12 February 2015

Echoing the language of the TUC, David Cameron urged business leaders to “give Britain a pay rise” on Tuesday (10 February).

Cameron told the audience that companies can afford to pay workers more when they are benefiting from low inflation, falling costs and a growing economy.

He said; “For us business is not a conspiracy of runaway profits, depressed wages, inequality, and unfairness. It is the best generator of growth, wealth, work and opportunity there is: there would be no better way to demonstrate that right now than to give Britain a pay rise.”

He said he was encouraging business to “do the right thing”, rather than trying to run the economy “by diktat”.

In response, TUC general secretary Frances O’Grady said;

“Since David Cameron became Prime Minister the average wage is worth £2,500 less a year, the worst fall in living standards since Queen Victoria was on the throne.

“Saying it would be nice if wages went up is no more than pre-election mood music. If elected again his policies would do the opposite. Huge cuts would take spending back to the same share of the economy as in the 1930s. This would depress the economy and mean public sector wages would fall every year. On top of that he would make strikes almost impossible, holding back pay across every sector.”

After a four year assault on employment rights and trade union freedoms in which he has introduced a litany of policies designed to degrade pay and conditions, and to make it harder for workers to access justice, the hypocrisy of Cameron’s comments is jarring. As he knows, politely asking corporations to raise wages will have absolutely no effect.

PCS general secretary Mark Serwotka said: “Our report two years ago aimed to generate a serious debate about the effects of low pay on the economy. The fact the Prime Minister has finally caught up with this three months before the election could be seen as flattery, but is more like a sick joke.”

It is the IER’s position that collective bargaining is the solution to low pay and worker exploitation. To find out more about collective bargaining, the IER’s Reconstruction After the Crisis: A Manifesto for Collective Bargaining is available for purchase.