Winning the Living Wage at the Royal Opera House

The Independent Workers Union (IWGB) confirmed today that porters and cleaners working for MITIE at the Royal Opera House have secured a landmark victory in their fight for workplace justice that will lift them out of the poverty trap. 

Workers at the Royal Opera House have overwhelmingly accepted an agreement with the facilities company MITIE which guarantees all porters and cleaners receive the London Living Wage of £8.80 per-hour.

The workers voted by a 100% margin to strike during the BAFTA awards on 16 February. Their campaign has won widespread support. Award winning director Ken Loach issued an appeal for support demanding “No-one should cross your picket lines”. The actors' union Equity and the Musicians Union wrote to the Royal Opera in support of the IWGB members. Glenda Jackson MP joined 25 other MPs signing Early Day Motion 919 tabled by John McDonnell MP in support of the workers.

LEAP chair John McDonnell MP said: 

“This is a tremendous victory for the IWGB workers and it sends out a message to all low pay employers that we are not willing to tolerate poverty pay and we're coming for you."

The Royal Opera saw a series of mass protests by trade unionists and students who invaded the premises demanding justice. Following failed talks at ACAS, the Royal Opera offered to pay the current Living Wage in April 2015. The IWGB made a counter offer for:1 February 2014 the pay rate of £8.00 will apply; and from 1 April 2014 the pay rate of £8.80 will apply.  

The pay rise from 1 April represents a 25% increase from the cleaners' current pay of £7 per hour, but this increase (including employer national insurances costs) represents just 0.15% of the Royal Opera House's annual income. That's the equivalent of adding just 24p a ticket to every performance.  

With the union campaign escalating MITIE and Royal Opera House finally agreed to the settlement. Chris Ford IWGB General Secretary said: 

“IWGB pays tribute to the courage and determination of our members. Combined with the solidarity of the labour movement, of students and youth, we have secured this fantastic victory. In five months we have gone from arrogant disdain by the employers to win the first pay rise in three years for these cleaners and porters. It is an example to all workers struggling to live at present.”

Some union leaders may have given up the fight, but their members shouldn't

Public sector pensions are affordable and sustainable. That is not just the opinion of LEAP, but of the National Audit Office and the Public Accounts Committee, who both acknowledge, along with the IFS and the Hutton report, that the cost of public sector pensions is falling relative to our GDP - due in large part to the reforms achieved in 2007-08 between the then Labour government and public sector trade unions. These reforms according to the NAO save the taxpayer £67bn over 50 years.


Why then have public sector union leaders, for example those in Unison and the GMB, signed up to a deal that makes further cuts to public sector pensions?

George Osborne announced in his October spending review that he wanted to cut public sector pensions to cut the debt, not in pension schemes (which does not exist), but the debt caused by the banking crisis and recession:

"From the perspective of filling the hole in the public finances, we will seek changes that deliver an additional £1.8 billion of savings per year in the cost of public service pensions by 2014-15 – over and above the plans left to us by the last government."

So why would unions sign up to cuts to public sector pensions to pay for a crisis their members had no role in causing? In effect, by signing up to the government's agenda the unions are also accepting the their argument that a bloated public sector caused the crisis.

But, you may ask, didn't the unions wrangle concessions out of the government? Not according to the government's lead Minister in the dispute, Treasury Secretary Danny Alexander:

The heads of agreement deliver the Government’s key objectives in full, and do so with no new money since our November offer. In future, scheme pension ages will match the state pension age and schemes will be on a career average basis; all the agreements are within the cost ceiling that I set in November, and will save the taxpayer tens of billions of pounds over the decades to come.

Danny Alexander said on 2 November that he was announcing his final offer. So these fake negotiations since have not gained a single penny extra. If not worth signing up to on 2 November, why sign up now?

In a dispute about working longer and paying more for a worse pension, Danny Alexander has won on all three counts. As he told the House of Commons:

"We have already made some changes that deal with short-term pressures, including changing the basis of pension uprating to the consumer prices index and increasing member contributions by 3.2 percentage points, phased over three years. Those proposals are unchanged ... In future, scheme pension ages will match the state pension age"

So on each of the key questions union members should be asking what has my union (in the case of Unison, GMB, ATL, FDA and others) gained so that it could recommend this 'deal' (more honestly described as total capitulation)?

What's more, an emboldened Danny Alexander proudly announced the true political agenda behind the pensions reforms his government sought: "The new pensions will be substantially more affordable to alternative providers". So in signing up to this scheme, union leaders are facilitating the privatisation of their members' jobs as well as the theft from their pensions.

