Must labour lose? And What is needed to win And what Labour in Wales can do

Must labour lose?

And

What is needed to win

And what Labour in Wales can do

Mike Hedges MS

October 2021

Introduction

Every time Labour loses a number of consecutive elections concern gets expressed over whether we can win again, and the opposite is also true, after Labour has won two or more consecutive elections there is a belief that we cannot lose.

In the 1950s Labour lost three consecutive elections with increasing Tory majorities at each election then it was said Labour could not win due to the increasing affluent electorate, but Harold Wilson won in 1964, increasing his majority in 1966 with Labour governing for 11 out of 15 years between 1964 and 1979.

1979 until 1997 were 18 years of Tory rule as the neo-Liberal policies of first Margaret Thatcher and then John Major took Britain far to the political right. Defeat, when victory was expected in 1992 led some to call for either a merger or an alliance with the Liberal democrats because Labour could never win alone. Of course, Labour had a landslide victory in 1997.

In 2010 we had a minority Conservative administration put in power by the Liberal Democrats and a majority Conservative Government in 2015, followed by another coalition in 2017 and a conservative majority government since 2019. We have seen the defeatists already deciding that we cannot win including those predicting the voting preference of not only those not yet born but those not yet conceived.

We have had three changes of Government since 1979, and each followed an economic crisis. Working backwards 2010 followed the banking crisis of 2008, 1997 followed black Wednesday in 1992 and 1979 followed the high level of inflation and going to the international monetary fund for a loan in 1976.

Difficult though it is for those of us who live and breathe politics to comprehend most people have very limited interest in politics. Approximately one third of the electorate have no interest in politics and do not vote, even at General elections.  Except when there has been a major economic shock enough people think “the Government is doing ok” for Governments to be re-elected. It has been said many times Governments lose elections rather than the opposition winning them.

Will Labour win the next elections, neither I nor anyone else knows. Can Labour win, the answer is undoubtedly yes.

When elections are discussed, there is a tendency to talk as if the electorate is the same at each election. Assuming a life expectancy of 80 and knowing that at 18 people become able to vote then large numbers of the eligible electorate at one election are replaced by those becoming eligible at the next.

To win the next election Labour needs to do three things

• Enthuse younger voters to vote
• Have an economic strategy that works for the many not the few
• Make people believe that voting matters and their vote can make a difference

What should Labour do next and specifically what can Labour do in Wales to show how a Labour Government can make a difference?

2019 was a very poor election for Labour but there was a belief that all would be well if we had a Tony Blair type Leader. That Labour results in the elections in May 2021, especially in the north of England and Scotland should have dispelled that illusion. That Labour did not appeal to enough working people is self- evident from the election results although in Wales we had our joint best ever result.

I will address issues that are necessary for Labour to regain support from not voting, voting for third parties, and voting Conservative because these are issues that affect or potentially affect the day to day lives of people.

Along with many in the Labour party I was critical of the Tony Blair Government especially over Iraq, but it must be remembered the 1997 manifesto had in it the first minimum wage, a free vote to end hunting with hounds, education as a top priority, rebuilding the NHS, getting young people off benefits and into work, safeguarding the environment and building strong communities.

I am promoting a series of policies that not only will be popular but will enthuse voters to vote Labour because it affects their lives and the lives of their family.

Employment practices

The first is to outlaw fire and rehire. Firing staff only to rehire them on worse pay and employment terms should be outlawed, polling suggesting the public backs a legal ban on the practice. The GMB union is now calling for a ban on the practice following the actions of British Gas towards its engineers. Fire and rehire is a dirty, bullying tactic used by unscrupulous bosses. It has no place in the modern world of work, and the public knows it. The public know it, we know it and Labour is calling for an end to fire and rehire tactics. A commitment now from the Labour party that it will be a priority when we return to power in Britain and in our next manifesto for the next Westminster election would be a good place to start.

Real living wage

Labour brought in the minimum wage, but we have now reached the stage where we should be legislating for the real living wage. The real Living Wage is based on the cost of living and is currently voluntarily paid by over 7,000 UK employers who believe a hard day’s work deserves a fair day’s pay. In April 2016, the government introduced a higher minimum wage rate for all staff over 25 years of age inspired by the Living Wage campaign, misnaming it the ‘national living wage’.

The Minimum wage is not calculated according to what employees and their families need to live. Instead, it is based on a target to reach 66% of median earnings by 2024. Under current forecasts this means a rise to £10.50 per hour by 2024 and from 2021 it was adjusted to include those over 23 years old. Currently it is over a pound an hour less than the real living wage.

