The Poverty of Life in Britain

This is a two-part article looking at the decline in the quality of life for working people in Britain today. The first article focuses on the workplace, where there has been relative decline in wages and deterioration in the conditions of employment. The second part looks at the attack on the 'social wage'. Real wages, i.e. purchasing power has been declining and the overall infrastructure of what once was an advanced welfare state, has been crumbling.

This is the first of two articles looking at the decline in the quality of life for working people in Britain today. This first article focuses on the workplace, where there has been relative decline in wages and deterioration in the conditions of employment. The second part looks at the attack on the 'social wage'. This consists of the services and facilities we access such as health care, education, public transport and local services - all of which contribute towards the quality of life for working people in modern society. They form the provision in society of things working people, unlike the rich, could not afford to buy individually but provided on behalf of people by the State. Together the two elements - direct wages and the social wage - provide our quality of life, but both are now under attack, creating an impoverished life in Britain for working people.

Decline in Wage Levels

The first, and most obvious, experience working people are having today is a decline in the purchasing power of wages. This occurs when prices of the goods and services we need to buy increase at a greater rate than wages. In terms of purchasing power, the wages that working people have received has been declining in Britain over the past few years. The published figures announced by the government hide the true situation by not including items that form a large part of working class budgets, such as rent, mortgages or council tax rises.

However, a more honest measure of real incomes can be gained looking at alternative figures. The 'take home pay index' compiled by VocaLink, for example, provides information for the banking industry so that it can know the actual spending going on in the economy. VocaLink's evaluation for 2006 was that "the growth in take home pay is falling, at a time when households already face higher mortgage and credit card costs from rising interest rates". This loss in wage income was compounded during 2007 when they concluded that, "growth of take home pay has been modest throughout 2007, averaging just 3.5 per cent". Yet during 2007, people experienced a real inflation in prices in excess of 6%. This means simply that wages buy less and less, requiring cut-backs in what we can afford or pushing us to work longer hours (assuming, that is, that overtime is available). In terms of our direct wages, we are clearly getting poorer.

This situation contrasts sharply with the bank accounts of the rich and the huge expansion in executive salaries. As the ‘Guardian' survey last year revealed, executive pay went up by 37%, with an average pay for a chief executive at nearly £3 million - paid out by businesses, and justified by government ministers. Last month, Labour Minister John Hutton stated that huge salaries should be celebrated; and Northern Rock former chief executive Adam Applegarth is being given a £760,000 'golden goodbye'. In sharp contrast to this is the attitude taken towards the more modest claims of working people; Alistair Darling says public sector pay is to be limited to between 2-3%, with anything higher condemned as inflationary and unreasonable!

It's not surprising that this situation has led to an increase in income inequality; the figures clearly indicate this. In 1996, just prior to Labour's election victory, 10% of the population owned 63% of the wealth (excluding housing); now 10% own 71%. Britain under New Labour has become a more unequal society.

Faced with this situation, it is important for trade unions to fight clearly for wage increases that both match current inflation and make up for lost earnings over the past few years. It shows also the importance for unions and individual trade unionists to work actively in the Labour Party, and not leave the party in the hands of those who are clearly anti-working class, presiding over a decline in our living standards.

Casualisation of labour

Poverty of life in the workplace is not only experienced through declining wages, but also in terms of conditions of employment. In Britain there are some 1.4 million agency and temporary workers, whose ranks are growing year by year, and some of this growth comes directly from the privatisation of the public sector.

As the government pushes marketisation, jobs cease to be managed by government departments or local councils, where there is more security of employment and nationally agreed pension arrangements. In their place private firms take over the same tasks; they then employ staff through employment agencies, rather than direct employment. These workers then experience worse pay and conditions, ranging from lower basic wages and overtime, to lack of sickness benefits, holidays, maternity rights or pensions. Outside of the ex-public service sector, there is also a huge growth in casual employment in the manufacturing and service sectors such as hotels and catering. And this type of employment is not just in backstreet sweatshops. For example the majority of the workforce at BMW's Hams Hall engine plant in Birmingham are made up of agency workers.

Even in the teaching 'profession' casual employment is increasingly being used by management; it is now common to only employ part-time staff through agencies, rather than directly through the school or college. These people lose their employment rights and can be made redundant at the end of a sequence of short-term contracts, even though these contracts may end up running for several years. That is, there is really a permanent job that is being carried out, but the commitment to employment rights and pensions, which the employer should take on board, are avoided by the use of agencies.

While Gordon Brown took the pledge this year at Davos, with global capitalist friends, swearing allegiance to the ideology of the free market, millions in Britain face a poorer quality of life as a result of casual employment and poor working conditions.