Union members, and even union excecutives, of course have yet to have their say on the proposals, so at the moment this backroom capitulation has yet to be signed off. Union branches and trades councils are already organising for a no vote and to put pressure on their executives, so their leaderships may have to fight again.

To date though, it is a tragic reflection of the UK's trade union leadership that after the biggest strike for a generation, there is an utter vacuum where an industrial action strategy should be. Capitulation now, will leave the government emboldened to cut more jobs, privatise more services, and further constrain pay.

Public sector pensions: the economic crisis debate in microcosm

It occurred to me today that the debate over public sector pensions is actually the debate about the economic crisis in microcosm.

Few deny we have a large deficit. Few would deny that the UK economy is in its most fragile state for a long time. Fewer still would argue that 'something' needs to be done about it. What that 'something' is the subject of vociferous debate.

For the Conservatives (the right, politically and economically) this is the time to wheel out the classic Friedmanite arguments. The crisis, so they allege, was caused by a 'bloated public sector', us 'living beyond our means', 'maxing out the nation's credit card' and 'not fixing the roof when the sun was shining' - from the ideological to the hokey.

Hence why the government states that public sector pensions must be slashed by £2.8 billion per year to pay for the deficit as they are part of that bloated public sector. They'll tell you that 85% of public sector workers have an occupational pension compared to less than 35% of private sector workers, that pensions are gold-plated, that "the pension system is in danger of going broke".


As we know from the Hutton report, the National Audit Office, the Institute for Fiscal Studies and the Public Accounts Committee (and this humorous interview with the witless Francis Maude) public sector pension schemes are not on the verge of implosion, and the pensions are not gold-plated, in fact they average about £5,500 per year. But why let the facts get in the way of a good ideological crusade against the public sector.

Next we come to the middle of the road. Some would call this the centre, but that gives it the illusion of reasonableness, careful impartiality and a thought-out position. Whereas the middle of the road is a completely illogical place to stand. Indeed, as Aneurin Bevan once said, "We know what happens to people who stay in the middle of the road. They get run down". In this group we find the hapless Ed Miliband, leader of the Labour Party, who I think it's fair to say bears a certain resemblance to soon-to-be roadkill; that caught in the headlights blank stare reflecting a completely illogical reaction to the current circumstance.


In Ed Miliband's case this is because the last Labour government, of which he and most of his shadow cabinet were members, re-negotiated public sector pensions - and as such made them entirely affordable. In fact as the Hutton report shows, the costs are falling. Nevertheless, Ed Miliband is determined to stand in the middle of the road and look stupid. So he condemns the Tories for not negotiating seriously, and also condemns the unions for striking against the Tories.

Sadly for Labour this same half-arsed mess is mirrored in their economic policy. They too think the public sector got a bit too big, especially on welfare (Byrne, Miliband, Purnell, etc) and there's too much immigration (Glasman, Miliband, Rutherford). What to do then? Well they've moved away a little bit from the clearly right wing response of Alistair 'cuts deeper than Thatcher' Darling, and now think the cuts are too far and too fast. So they would cut less and slower, but nobody likes to mention what (except for welfare and immigration, to triangulate to the Daily Mail because voters will clearly not see the Tories as more active on those issues). Remember, middle of the road = stupid.

Finally, we have the left represented today by only a handful of politicians, but more importantly by the trade unions and a number of other democratic civil society organisations. They, like the right have a narrative. In short, 'the finance sector caused this crisis, those on low and middle incomes shouldn't be made to pay for it'.


On pensions therefore they point out the voluminous evidence produced by mostly centrist organisations (see above) that show public sector pensions are affordable, sustainable and fair - and make reasoned arguments to that effect.

On the wider economic question too, the trade unions have also put forward a clear alternative (see Unite and PCS for example) that also rejects the needs for mass public spending cuts as counter-productive for the economy.

And so the fight to defend public sector pensions is really about who was to blame for the economic crisis and what we do about it. Like 1974, it's the government or the unions. Which side are you on?

Vitriolic attack on public sector unions

Hugo Radice

Anyone with an interest, personal or scholarly, in the threat to public sector jobs, and the efforts of trade unions to defend them, should look at the vitriolic attack on public sector trade unions around the world in the latest issue of The Economist:

"Briefing: (Government) workers of the world unite!", The Economist vol.398 no.8175, 8 January 2011, pp.19-21

The article is an extraordinary mix of lies, distortions and contradictions. It is clearly designed as an ideological primer for the ruling classes and their mouthpieces in politics and the media as they embark on this phase of crisis resolution. It provides carefully selected 'facts' from around the world, in an analysis designed to appeal to, and reinforce, anti-worker and anti-union prejudice.

