensate for the modest rise in the legal minimum pay level. High paid good jobs have been replaced with low paid crap jobs.
This is what must be borne in mind when considering the Tory government’s response to the report, where they complain that the findings ignore the rise in employment levels, which are in any case less than that being seen in Germany, Poland and Hungary. Nevertheless, the storm clouds are gathering for jobs in Britain. The last of the BHS stores will close in August, and today it was announced that Lloyds bank are to cut an additional 2,000 jobs on top of those already announced, with 9,000 jobs gone since 2014. More will follow.
EU economists now expect UK growth to slow down next year to its worst level since 2009. Some are blaming this on the Brexit vote – but in reality, given the weakness of British capitalism, this has been on the cards for sometime now, irrespective of the EU vote. The 0.6% growth level for the quarter ending June 2016 is now being seen as “the last hurrah” for the UK economy, not least since most of the growth was in April, with May and June doing far worse. The CBI has warned that business confidence has also fallen to the lowest level since again 2009. The aptly named Samuel Tombs, chief UK economist at Pantheon Macroeconomics, has stated that the CBI warning ‘adds to evidence that the economy is heading for a recession.’ This is what Chancellor Hammond means when he talks about “a period of adjustment”.
There is now some discussion about whether the new Tory administration under May and Hammond will “loosen the purse strings” in terms of Osborne’s austerity programme in order to stimulate the UK economy. The dilemma for them is the same one that Osborne had: whichever path the ruling class goes down within this system of capitalism in crisis will have disastrous results. The nightmare scenario for the Tories is that they end up boosting the national debt by raising state expenditure, but still nothing happens to the economy given the chronic under-investment and low productivity levels of British capitalism. Certainly any government stimulus will not involve pay rises for the workers. For them it will be austerity as usual.
This is why the only way forward for workers is to fight for socialist policies. The demands should be: nationalise the monopolies, banks and finance companies – and with no compensation for the fat-cats who have profited at our expense. Reverse all privatisations. Cut the working week with no loss of pay, so that the existing work can be shared out. End low pay – for a real living wage for all. Open the books – let’s see how the bosses have fleeced us, cutting pay and jobs while grabbing ever more profits for themselves. Re-organise production as part of a socialist plan under workers control and management so that the economy works for the many not the few. Health, homes and free education before bombs, slum housing and profiteering.