Work isn’t paying – but the North can act now to fix that

We struggled to come up with a good picture for this one, not gonna lie. Image: Getty.

Yesterday, the National Living Wage rose to £8.21 an hour, benefitting 2.4 million workers. But those workers are still paid less than they need to live –79p an hour less than the Real Living Wage of £9 an hour outside London.

Conventional wisdom suggests that work is a route out of poverty, and we live during a time where “record highs for UK jobs” are celebrated. But this is clearly not the full picture.

In the North of England, five years of talk about the Northern Powerhouse have yet to feed through to the wages northern people take home from work. The North’s employment rate is high, at 74 per cent. But weekly pay has fallen £21 since 2008 in the North and 1 in 5 jobs in the region pay less than the Real Living Wage, leaving 2 million working age Northerners living in poverty.

But in these challenging circumstances, the North is fighting back. With another metro mayor soon to join the North’s four existing elected mayors, there is another opportunity to demonstrate local leadership.

In the North, many public bodies are fighting back against low pay. Preston isn’t the only council with strong policies in this area, but it is rightly lauded for the Preston Model, using the Real Living Wage as one tool in its community wealth-building arsenal.

Other places are also fighting low pay. Sheffield City Council, Greater Manchester Police, and Northumberland, Tyne and Wear NHS Foundation Trust are some of 64 Living Wage Foundation accredited Northern public sector organisations.

When it comes to procurement, these organisations are working around and overcoming the legal and financial challenges often raised.

But of course, there is more to work than decent pay: job security, autonomy, and training all matter to workers. These are things councils and public bodies can require of contractors now.

Mayors like Andy Burnham and Steve Rotherham are drawing up employment charters to promote their visions of decent work which feature secure, well-paid, and fulfilling jobs with training and progression. We need to see more of this work across the North.

The wider impact of decent work

Next month, the North of Tyne region elects its first Metro Mayor, who must look to prioritise decent work in this area too. As IPPR North has previously recommended, the successful candidate should implement a Real Living Wage policy, starting with those directly paid or contracted by the Combined Authority and then influencing other public bodies.

The mayor should develop an employment charter too, consulting with employers, workers and trade unions to encourage decent work principles in the wider economy.

The positive impact of these policies extends further than the workers who are directly affected. The IPPR Commission on Economic Justice found low wages are as much a cause of national low productivity as a by-product of it: this means more people being paid the Real Living Wage could actually help raise productivity. It could also help boost struggling local economies, as workers buy the goods and services they need locally. Furthermore, the Treasury stands to gain from increased tax revenues.

Clearly central government must take action on low pay for the full effect to be felt by all. But low-paid workers cannot afford to wait.

Local leaders can start making a difference to their communities now. They should take the opportunity to do so.

Marcus Johns is a Researcher at IPPR North. He tweets @CllrMarcus.


The Tory manifesto promises to both increase AND decrease the rate of housebuilding

Housing secretary Robert Jenrick. Image: Getty.

In his 2014 Mansion House speech, the then-chancellor George Osborne expressed with uncharacteristic honesty the motives at the heart of how the Conservatives see British housing politics: “The British people want our homes to go up in value, but also remain affordable; and we want more homes built, just not next to us.”

Five years later these contradictions remain unreconciled and present in their manifesto, which contains two different and contradictory – but clearly extensively targeted and focus-grouped – sets of policies.

The Conservatives have two housing targets. The first is to make significant progress to hitting “our target of 300,000 houses built a year by the mid-2020s”. The second is their aim to build “at least a million new homes” during the next parliament, which implies a target of 200,000 homes a year. This is not only 100,000 lower than their initial target but also lower than the current rate of housebuilding: 213,660 new homes a year. They have therefore implied at separate points in the same manifesto that they intend to simultaneously increase and decrease the rate of housebuilding.  

There are similar conflicts in their approach to planning. They intend to make the “planning system simpler” while simultaneously aiming to introduce community-led design standards for development and planning obligations to provide infrastructure for the local community.

None of this is unsurprising, The Tories don’t seem to know if they want to build more houses or not – so of course they don’t know whether they wish to make it easier or harder to do so.  

Politicians like obfuscation on housing policy to placate NIMBY voters. Take for example prospective Conservative MP and ‘environmentalist’ Zac Goldsmith’s crusade to save treasured local car parks. The manifesto can equally be accused of pandering to NIMBY instincts, protecting their shire voters from all housing, including ones they might actually need or want, by promising to protect the greenbelt.  

Instead, Conservatives intend to foist development on Labour-leaning inner-city communities and prioritising brownfield development and “urban regeneration”. This requires massive, infeasible increases in proposed density on brownfield sites – and research by Shelter has shown there are simply not enough brownfield sites in cities like London. Consequently, it is not clear how such a policy can co-exist with giving these inner-city communities rights on local design. Perhaps they intend to square that circle through wholesale adoption of YIMBY proposals to let residents on each street opt to pick a design code and the right to turn their two-storey semi-detached suburban houses into a more walkable, prettier street of five-storey terraces or mansion blocks. If so, they have not spelt that out. 

Many complain of NIMBYism at a local level and its toxic effects on housing affordability. But NIMBYism at the national level – central government desire to restrict housebuilding to make house prices rise – is the unspoken elephant in the room. After all, 63 per cent of UK voters are homeowners and price rises caused by a housing shortage are hardly unpopular with them. 

There is anecdotal evidence that protecting or inflating the value of homeowners’ assets is central to Conservative strategy. When George Osborne was criticised for the inflation his help to buy policy caused within the housing market, he allegedly told the Cabinet: “Hopefully we will get a little housing boom, and everyone will be happy as property values go up”. More recently Luke Barratt of Inside Housing noted that most Conservatives he spoke to at the 2018 party conference were scared “they’d be punished by their traditional voters if the values of their homes were to fall”. He was told by a Conservative activist at the conference that, “If you build too many houses, you get a Labour government”.

But the senior figures in the Conservative Party are painfully aware that the continuing housing shortage presents major long-term problems for the Party. As the manifesto itself acknowledges: “For the UK to unleash its potential, young people need the security of knowing that homeownership is within their reach.” Perpetual increases in house prices are incompatible with this goal. The problem has greatly contributed to the Conservatives’ severe unpopularity with a younger generation priced out of decent accommodation. 

Equally, there is increasing evidence that ‘gains’ from rising house prices are disproportionately concentrated in the south of England.  The differences in housing costs between regions greatly reduce labour mobility, suppressing wage growth in the north and midlands, which in turn leads to greater regional inequality. The policy of coddling southern homeowners at the expense of the economic well-being of other regions is a major long-term stumbling block to Conservative desires to make inroads into the ‘red wall’ of Leave-voting labour seats outside the south.

Before dealing with the issue of where housing should go, you must decide whether you want to build enough housing to reduce the housing crisis. On this issue, the Conservative response is, “Perhaps”. In contrast, even though they may not know where to put the necessary housing, the Labour Party at least has a desire in the abstract to deal with the crisis, even if the will to fix it, in reality, remains to be seen. 

Ultimately the Conservative Party seems to want to pay lip service to the housing crisis without stopping the ever-upward march of prices, underpinned by a needless shortage. Osborne’s dilemma – that the will of much of his party’s voter base clashes with the need to provide adequate housing – remains at the heart of Conservative housing policy. The Conservatives continue to hesitate, which is of little comfort to those who suffer because of a needless and immoral housing shortage.

Sam Watling is the director of Brighton Yimby, a group which aims to solve Brighton’s housing crisis while maintaining the character of the Sussex countryside.