The real Living Wage rates are higher because they are independently calculated based on what people need.  The law needs to be changed so that all employers ensure their employees earn a wage that meets the costs of living. One of the biggest problems facing us in Wales today is in work poverty which is something the living wage would help address and one of the Westminster government’s biggest problems is paying in work benefits which again paying a living wage would help address. I believe that the government has a moral duty to ensure a decent standard of living for all.

There are also benefits for employers, the living wage foundation report says “A Living Wage Employer ensures that all employees are paid at least the Living Wage, this includes individuals who work on a regular basis at your premises for a subcontractor, such as cleaners or security staff. Living Wage employers report improved morale, lower turnover of staff, reduced absenteeism, increased productivity, and improved customer service. “

Our ambition for Wales must be to create a high wage and high skilled economy and becoming a living wage country would be one further step along that road. We cannot afford it, and it will cost jobs has been the argument used against all progressive change from the abolition of slavery to the minimum wage.

We won the battle over the minimum wage and the loss jobs predicted to occur did not materialise. It may have reduced sales of top of the range cars, but it put money in people’s pockets and helped local economies. I believe that the economic and moral imperative is to set the challenge to make Wales a living wage country.

I believe that would make Wales a fairer country and this is a policy that all of us living in Wales could be proud and one we as socialists should be campaigning for.

Employment status.

If you work over 20 hours a week for one employer, then you are employed by them.  We have seen the rapid growth of a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs which is a form of exploitation with very little workplace protection.

This means that employees are not entitled to basic rights, including holiday pay and the national minimum wage. In the gig economy, instead of a regular wage, workers get paid for the “gigs” they do, such as a food delivery or a car journey.

We need legislation that says if you work over 20 hours a week for the same employer then you are employed by that employer and are entitled to all employment rights.

Improved employment protection, the real living wage, ending of people employed but being treated as self-employed and higher paid jobs. These are basic policies based upon Labour’s core values and, I am sure, will get the support of the electorate.

The state of the Welsh economy, poverty and low pay are all inter related. A successful Welsh economy should drive up wages and reduce poverty. Too many of the people living in Wales are employed on “flexible” (exploitative) contracts with no guarantee of weekly income based on variable hours and the government set minimum wage.

Zero-hour contract

Whilst much of the recent debate has been on zero hours contracts unfortunately this is not the only “flexible” employment practice used by employers. Other “flexible” employment practices include short, guaranteed hours, split shifts, annualised hours and using agency staff.  As well as the traditional short term and temporary contracts there has been a growth in the number of these “new employment” practices.

Increasing numbers of companies are taking on staff on ‘zero-hours’ contracts. Zero-hours contracts provides employers with a pool of people who are ‘on-call ‘and thus puts all the risk on the employee.

Short, guaranteed hours

A variation on zero-hour contracts but there is a guarantee of as little as one hour a day and when people arrive at work, they then discover how long the shift is going to be. Starting at 8:00 am you may finish at 9:00 am or must work until late in the evening depending on workload and the number of people who are available that day.  This is a highly disruptive work pattern because you are unable to make plans for any part of the day until the day itself. One concern is that if zero-hour contracts get banned this will be their replacement.

Split shifts or staggered hours

A split shift is a type of shift-work schedule where the work day is split into two or more parts which may be equal but are not necessarily so. This kind of pattern is common for people working in areas where there are peaks and troughs in demand such bus drivers and bar staff. It is generally not desired by employees because it involves their availability over long periods and the time in between shifts can be lost traveling to and from work. Whilst this working pattern can be beneficial for some with child care or other caring responsibilities it can cause problems for those who live some distance away from their workplace and obviously it is highly disruptive to the employees’ social and family life.

Annualised hours

The employee must work a certain number of hours over the year but there is flexibility about when they work. This system of annualized hours offers an answer to demand unpredictability and was first used in the UK in the early 1980s. Since then, many organizations from a range of sectors including the public sector have adopted the principles and applied them. One of the advantages to the employer is that it saves on overtime payments during busy periods but conversely the disadvantage to the employee is lost overtime and the working of anti-social hours without any financial reward.

Contract working or agency working

Whilst this has been common in areas such as construction and ICT where workers have been employed on short term, and usually highly paid contracts it has now expanded into other parts of the economy.

