Yesterday, STUC hosted a Scottish Living Wage Conference which – coincidentally - took place on the same day that Iain Duncan Smith made a major speech on welfare reform. As many will be aware, IDS has been somewhat reinvented as a “caring Tory” since the inception of the Social Justice Commission and his attendant tours of the housing schemes of Britain, including Easterhouse in Glasgow. The response to his speech has been mixed reflecting the fact that, in principle, some of his suggestions – such as simplifying the benefit system and removing financial barriers to work – could help a proportion of those who currently find that the inflexible benefit system and ‘other costs’ such as child care make working a negative option.
What was concerning, and I would suggest, more significant was the lack of any reference whatsoever to the prevalence of low pay and its relationship to the often mentioned aim of ‘making work pay’.
Despite this week’s announcement of a slight improvement in child poverty statistics – a Labour Government achievement which IDS seems intent on ignoring – in-work poverty is a major problem and a signal cause of child poverty. In this context even positive changes to the benefit system (are there’s no guarantee of that) are nowhere near enough.
Any government worth its salt and concerned about public spending would be up in arms at the extent to which the benefit system subsidises low paid employment. Equally any business which does pay decent wages should be concerned at the extent to which its low pay competitors are being supported by the public purse.
At our conference yesterday we announced the annual uplift of the Living Wage to £7.15 per hour and pledged to continue to press for its implementation by Scottish business and public sector employers. It is a modest sum, calculated to support individuals only to a very basic level. It is a wage that is some 25% higher than the completely inadequate minimum wage, but even on this rate of pay, many many families will be forced to use benefits to supplement their income.
Research from Kendra Strauss launched at our conference showed that 10% of men and 15% of women earned less than £7 per hour in Scotland, and the figure for those earning less than £7.15 will be considerably higher.
If Iain Duncan Smith has any ambition to ‘make work pay’, he will have to come up with a way to tackle low pay and his speech this week fell painfully short in that department.
Dave Moxham
Deputy General Secretary STUC
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