Some selected quotes:

"The public sector ... is a haven of security and stability. Many people have jobs for life and performance measures are rare. The result is a paradox: the typical public sector worker is better off than the people he is supposed to serve ..."

"Public-sector unions enjoy advantages that their private-sector rivals [sic] only dream about. As providers of vital monopoly services, they can close down entire cities. And as powerful political machines, they can help to pick the people who sit at the other side of the bargaining table."

"Unions have suppressed wage differentials in the public sector. They have extracted excellent benefits for their members. And they have protected underperforming workers from being sacked."

"Generous pensions have produced an epidemic of early retirement."

"The unions' influence extends to the size and nature of the public sector ... [They] are relentless in demanding more resources and more personnel, which conveniently translate into more members and more dues."

"Public-sector unions combine support for higher spending with vigorous opposition to accountability."

Despite this extraordinary power and privilege, The Economist concludes, in relation to the current struggles:

"Public-sector unions will find it hard to win these battles. They have not been particularly successful in mobilising public anger, considering the scale of the cutbacks."

I only hope that we can prove them wrong.

Why trade union rights matter

Tomorrow morning (Fri 22 Oct), John McDonnell will be moving his Lawful Industrial Action Bill, which would tackle the increasing practice by employers of using minor technical errors in the balloting process - which have no material effect on the outcome - to take unions to court in order to prevent them from taking industrial action.

It would mean the repeal of one of the most pernicious pieces of Thatcher's anti-union legislation, just one of many - but it would be a step forward. The Bill itself is sponsored by a dozen Labour MPs, and was unanimously backed at TUC Congress in September.

When we look across the Channel to France, the importance of a fair legislative framework for trade unions is immediate. France has only 8% union membership in its workforce, compared with around 24% here yet their workers and unions are able to take effective action to resist attacks on their living standards.

And it's not just France, in South Africa public sector workers have won a 7.5% pay rise after 3 weeks on strike, with an 800 rand housing allowance thrown in too.

Gone are the days, as many will have seen in Made in Dagenham, when workplace votes could initiate strike action. In fact, it's fair to say the Equal Pay Act would not exist if Thatcher's anti-union laws had been in place.

In the UK the effects of the anti-union laws are clear: the value of wages has declined from nearly 65% of GDP in the mid-1970s to 55% today. Over the same period, the rate of corporate profit has increased from 13% to 21%. A large part of the reason for the global economic crisis, argues Graham Turner in his book, is the global squeeze in wages which has sapped demand out of the economy.

Whether or not John's Bill passes the first hurdle tomorrow - it needs 100 Labour MPs to attend to make sure - UK unions are going to have fight vigorously and innovatively despite the anti-union shackles around them. It's essential they do - people will suffer immensely, and the poorest most, if these cuts go through.

John McDonnell will be presenting his Bill tomorrow in Parliament from 09:30 tomorrow (Fri 22 Oct). You can watch live on the BBC Parliament Channel.

Update, Fri 22 Oct, 2:30pm: Unfortunately only 87 Labour MPs could be bothered to attend the debate and so the Lawful Industrial Action Bill fell. Very disappointing, but well done to all those who lobbied their MPs - and to those MPs who did attend and support the Bill.

Coalition broadens its attacks

The fragile Cameron-Clegg Coalition is drawing in more forces with mad but bad schemes to help with the assault on public sector services. And they are using little known, fast-track parliamentary procedures to get their way.

Today, the Cabinet Office launches its early intervention review. It’s a genius idea led by an equally stunning partnership of labour and capital - Graham Allen, Labour MP for North Nottingham and the chief economist of Goldman Sachs, Jim O’Neill.

Like many of the Coalition’s liberal-influenced ideas, the objectives are undeniably attractive. Experiments have shown that it is possible to prevent people falling into drink and drug abuse, vandalism, criminality and joblessness with targeted programmes of education and other forms of early social intervention.

Right-thinking Labourite Allen has been promoting the idea for years, and it fits in beautifully with the Coalition’s approach. The trouble is, cuts in government spending needed to reduce the deficit means there’s no money to pay for it. But don’t despair! Goldman Sachs is at hand, with proposals to draw in private sector investment. It’s really worth trying to get your head round it.

Early intervention saves money that would otherwise have to be spent on keeping repeat offenders and poorer people in prison. So if you can get richer folk to buy specialised investment bonds from the government, and use that money for early intervention schemes, you can pay the investors dividends in the future from the money you didn’t have to spend later on.

