Socialist Worker

Don’t let Gordon Brown and the bosses cut your pay

Interest rates are up, inflation is up, but Gordon Brown and the bosses want to keep wages down. Socialist Worker looks at the growing fight over pay

Issue No. 2051

Are you finding it more and more difficult to make ends meet? Does it seem like your pay has gone before you’ve had a chance to spend it? Have you had to put more on your credit card, or increase the size of your overdraft?

For millions of people in Britain, the answer is yes.

Inflation is soaring and interest rates continue to rise.

The price of what is in your shopping trolley, the cost of your mortgage or rent, the charges for your childcare, the outlay on your gas, electricity and travel – they’re all going up relentlessly.

Most people are finding that their expenses are rising even faster than the retail prices index (RPI) measure of inflation, which currently stands at 4.5 percent.

The Bank of England raised the base rate of interest last week to 5.5 percent. This means that typical homeowners with a £100,000 mortgage will have to fork out around an extra £16 a month in repayments. This adds up to £64 more each month compared to last August, when rates stood at 4.5 percent.

Already millions of workers are prevented from moving out of cramped and poor quality rented accommodation by the lack of affordable housing.

This problem has grown as the ratio of average house prices to average earnings has soared. The cost of the average mortgage as a proportion of wages has risen from roughly 20 percent in 1995 to roughly 45 percent today.


The upward spiral in mortgage costs raises the spectre of a housing crisis like that of the early 1990s, when almost 250,000 homes were repossessed by banks and building societies as people struggled to keep up with constant rises in their monthly payments.

The real inflation rate for homeowners and people renting in London, the south east of England and other areas of high housing demand is likely to be much higher than even the 4.8 percent headline figure. Yet these are not the only people affected.

Gas and electricity prices have soared over the past 18 months. Poorer people typically spend a higher proportion of their income on fuel bills than those in work. They could well find their inflation rate running into double figures.

Some commentators suggest that the growth in inflation is just a short term response to rising fuel costs. But there is growing evidence that this is not the case.

For example, council tax bills in 2007 rose by an average of 4.3 percent – well above the harmonised index of consumer prices (HICP), the government’s preferred inflation measure.

And according to the Daycare Trust, full time childminder fees increased by 9 percent last year, while out-of-school childcare costs rose by around 13 percent.

According to the banking services group Voca, the cost of living is increasing at above 5 percent a year, but wages are falling in real terms. The annual increase in take home pay is running at an average of just 3.6 percent.

Gordon Brown’s public sector pay freeze means that millions of workers, many of whom are already earning less than the average wage, are being offered pay rises of 2 percent or less – a significant pay cut in real terms.

Anger at Brown’s pay insult has spread throughout the public sector, with union after union declaring itself ready to fight the government.

This fury is feeding into an already existing mood to oppose privatisation and cuts.

Fighting for decent pay for all those who work in our public services is a key part of defending the public sector against private sector greed – after all, the privatisers’ first action is always to cut their wage bill.

In the wake of Tony Blair’s premiership there is a thirst for a new agenda in the public services – both among those who work in them and those who use them.

The government has thrown down the gauntlet to the unions. And the key task for socialists and trade unionists is to ensure that no group of workers has to fight alone. The battle for decent pay is on.

‘Long hours and low pay’

Jess is a newly qualified primary school teacher, London.

She said, “This is my first year teaching, and I really love my job. But the long hours and low pay are making me think about whether I can afford to continue in the profession in the long term.

“I graduated with debts of over £10,000 after four years at college. Next year I have to start repaying my student loan. That will add almost £140 a month to my outgoings.

“I’m already finding it a struggle to afford to teach in inner London. My housing costs are astronomical and my flat is tiny.

“Earlier this year I started looking to see if I could afford to buy a bottom-rung two-bedroom flat in London.

“But even then, my joint income with my partner was not enough to pay the repayments on a £187,000 mortgage.

“I don’t understand why teachers are so undervalued by the government. I work an average 52 hours a week at the moment, and in my first term I was averaging 70.

“I arrive at work at 7.30am and I carry on marking and preparing when I get home.

“Am I really only worth 2.5 percent? And, if that’s true, what does it say about how much the government values children in

this society?”

‘Fighting the enemy – the government’

Marianne is a civil service worker in Cardiff.

She said: “You would think that living in Wales means you get the chance to buy a place somewhere near where you work – but not if you’re a civil service worker.

“I commute over 15 miles every day, and it takes me more than 40 minutes each way.

“Lots of people I work with have to commute in from the valleys and it takes them even longer.

“I have friends who work for the tax credits department.

“The system there is in chaos, and the people who are ringing in are often in a bit of a state.

“It is civil service workers who end up taking abuse for the mess that the bosses and the government have created.

“Many of the workers there are paid so badly that they have to claim the same benefits that they are administering.

“But the government doesn’t even allow them to ring the same hotline as the public to get their claim sorted out.

“They have to ring a ‘special’ line – which is even more under-resourced than the line for the public.

“That’s how our bosses treat us. People, often vulnerable people, depend on us to deliver for them. Yet by the way we are paid, we are made to feel utterly worthless.

“When we were on strike on May Day, lots of workers from other industries came to visit our picket lines.

“Everyone was agreed that we are all fighting the same enemy – the government – and we should all fight together.

“It’s the only way workers have ever won.”

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