This includes the using of staff employed via an agency where most employment responsibilities are then with the agency. After twelve weeks in the same role working for the same employer, agency workers are entitled to the same employment and working conditions as permanent staff.  Crucially however agency workers are not entitled to benefits, such as occupational sick pay, redundancy pay and health insurance, the right to claim for unfair dismissal, and minimum notice of redundancy where they are working. This means that agency staff are much easier to dismiss than directly employed staff because they are employed by the agency not the company they are working at.

In conclusion, to employers the various forms of flexible employment practice reduces risk whilst increasing profits and competitiveness. For the employee it can mean an uncertainty of income and a highly disrupted life outside of work. The one thing missing from most of the organisations using these employment practices is a trade union to represent and protect the workers.

Our ambition for Wales must be to create a high wage and high skilled economy and becoming a living wage country would be one further step along that road. We cannot afford it, and it will cost jobs has been the argument used against all progressive change from the abolition of slavery to the minimum wage.

I believe that would make Wales a fairer country and this is a policy that all of us living in Wales could be proud and one we as socialists should be campaigning for.

Actions the Welsh Government can take

• Ensure all public sector workers employed by bodies directly funded by the Welsh Government are paid the real living wage
• Make paying the real living wage be a pre-condition for contracting with public sector bodies funded via the Welsh Government either directly or indirectly
• Make paying the real living wage a pre-condition of grants and loans to private companies.
• Banning exploitative contract by Welsh Government funded bodies and their contractors and sub-contractors
• Making financial support for companies both grants and loans dependent on non-exploitative contracts

This only gets us so far, what we need is more high paid employment.

The Welsh economy is significantly weak in many of the high paid high skill sectors of the economy. What we need are policies that work to support the growth of Welsh companies and establish new ones. We in Wales are no less skilled, entrepreneurial and capable than anywhere else in the World.

I have addressed growing the Welsh economy in a previous pamphlet available on my website https://www.mikehedges.org.uk/wp-content/uploads/2021/08/welsh-economyfinal.pdf

Housing

Housing is the third necessity of life after food and water but far too many people live in
substandard accommodation or are homeless or are concerned where they will move to
next. The only time in the post war period when housing need was met was when large scale council housing was built. This then meant that previously privately rented accommodation became available to be bought and owner occupation rates also went up.

This needs to be repeated so that everyone has a decent home and communities can prosper. When a community is made up of large numbers of people in short term lets then the sense of community is lessened.

Private rented sector

After the second world war the private rented sector declined as council housing and owner occupation grew but over the last forty years the private rented sector has grown in Wales, and it plays an important role in providing homes for people who are unable to access social housing or owner occupation. Private landlords vary from those with only one or two properties sometimes becoming landlords by accident, to professional landlords with a suite of properties. Tenants in the private rented sector vary widely from students and professionals sometimes in an area for only a short time to social tenants.

Part 1 of the Housing (Wales) Act 2014 regulates the letting of dwellings under domestic tenancies and the management of dwellings subject to domestic tenancies by requiring landlords to be registered in respect of their dwellings and to be licensed to carry out lettings’ activities or property management activities and requiring agents to be licensed to carry out lettings work or property management work.

A landlord can give notice at any time since the 29^th September 2020, but the minimum period of notice is 6 months unless the landlord is seeking possession on grounds of anti-social behaviour and/or domestic violence.

Whilst this gives limited protection and a period of notice I will continue to support the ending of no-fault evictions.

Leasehold Reform

A survey carried out in conjunction with the Leasehold Advisory Service found 57% of leaseholders somewhat or strongly agreed that they regretted buying a leasehold property.

The Welsh Government estimated in 2012 that there were around 200,000 leasehold homes in Wales and that number has almost certainly increased. Whilst leasehold is generally associated with flats, houses can also be leasehold. The extent to which developers are selling new-build houses on a leasehold basis has caused a lot of concern for many leasehold home buyers. It is easy to understand why flats are leasehold, the lease will make clear arrangements for maintenance of the communal areas, insurance, and the building’s structure.

Issues of concern raised have included expensive ground rent clauses which soon escalate from the affordable to the unaffordable and can make it difficult to sell the property. There can be charges for consent to alter the property, and even permission to sell the property. In some cases, the freehold interest has been sold to investment companies. A way around flats being leasehold is for there to be common ownership of the shared areas in flats between all the owner and this co-operative model works well in other parts of the world.

Planning Permission for New Dwellings

Planning permission for all new developments need to include a condition that all street lights, drainage, pavements, and roads are built to the standard for adoption by the local authority. Far too often developers build houses and put in roads that are not up to the standard for the council to adopt them. The first, those who have bought the houses know about it is when they contact the council for repairs only to be told that the road is not adopted. The building of roads and the other infrastructure to adoptable standard was
common practice in the past but some large construction companies have stopped doing it so we must legislate to make them.