Overtime and long hours

The poor conditions of employment that arise out of job casualisation also affect those in more permanent posts. The growth of a casualised workforce is used to help force down wages and demand extra work. In Britain this is particularly reflected in the abuse of overtime working. The TUC pointed out that four million people work more than 48 hours a week on average, an increase of more than 700,000 people since 1992. Full time employees in the UK work the longest hours in Europe - and these long hours are damaging family life and social life. Regular working of excessive hours is a direct contributor to poor health. In the Samaritans 2003 Stressed Out survey, they observed that: "People's jobs are the single biggest cause of stress... with over a third (36%) of Britons citing it as one of their biggest stressors."

The reality of this overworked culture amounts to people being caught in a squeeze between business pushing workers to work unpaid overtime and strategies adopted by workers to maintain their own living standards, not through higher wages, but longer hours. Both blades of this scissor movement amount to a poorer quality of life.

Last month during a lunch break at work, several of my colleagues reflected that when we were at school our teachers suggested that in the future the problem would not be work, but what to do with our leisure time. The soothsayers of the time were prophesying that technology would bring the working week down to 20 hours or less! New technology has certainly developed (beyond the imagination of our teachers at that time), but we are working longer hours than our parents were 50 years ago. Why is life harder? Why do we have to work such long hours? And, what is happening to all the wealth now being produced?

Marx pointed out that capitalists can make more profits by either: paying lower wages or extending the working day, that is paying us the same for working longer. There is no doubt that both strategies seem to be adopted today. Real wages are dropping as pay rises fail to keep pace with inflation; and we are working longer hours, a lot of it as unpaid overtime. All this is happening whilst the rich are getting richer and inequality in society is growing. Last month the TUC's analysis of official figures indicated that the number of people working unpaid overtime had increased by 103,000 during 2007, bringing the total to nearly five million.

Need for change

However New Labour politicians spin it, or however much the media might ignore the issue, working families know, from their daily experience, that the quality of life in Britain is declining. The greed of capitalism and the crisis of profits are being reflected in the relative reduction in wages and increasingly harsh conditions in the workplace. Living and working in 21st century Britain is harder and more stressful. It is time to look for clear alternatives. We don't want the inequality and chaos of the market system, but rather a rational planned society where the value of wealth that is produced is used to improve the quality of all our lives, where the benefits of new technology can be used to reduce the working week, not boost the profits of the few.

The Poverty of Life in Britain: The social wage

In the first part of this article on the poverty of life in Britain we looked at the experience of working people in the workplace. In this section our focus is on what is called the social wage. This is the social provision of goods and services that working people cannot, unlike the rich, provide for themselves individually. It includes such things as health services, education, pensions, support if you become unemployed, and local services such as swimming pools or meals on wheels for the elderly.

If you are wealthy you don't need these things provided by society: you buy them yourself. You can have a swimming pool in the garden of your big house, a housekeeper if you are getting elderly, and, of course, the best private medical care. But such things are not available to working people; rather, we have historically fought to get these provided through the state.


The actual gains made in the social wage in Britain, particularly after 1945, reflected both the strength of the working class movement and the relative ability of capitalism to afford this increase. However, with a crisis of capital over the last three decades, a three-fold process has unravelled. Firstly, there has been a shift in the burden of taxation over the last twenty years, from the rich to placing it on the working class. Secondly, the delivery of the social wage is now being shifted from public ownership and becoming privatised. Because of this change, the privatised sector is making super profits, creaming off funds from the social wage that would otherwise be spent on better services. The third factor is a result of the first two, because since there is proportionally less available for the social wage, there are cuts and reductions in what we receive at the end of the day.

NHS: who pays?

There is an increasing poverty of health under New Labour, which is reflected in the decline of services available to working people. Since Labour came to power in 1997, a large number of hospitals have been closed, with more planned over the next two years. Where hospitals have remained open, bed numbers have been reduced and departments such as maternity and A&E have been closed. In 2007, the Royal College of Nursing stated that 22,300 NHS posts had been lost in England in just 18 months. The quality of patient experience has also deteriorated, as hospitals are under-staffed, nurses overworked, patient 'through-put' is speeded up to meet targets, and hospital acquired infections are at an all time high.

These cut-backs in the quality of provision have occurred when there has actually been an increase in the money allocated to the overall NHS budget. The NHS budget was increased by 9% in 2001, and subsequently the annual budget for 1999-2004 had a planned rise from £49.3bn to £78.7bn. The critical point is that this money has not been spent on providing facilities for working people - quite the reverse. It has gone largely to boost the profits of the private medical, service and pharmaceutical companies. These companies are now, on a year-by-year basis, recording record profits. The pharmaceuticals have a average 18.9% profit-to-revenue ratio. It is by far, the highest of any industry in the United States (where many are based); and Britain's own pharmaceutical industry profit level is second only to the US.

The reality is that money allocated to the NHS is being drained away. The end result is that the availability and quality of health care for working people has been reduced. Charges for health care are increasing, new drugs are not being provided 'on the NHS', and, at a local level, medical support services and local hospitals are closing.


