(Pictured above, the trio of Low Pay Commissioners representing workers, from left: Kate Bell, Yours Truly and Kay Carberry. Photocredit; Becky Wright)
One unheralded part of last month’s budget was an inflation-busting increase for Britain’s poorest paid workers – the National Minimum Wage (NMW) and the National Living Wage (NLW) increases of 4.3% and 4.9% respectively announced by the Chancellor will directly affect 3 million people. And when you think of how many people have pay scales that are based on differentials with the NMW/NLW rates, you can see that the effective ‘bite” (how much of the workforce are affected) is very significant indeed.
In making this announcement, Philip Hammond was following a long line of Chancellors before him, in accepting the recommendations of the Low Pay Commission or LPC. This is one of the few remaining statutory bodies that is constructed on a social partnership model. Of the nine commissioners, three represent workers, three employers and three are independent including two very august academics.
In the latest Unions 21 podcast, Becky Wright discusses just how the Commission works in practice, and why it has been able to deliver successive increases in the headline rate of the NMW and more recently NLW, year upon year. She is joined by the three “worker” Commissioners, Kate Bell, Kay Carberry, and yours truly.
The Commissioners are supported by a truly first-rate secretariat – frankly what they don’t know about labour market economics and low pay isn’t worth measuring. It is they who make sure we Commissioners have the evidence before us so that our recommendations are very well founded.
But the statistical information is only part of the evidence base – in the podcast, Kay and Kate describe the process of taking evidence from unions, employer federations, and expert bodies like the Bank of England. We also go out on the road for numerous site visits – my account of a trip to North Devon is here– to meet with workers and employers on their own turf. This is crucial for making sure that we remain connected with the very people we not only seek to serve, but for whom our recommendations have such impact.
Indeed, if you have something to say on low pay – either a piece of research, or a suggestion for people or places the Commission should talk to – then please do get in touch with the Commission secretariat.
The social partnership model is one that works. The negotiations – and that is exactly what they are – deliver a consensus on how far we can raise the pay rates without jeopardising employment. But, as Kate says in the podcast, this is a legal floor, not the limit of our aspirations.
All in all, this episode is one that lifts the lid on an important British institution, and how it is possible to intervene in the labour market without the disastrous consequences the nay-sayers and doom-mongers were prophesising when the Commission was established nearly 20 years ago. In that sense it is surely a great success story, but as you will hear on the podcast, there is plenty of work still to be done.
The current and uplifted NMW/NLW pay rates are here
The podcast can be accessed here