Registered Social Landlords and Council Housing

We need more social housing; affordable housing should mean Council Housing and Registered social landlord (housing association) housing.  Rather than an all Wales target we should have targets for each local authority area so that local need can be met. The only time since the second world war when sufficient housing was being built was when substantial council housing was being built. We must build enough affordable homes to meet Wales’s projected housing needs over the next five years.  This should be achieved through empowerment of local councils to make full use of their powers and borrowing capacity to build homes and bring empty homes back into use for social rent

Housing Associations and Councils, which have not had stock transfer, should have a common waiting list. Also having a transfer system between Housing Associations and Council housing would make it easier for people to move. Currently you must know which registered social landlords have properties in the area you wish to live, but with a common application system people will only have to register once. With transfers people could then move between housing association properties and housing association and council
properties.

Social rent increases should be capped at Consumer Price Index Inflation so that rents do not outpace wages or benefits.

Housing finance needs to ensure existing tenants do not bear the cost of new homes and that they are funded similarly to other Council buildings.

Anti-Poverty programme

Anti-poverty needs to be at the forefront of everything that is done by the Welsh Government. For a socialist the removal of our fellow citizens from poverty must be a top priority. No socialist can be anything but dismayed at the effect poverty is having on individuals especially its effect on children.

We need a new anti-poverty programme to replace community first. Whilst Community First had both its critics and its failings it did achieve several successes especially after it was changed into clusters. Initially each community first area had huge autonomy and very limited external scrutiny but when it was developed into clusters then staff specialisation, and more importantly the sharing of good practice started. I was hugely disappointed with the ending of the community first scheme.

Community first had some excellent projects but expecting Communities First to achieve healthy, prosperous, and learning communities alone was unrealistic. It needed the support of a range of public, voluntary, and private sector agencies.

Many projects such as those listed below had a major benefit to the more disadvantaged people in Wales

A project that looked to help people through reducing utility bill outgoings thus enabling people to make more of their household budget.

A clothing shop project in which recycled unwanted clothes by selling them on at a much-reduced rate in the community.

A fruit and vegetable co-operative which supplied local people with affordable fresh produce.

A project that encouraged the take up of the smoke free homes initiative and smoking cessation schemes.

It is well known that those who are least well off are more likely to suffer debilitating illnesses and to die young.

The association between deprivation and ill health is complex, but we know that lifestyle and environmental factors play a major part in the poorer health outcomes experiences by those who are most deprived.

Another problem is obesity in children, even those as young as aged four to five, which unless corrected will lead to obese children growing into obese adults with an increasing chance of diabetes, heart disease and strokes.

So, schemes such as Healthy Balance that helped local residents gradually adopt a healthy lifestyle. Each week it ran a series of nutritional and physical activities for people to try out, giving local people the opportunity to improve diet and increase exercise.

Also, family lunch sessions were run weekly during term times to encourage families to both enjoy a healthy home cooked meal on a budget and to give advice on diet, developing cooking skills and food growing skills

One of the many disadvantages of being poor is that you end up paying more for energy, loans and until the arrival of the low-cost German supermarkets for food.    Most are on token meters and are, unless they are members of a credit union, unable to access low-cost loans and they often must resort to high interest lenders.

Things such as money awareness courses and basic budgeting, with credit unions working with the schools in an area to start up regular savings clubs to encourage parents to start saving for Christmas, saving with credit unions also will allow parents to access low interest loans.

The area where there is the greatest scope for improving life chances is with family learning and supporting children in their education.

Things such as the Family Learning Project that focused on the value of education in the home. It is well known that children from families that do not value education perform less well at school. In addition to the Family Learning project was homework club sessions targeted at children and parents who do not have ICT and Internet facilities at home.

A parent and toddler group aimed at increasing the development and learning of pre-school, children. It also supported parents with any parenting issues they may have by offering support, advice, and guidance.

There was also a scheme supporting young people to do well at school with open access play schemes run during the holidays for children between the ages of 5 and 14.  A homework club was also available providing support to children with their homework, with Math’s having been especially popular.

The loss of these facilities has had an effect on many communities and the health of individuals living in them. We need these sorts of schemes for our communities to improve our society

Public services

There is likely to be little if any extra money in real terms provided in the Welsh block grant so any changes in direction will involve setting or changing priorities; more money for one area of Welsh Government responsibility will inevitably mean less money in another area. Some of the priorities set out below will be different from the current priorities of the Welsh Government, while others reaffirm or complement the current priorities.

