Bring back wages councils to tackle living standards crisis

In a speech to the Unions21 conference  today, TUC General Secretary Frances O’Grady, has challenged the Labour Party to introduce policies to reduce growing wage inequality.


Frances said that this should include a return to wages councils that could set legally enforced minimum wages in different sectors. They would involve union, employer and expert members, and could go significantly higher than the national minimum wage in sectors able to absorb the costs.


Frances said:


“We need action to boost wages for low to medium earners.


“The minimum wage must be made just that – with proper enforcement and real punishment for those who break its rules. And we must welcome Labour’s new commitment to get tough.


“And we should also go back to expecting it to increase above both wage and price inflation each year.


“We should also use the power of public policy to spread the living wage. It should be made a floor across the public sector, and we should use the power of procurement to spread the living wage in those who expect to do business with, or receive aid from, the public sector.


“As a former member of the Low Pay Commission I think there’s a gap. It’s never easy setting the same legal minimum for every workplace. And one big issue is that it is obvious that there are many sectors that could easily absorb a higher minimum wage but get the same floor as genuinely hard-pressed companies.


“That is why it was so disappointing to see the landed gentry out in force in the House of Lords this week to abolish the Agricultural Wages Board – something even Mrs Thatcher shied away from.


“Instead we should not just bring back a wage floor in agriculture, but look at renewed wages councils for other sectors too. Just like the minimum wage they would involve employer, union and expert voices.


“But rather than considering the whole economy they would look at the precise details of particular sectors where it is clearly possible to do better than a national minimum.  Indeed I am sure some could easily achieve, or even do better, than the living wage.”


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