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Wages, Poverty and Pay Day Loans: the reality of austerity

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PhotoIt was encouraging to see so many trade union reps, voluntary organisations and community groups at St Mary's Centre in Middlesbrough on Friday 9th November. Clare Williams, Chair of the Public Services Sub-committee welcomed those attending including keynote speaker Dave Prentis, Unison General Secretary and regional MPs from the south of the region - Phil Wilson MP for Sedgefield; Tom Blenkinsop MP for Middlesbrough South & East Cleveland and Andy McDonald, Labour candidate for Middlesbrough (pictured with Dave Prentis on the right).

The conference had been arranged during Living Wage Week to look at what trade unions can do to tackle some of the key challenges faced in securing decent and fair wages for all workers and to discuss what can be done to prevent people becoming victims of pay day loans.

The chair welcomed the first speaker, Dave Prentis. Dave started his speech with some grim facts: Middlesbrough is the tenth poorest area of our country with household incomes the lowest in England and a three year waiting list for social housing. In the North East in 2011, 2,000 families were registered as homeless and 200,000 young people were living in poverty. Pay cuts and job losses in the public sector are destroying the lives of millions who depend on those services. 80% of public service workers money is spent in the local economy. 625 public service jobs go every single day under this government. We have the worst child poverty record of any government for a generation and inequality is greater now than it was in Victorian times. Our job as leaders, as trade unionists is to show our members what they are really worth. Unison is totally and utterly committed to campaigning for living wages for all our members - whoever, wherever they are. Working with the TUC and other trade unions we will fight against the imposition of regional pay and stand firm in the fight for fair pay and living wages for working people. (pictured L-R Iain Wright MP, Barry Coppinger, Tom Blenkinsop MP, Clare Williams, Andy McDonald, Phil Wilson MP and Kevin Rowan)

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The chair thanked Dave for his contribution and reminded the conference that Teesside has a very active Public Services Alliance Coalition which meets regularly at St Mary's Centre and she urged people to sign up and get involved. She then went on to introduce the first panel session: In-Work Poverty and Living Wages. Short presentations were received from:

Professor Rob MacDonald, Deputy Director, Social Futures Institute, Teesside University

Rob thanked the chair for her introduction and explained a little about the work he was involved in. His research centred around the Middlesbrough area, gathering information on life stories of people in the low pay, no pay cycle and finding out about the reality behind the myths. He had interviewed a number of people at various times and stages in their lives and had never met one person who did not want to work. He cited real life examples of families deep in poverty where people were holding down two or three extremely low paid jobs in an effort to stay out of the benefits system and provide an existence for their families. For these people, unemployment is not a lifestyle choice.

A copy of Rob's presentation is available here http://www.tuc.org.uk/tucfiles/450/TUC Poverty Low Pay conference - Rob MacDonald.ppt

Iain Wright, MP for Hartlepool

Iain posed the question ' how could it be that as the fifth largest economy on earth, one in five people are classed as low paid?'. Five million people are not earning a living wage yet top paid earners have seen a 30% increase. For people on low wages it is always about choice - whether it's to feed their family, themselves or put the heating on. Inequality is damaging to the economy, drags down competitiveness of a country, a region and the local area. We have to say no to regional pay across the board. Where living wages have been introduced employers are seeing higher productivity, lower sickness rates and better retention of staff, saving on recruitment costs. The Labour Party are firmly focussed on delivering a living wage for millions of people in the public and private sector and he looks forward to working with the TUC and trade unions on the campaign.

Julie Young, PCS

Julie as the final speaker in this session was able to give a practical example of how a living wage had been negotiated in of all places, the Royal Household which has a turnover of £20m! Evidence of low pay, bullying and intimidation was apparent and 90% of members employed by the Royal Household have English as a second language. To get around some of the barriers meetings were arranged away from place of employment, in the community and by telephone discussions. Within one year a wage increase was negotiated and within 18 months a living wage was achieved. More needs to be done to make a living wage a right under legislation.

During group discussion the issue of Procurement was raised as a major challenge. It was suggested that a clause be included in procurement tenders stating that if awarded a contract, companies must agree to pay employees a living wage.