We need to highlight the importance of public services to our economy.

Private Finance Initiative (PFI)

PFI deals need to be examined and a cost-benefit analysis of buying out each scheme undertaken. The revenue cost of PFI schemes is having a detrimental effect on the money available for public service provision. We owe a debt of gratitude to Rhodri Morgan for not getting seduced by the PFI schemes that have unfortunately proven so expensive for public service provision in England. Nevertheless, Wales’s PFI bill costs the Welsh Government £100m a year that could otherwise be spent on supporting public services.

There have been only 23 schemes in Wales and very, very little new PFI in the devolution era, and of those 23, 21 of them are not the direct responsibility of the Welsh Government, belonging to local authorities and  the health service.

Local authorities could also be encouraged to consider use prudential borrowing to remove PFI contract if that produces a revenue saving. We must not introduce PFI by a different name, if you use private finance, it will cost more and leave less for providing key services

Produce contracts of a size local companies can compete for and provide support for them

Too many very large contracts are put out for tender. Whilst this is administratively easier, it is also the case that, the larger the contract, the fewer the companies – especially small- and medium-sized Welsh companies – that will be able to apply for it. If the aim of major Government contracts is, at least in part, to allow local companies to compete and benefit the local economy, then the size of the contracts will need to be reduced and, in some cases, contracts split so that more companies can compete.

Let Local Authorities decide what is best in terms of joint/shared working

Having spent several years discussing local government re organisation as if it were some silver bullet to solve the lack of funding for councils the threat of reorganisation has receded. It was as if the economic theory that predicts that an organization may become less efficient if it becomes too large or diseconomies of scale were unknown.

Different services need a different method of joint working, and most are best carried out at the current local authority level. Examples of services that would benefit from a regional footprint are transport, economic development, and regional planning.

Specialised social service provision and educational improvement could be dealt with by two or more councils working together within the regional footprint. Within Wales, it is the Councils that will know best what works for them and consequently they should be allowed to decide locally what works best for an area.

Have the same regional footprints for all public services in Wales

To give an example of current inconsistency: those of us who live in Swansea have a different regional footprint for almost every service. Thankfully for health Swansea and Neath Port Talbot are combined; the Fire and Rescue Authority covers Swansea, Neath Port Talbot, Carmarthenshire, Ceredigion, Powys, and Pembrokeshire; the educational improvement boundary is the same but policing, which is currently non-devolved, includes all the former county of Glamorgan except for Caerphilly; and finally, the Welsh Ambulance Service covers the whole of Wales.

The aim should be to have all services within the four footprints of Wales: the Cardiff City region; the Swansea City region; and Mid Wales region and North Wales. Whilst services could, and in many cases will, be on a smaller footprint than the regions, no service should cut across the regional boundaries unless it is an all-Wales service. This will allow regional working across services to be undertaken far more easily.

Improve educational outcomes

The Nobel Prize-winning economist, T.W. Schulz put the argument that education should be seen as an investment, which plays a major part in determining levels of economic growth, and Gary Becker gave us human capital theory, which states that investing in education has a payoff in terms of higher wages.

Education is pivotal to life-chances, and we need to work to ensure that household poverty does not lead to poorer educational outcomes. Like many others, I was very disappointed that Schools Challenge Wales – which was based upon the very successful Schools Challenge London – has been discontinued and I would like to see it revived.

Successful and improving schools such as Cefn Hengoed in the east of Swansea should be seen as role models for improving educational attainment, which is imperative if we want to become a high-skilled and high-wage economy.

Investment in Education is the best economic development tool. Higher Education is covered in a previous pamphlet available on my website https://www.mikehedges.org.uk/wp-content/uploads/2021/08/welsh-economyfinal.pdf

Education in schools and colleges will be covered in a future pamphlet

Key Recommendations

• End fire and rehire
• Improved employment protection,
• The real living wage,
• Ending of people employed but being treated as self employed
• Banning exploitative contract by Welsh Government funded bodies and their contractors and sub-contractors
• Making financial support for companies both grants and loans dependent on non-exploitative contracts
• Decent home for all.
• Ending no fault evictions
• Ending leasehold
• Large scale Council house building
• No planning permission without a commitment to producing the infrastructure to the council adoptable standard
• A new anti-poverty programme
• No use of private finance
• Improve educational outcomes
• Set contract sizes so local companies can compete