No really, they’re serious. Never mind that it was Goldman Sachs that talked the Greek government into the rather similar debt-based schemes that got it into so much trouble, bringing it to the brink of state bankruptcy. Goldman Sachs is after all a very successful, highly profitable company. Able to pay vast bonuses to its senior staff. An example to us all.

At the same time, Cabinet Office minister Francis Maude, a real Tory, and former managing director of investment bank Morgan Stanley, is advancing his campaign against public sector unions. He aims to reduce the cost of outsourcing swaths of government business from cleaning and catering to information technology, health and waste management.

Maude’s plan is to scrap the protection of conditions for workers whose jobs are transferred from the public to the private sector. It will be discussed in the Public Services Forum, a cosy consultation group involving unions and employers who take on outsourcing contracts.

Maude’s latest proposal follows in the wake of his emergency legislation to slash the redundancy terms of 500,000 civil servants. “Thousands of civil servants are sitting around doing nothing because it is too expensive to make them redundant,” he says.

“It is not a good way to treat people, to leave them in limbo with no actual job,” Maude believes. So he’s going to get rid of the current scheme, which can pay up to six and a half years salary, and cap it at 12 months’ salary for compulsory redundancies, but a “generous” 15 months for voluntary ones.

Just to speed things up, Maude has labelled the emergency legislation a “money bill” which limits the Lords’ ability to amend it, and allows the government to put it into effect as soon as it becomes law – which could be in October – without the usual two month delay.

A muted response from union leaders will only encourage the Coalition to press on with its attacks. Rank-and-file members facing the onslaught deserve and need better leadership.

Gerry Gold
Economics editor, A World to Win, www.aworldtowin.net
28 July 2010

Victory at Visteon, Bonuses for the City, and more job losses

On International Worker's Day, there's some fantastic news that Ford Visteon workers who have been occupying and picketing their factories to defend their jobs may have won a victory due to their persistence. Find out more from the Unite website.


Speaking from the May Day Rally in Trafalgar Square London, John McDonnell said their victory demonstrated "the power of workers' solidarity, 'united we stand divided we fall', 'unity is strength', 'an injury to one is an injury to all', 'the people united will never be defeated.

But while trade unionists in London were celebrating the hard won victory of 600 Ford Visteon workers in plants at Basildon, Belfast and Enfield, it has emerged that city workers in the banking sector are in for another billion pound round of bonuses.

According to the Office for National Statistics, city bonuses will be £7bn this year. John McDonnell MP and other Labour MPs have tabled EDM 1412 'City Bonuses' calling on the Government to "act immediately to introduce a windfall wealth tax on these bonuses" and "to nationalise the financial sector to protect the taxpayer, save jobs and ensure profits are used to fund public need rather than private greed."

Writing in the Morning Star last month, I wrote:

"when transnational corporations are deciding where to cut jobs, it is in their interests to choose British workers who are less likely to be unionised and where they have the lowest legal commitments to fulfil."

I wrote that as it was a logical conclusion given that, as Gordon Brown boasted to the CBI, the UK has "the most flexible labour market in Europe."

Today it was reported that "Britain lost more than 63,000 jobs at the start of this year, by far the most in Europe. Our cut-backs accounted for more than a quarter of the 220,000 jobs lost in the EU."

That is a direct result of this New Labour government refusing to restore trade union rights. It also shows if workers are to win they need to stand in solidarity, not behind their union's obsequiousness to New Labour.

Defending pay, pensions and jobs in a global economy

Professor Gregor Gall reports from the sub-plenary of the Beyond the Market Economy conference

It might be remembered that Mick Rix, former ASLEF general secretary and the original ‘awkward squad’ member, coined the acronym FUWL – ‘fed up with losing’ – at the turn of the new millennium to describe what people like himself in the union movement felt. This should now be updated to something like ‘fed up with not taking advantage of the opportunities presented’ – whatever that unwieldy acronym would be.

Last year saw the palpable declining popularity of ‘new’ Labour, increasing public anger at the effects of neo-liberalism on the public services – even if the beast was not called neo-liberalism – and opportunities for joint union action over public sector pay, foundation hospitals and so on. But no advance was made because an insufficient number of major unions and their leaderships were prepared to stand up to the argument that if you resist ‘new’ Labour all you do is let the Tories in. Few were taken by the counter-argument that ‘new’ Labour cannot be as good as it gets.