A poverty of education is reflected in fewer and fewer working class children choosing to go on to university because of high student fees and lack of support grants. In 2006, when fees were first introduced, there were 15,000 less applications to university. In the following year, the government fixed the figures by including students applying for nursing and midwifery degrees, hence increasing the total applications. Incidentally, this pushed up the figure of those applying from working class backgrounds; but this manipulation hid the real situation, because nursing has always drawn large numbers of applicants from the working-class. At the chalkface, teachers in schools and lecturers at Further Education colleges have been reporting the true state of affairs: an increasing number of students from working class backgrounds are openly saying that, while they would like to go to university, they cannot afford it.

University: does class matter?

Those who do go to university are straddled with huge debts as they eventually enter the world of work. Many of these students are increasingly studying at universities near their hometowns, as it is cheaper to live with parents; the number of "home" students has risen from 18% to 56% over the last ten years. But this puts an increased burden on families as well as limiting choice for students. This contrasts sharply with the experience of well-off middle class students, who, with the backing of parental income, have a wider choice, as living away from home and paying rent is not a financial problem.

At this year's Labour Party Spring Conference in February 2008, Gordon Brown, in a typical piece of empty rhetoric, stated: "We are the first generation to be able to say that there need be no limit on how far your talent can take you." He has clearly not understood the basic socialist premise that opportunity and equality are meaningless in a society of economic and material inequality. Merely having the formal 'right' to education is an empty phrase when poverty and exploitation is built into capitalism. Working class families in previous years thought that they were winning the battle for a decent education system, one with real equal access to all. This was the meaning of free education and support grants for students to live on while at university. Now the education system has been redesigned to favour those who can afford it.

The lesson we should all learn is that no reforms can be guaranteed while capitalism, a system built on inequality, remains.

Local Services and Pensioners

The poverty of life in Britain is also reflected in cuts in services provided by local authorities to individuals and the community, while at the same time council taxes are increasing at a rate higher than wage increases and pensions. Similar to the situation in the NHS, money from local authority budgets is being drained away into the profits of the private sector through compulsory directed privatisation measures.

In 2008, a report, "Your Money or Your Life" by the Leonard Cheshire Disability, highlighted evidence that the situation facing disabled people is one of increasing poverty and social isolation. Although local authorities spent over £14 billion on all social care services between 2006 and 2007, this was needed to support an estimated 1.75 million people, many who are elderly, as well as others coping with stress from work or physical disabilities. Yet, the disabled have been subjected to cuts in care - a direct result of the marketisation of services, where private firms cream off profits from the public sector.

Now local authorities are rationing our care services. With recent government announcements, disabled people are facing even harsher eligibility criteria, which will put pressure on hard-pressed families. The result, as support for the disabled is cut, is that an increasing number of family members will need to become full-time carers, thus pushing these families into a spiral of debt and poor health.

For the elderly, the situation does not look much better. In 2004 there were 11.1 million people of pensionable age in the UK, and this will rise to 15.3 million by 2031; within this group there will be a rise from 1.9% to 3.8% of those who will be over 85. Pensioners are one of the key groups of people with disabilities, yet they face a situation of declining social care. The Counsel and Care's "National Survey of Local Authority Care Charging and Eligibility Criteria" from 2006 showed that social care provision has been cut for the elderly. Local authorities are simply applying higher charges and increasing the eligibility criteria. In some cases, the report found that older people have had to pay up to £315 per week towards their domiciliary care costs.

Added to these cuts has been the relative reduction in the state pension. A report by Aon Consulting indicated that the UK now has the worst state pension provision, compared to 25 other European countries. On average, the state pension is equal to just 17% of average earnings, compared to an average of 57% in Europe. A report by Age Concern indicated that 2.2 million pensioners are living in poverty. This level of hardship reveals itself in figures that saw 23,200 more deaths in England and Wales in the winter of 2005-2006 amongst people over the age of 65, compared to levels in the non-winter period. Hypothermia, as a result of pensioners worried that they will be unable to pay their heating bills, and declining levels of support are all contributing causes.

Socialist Policies

It becomes a sick joke when Gordon Brown speaks of 10 years of economic growth under New Labour. Yes, the economy did amass additional wealth as human productivity grew around the globe, because new technology enhanced what humanity could do: but working people have not seen this wealth. Instead, a greater proportion of the national product has gone to the rich and wealthy.

The quality of life for working people in Britain is poorer, in terms or our wages and in terms of the social provision of services. The big things, such as health and education, are being cut, but so also are the small things, which are also important - time with families and friends, time and facilities for leisure, and a reasonable working week. This is all possible with the technology available and the wealth we have created. What is needed are socialist policies, not the madness of the market, where the few live lives of opulence, while the many are faced with the poverty of life.

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