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To fight austerity we must quit the EU

Wages won’t improve while Britain remains part of the European Union, says ALEX GORDON

On Friday October 25 RMT members employed by outsourcing specialists Mitie to service and clean First Great Western trains mobilised 50 noisy, exuberant strikers on a picket line at London’s Paddington station.

They are demanding their employer raise pay rates from their current £6.37 an hour, which hardly covers the cost of travel to work and is barely above national minimum wage — upped to £6.31 this month — to pay a London living wage, currently set at £8.55 an hour.

It is a sobering fact that in order for a worker not to claim social security benefit a London living wage would need to be £10.70 an hour.

Mitie, with revenues in excess of £2 billion last year, stands for “Management incentive through investment equity” and provides contracts for often comparatively small investors to achieve guaranteed returns — a business model that depends entirely on driving a vicious downward wage spiral.

In September RMT members at Derby and other rail centres in the east Midlands, employed by Initial Cleaning Services at rates as low as £6.19 an hour, also struck for a living wage.

The living wage outside London, set annually by the centre for research in social policy at Loughborough University, is currently £7.45 an hour.

Cleaners employed by a roster of notorious, multinational subcontractors have taken strike action in recent months from London to Edinburgh and Newcastle to Plymouth and Swansea, fighting for dignity at work and a living wage.

However, the low-wage employment model is extending its grip throughout transport, health, education and public services, driven by coalition government and EU austerity policies.

As the Resolution Foundation recently showed, far from providing a safety net against poverty the national minimum wage, introduced 10 years ago by new Labour, has become a pay ceiling for increasing numbers of workers — mainly women.

A quarter of workers on minimum wage — some 320,000 people, 73 per cent of whom are women — have been stuck there for at least five years, as it becomes a permanent rate for workers seemingly destined for a lifetime of low pay.

More and more workers are paid close to minimum wage as competition to cut wage costs dovetails with government attacks on social security benefits. 

Some 7.6 per cent of UK workers, 1.9 million, earned within 25p of the minimum wage in 2012 — twice the proportion in 2002.

Some 140,000 workers — 7 per cent of all minimum wage earners  — have worked on it for least 10 years. 

Some 90,000 have earned close to the legal minimum since the policy was introduced in 2002. 

This means 5 per cent of minimum wage earners have been caught in the poverty trap for 13 years since the policy was introduced.

This year marked a historic regression for the British labour market. An economic recession longer and deeper than the Great Depression of the 1930s provided an excuse for employers to slash wages and incomes, while new and insecure forms of employment — including so-called “workfare,” increasing use of outsourcing by local authorities, government departments and the NHS and zero-hours contracts — moved to centre stage in the job market.

The coalition government’s strategy for growth through low wages ironically owes much to “Hartz 4,” the programme of the German Social Democratic government in the mid-1990s which aimed to force workers to accept lower pay by slashing social security spending and deregulating employment conditions, leading to the destruction of the very concept of permanent jobs for a significant section of the working population.

Our alternative to this low wage, insecure future in Britain must be to call for public investment, full employment and internationalism to combat the global race to the bottom.

For Britain public-sector intervention in ownership of utilities from postal services, to railways and other public transport, to housing and energy is not just desirable but essential.

“Osbornomics” is a result of the dominance of the financial sector, the City of London, which achieves profits through short-term speculation instead of long-term investment. 

Billions in cheap money from the Bank of England for “quantitative easing” has been hoarded by banks and does little to stimulate economic growth.

Only direct public sector intervention through public ownership and control can change this.

Withdrawal from the EU is the prerequisite to enable Britain to address this and adopt an active industrial policy. 

By withdrawing on progressive terms, Britain would massively assist all those countries across the EU struggling to renegotiate terms and end the prospect of years of mass unemployment and falling wages.

To mobilise a mass movement against austerity the key demands are the protection of what remains of the welfare state and policies to create secure, sustainable employment.

Between now and 2017 the question of a referendum on Britain’s membership of the EU will increasingly dominate political discussion.

Supporters of the British government’s right-wing austerity policies quickly point out that demands for a public ownership alternative are incompatible with Britain’s legal status within the EU — and this applies equally to the alternative economic strategies advanced by the TUC and the STUC, such as public ownership of Royal Mail or renationalisation of railways.

Unless the left and the trade union movement challenges EU austerity, these policies will continue under future British governments. 

Social services will be decimated and the housing crisis will worsen — providing Ukip and the extreme right with the arguments on the ground for even more reactionary positions.

In Europe the right is on the march. Support for pro-EU social democrats is collapsing. Racists and fascists are establishing bases within working-class communities and exploiting the EU for chauvinist purposes.

This is why the left, the trade union movement and all those opposed to austerity must be able to put a clear alternative that links EU withdrawal to the fight for jobs and public services.

EU withdrawal on progressive terms is the key unifying factor in providing a popular alternative to austerity, racism and xenophobia.

The left has to make itself the champion of the democratic right for a referendum on EU membership — and use it to argue for a new society that can carry forward all the best achievements of the past century and realise the longer-term goals of those who fought for them.

Alex Gordon is former national president of the RMT.

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