Indeed, last year all but one of the unions affiliated to Labour played their part in making sure Gordon Brown was coronated as Labour leader, and thus prime minister, without an election. Although many of them agreed with the policies of John McDonnell MP, they would not use their weight to get him on the ballot paper to force a contest. Instead, they thought it would be better to be onside with Brown and influence him from inside his tent rather than from outside.

Many, including the RMT, FBU and PCS unions, argued that these affiliated unions made a grave error given Brown’s continuation of neo-liberal policies, most graphically but also ironically exemplified by his state intervention to bail out of Northern Rock to the tune of tens of billions of tax payers’ money. Others said if Brown was the answer, the unions were asking the wrong question.

Now a new opportunity to exercise real influence is being afforded to the unions. It is made up of four components.

First, a visibly weakened government – almost regardless that it is a nominally Labour government - is now more open to acceding to the politics of pressure. The £2.7bn tax refund has set the stage for this but already Brown has made concession to longstanding union demands on agency workers, flexible working and social housing. Having strenuously resisted these for many years, suddenly Brown has allegedly and under pressure re-found the social democratic pulse in his body. The unions should sense that a door is slightly ajar and they can force it fully open.

The second is that Labour is now more reliant on union funding than it has been for the last ten years. Not only is it in severe debt, but the donations from business and rich individuals have dried up. Indeed, the debt is so bad that the two GMB members of Labour’s NEC have been indemnified against personal liability for their share of the debt because the banks want their money back now. Moreover, a general election has to be fought soon and this requires a war chest. This means that the unions can quite legitimately ask for ‘best value’ for their funding – this being the term the government uses for its funding of the public sector. So they would say ‘Here are our policies and you must act on them if you want our money’.

The third is that backbench Labour MPs, worried about their re-election prospects and having lost their reverence for Brown, are now open to supporting a whole array of private members bills that previously they would not touch because of the whipping system. Last year, the Trade Union Freedom Bill was talked out and defeated by ‘new’ Labour. This year, it could be reintroduced and taken right through the Houses of Parliament to end up on the statue book.

Fourth, inflation is set to become a really big issue. Historically, unions have made some of their biggest membership gains when workers realise that they need unions (and industrial action) to make sure that the real value of their wages keep up with the rising cost of living. With bigger and more assertive memberships, the unions could park their tanks of the government lawn at Downing Street and the mere threat of striking could be wielded to great effect.

But this opportunity is the proverbial window of opportunity because it will not remain open forever. May 2010 is the time when the window will close because the Tories, as expected, will win the next general election. They will be less open to the union agenda because of their politics and the strength of their new mandate. In the meantime, other pressure groups will realise that the window will close soon and will ratchet up their lobbying so the unions need to move fast if they are to have a clear run at bouncing Brown into doing what they want.

So will the unions be bold enough to take the opportunity? We’ll start to find out pretty soon as most of the big public sector unions are balloting on widespread strike action against the public sector pay restraint.

The answer to this question ultimately revolves around seeing the 7m union members as a resource to mobilised, and the need to re-energise and expand the activist base in the union movement as a cog to turn this bigger union membership wheel and link up in joint campaigning work with the organisations of those users of public services. In other words, the issue is really one of mobilisation, and ideas are needed to inspire and motivate – particularly when actual struggle is at a low level. So to inspire and motivate, the cutting edge of ideas must be based on a left critique of neo-liberalism and a sense of what the socialised alternative is. Whatever variety of thought there is on these ideas, the central theme is nonetheless a socialised economy where intervention in the market – by the state or some other popular body – is needed to moderate and ameliorate market mechanisms and market outcomes.

In the sub-plenary and in relation to fleshing out issues and ideas that are contained within the challenge of building a fightback against neo-liberalism and to go beyond the market we discussed:

• Global unions – while participants were in favour because of the need to face capital on equal terms, the key issue was what kind of global union. Several aspects emerged; what national and regional workplace foundations would these unions be based on, and how would members participate in and control these unions. The fear was that these unions would be mergers of head offices or bureaucracies, adding little to bargaining leverage.

• Closing the gender pay gap – participants highlighted the myriad of ways in which structural factors under capitalism lead women to be congregated in low paid occupations (even if equal pay is enacted) and subject to breaks in career or incremental progression.

• Public sector pay – this was seen to be the key battleground for unions to show their mettle in and for unions to make a breakthrough on. Joint, coordinated action was agreed to be critical.

• Final salary pensions – it was agreed that these should be defended where they still exist because employers can afford them but recognition was made of the situation where many are not party to such schemes. Consequently, the idea of a social pension was discussed which would be based on need not earnings to take account of those that carry out domestic and caring responsibilities in particular.