Following a short break the conference resumed for the second panel: Financial Inclusion in the North East. Short presentations were received from:

Vic Mackay, Financial Inclusion and Capability North East

Vic started her presentation by explaining what financial inclusion is: 'ensuring individuals have access to appropriate financial products and services and the knowledge of how to use them, while managing their money well'. FINCAN is part of Movement for Change which aims to develop community organising within the Labour movement, bringing together local people to engage in campaigns which represent the authentic voice of local communities. The aim of FINCAN is to campaign, share best practice and expertise, influence policies, develop partnerships and act as an information hub for the region.

A copy of Vic's presentation is available here http://www.tuc.org.uk/tucfiles/451/FINCAN TUC (2).ppt. A copy of the FINCAN fact sheet is available here http://www.tuc.org.uk/tucfiles/453/FINCAN fact sheet.pdf

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Barry Coppinger, PCC Labour Candidate for Cleveland

There has been a huge increase in illegal loan sharking in the south of the region. The cumulative costs of the cuts in Middlesbrough are estimated at £150m and client debt in Middlesbrough has gone from £1.7m to £5.8m - an ideal environment for illegal loan sharks to prosper and flourish. Loan sharks are unlicensed traders and are illegal because all lenders must be licensed by the Office of Fair Trading (OFT) - loan sharks are not. They do not operate under government agreed standards for money collection and do not provide the required paperwork under law detailing the amount borrowed and the amount needed to repay. These people prey on the most vulnerable and are killing our society. If you have become a victim of a loan shark or know someone who has there is help available by contacting the Illegal Money Lending Team, funded by the Department for Business Innovation & Skills on 0300 555 2222 or www.direct.gov.uk/stoploansharks.

Elaine Gilmour, Pioneer Credit Union

Elaine explained the credit union is a not-for-profit financial co-operative run for members by members. The whole organisation is run by volunteers who give their time freely to provide this service for their community

Pioneer has a live/work common bond. This means that it is open to anyone who lives or works within the boundary of Middlesbrough. There are collection points on most estates, operating nine collections weekly. Its strength is encouraging members to save what they can. Its ethos is everyone is equal, everyone is welcome. She encouraged unions to promote the establishment of credit unions in workplaces throughout the region. Credit unions can provide much needed help to desperate people and a practical alternative to loan sharking. To contact the Pioneer Credit Union telephone 01642 866229. Further information is available on the website http://www.pioneercu.org.uk/home

During group discussions around the issue of financial inclusion two clear campaigning issues were identified;

To raise awareness and take up of credit unions in the workplace

To campaign for the removal of advertisements such as Bright House and Wonga

The chair thanked the speakers and contributors for participating in both panel discussions and welcomed our final speaker as part of the Kenny Bell Memorial Lecture:

Judith Kirton-Darling, Confederal Secretary of the ETUC

Judith (whose home town is Linthorpe) started by saying how the role of Europe and our involvement is absolutely critical to achieving peace and prosperity throughout Europe. There may be areas we are not happy with but recognise we have to enage at a European level for a peaceful continuum. Bringing together unions from 36 different European countries, and 12 sectoral federations, the European TUC represents different cultures, different labour markets, different sectors. There are 115 million people living at risk of poverty in the EU - one fifth of society. Inequality and poverty cannot be separated - one feeds the other.

We are facing the challenge of a generation to fight for and defend our basic rights and services. . It is essential we change the narrative and address core issues. We want to see a new European social compact based on:

A more sensible timetable for deficit reduction in Europe: public debt cannot be directly compared to private household debt (we only finished paying back WW2 debt in 2006)

Fair taxation - we need a fairer balance between spending reductions and tax rises

A proper strategy for job creation, which could be usefully linked to the transition needed to tackle climate change

A European Youth Guarantee - proper training and apprenticeship programmes; welfare-to-work schemes; fair labour market rules promoting quality job creation

Urgent solutions needed for the Eurozone

Perhaps more importantly, we need a more even distribution of wealth

The EU acting together is 30% of global GDP - strong enough to tackle the speculators and feral rich. Cooperation is the only way we can tackle poverty and end austerity in Europe.

Judith closed her presentation saying the alternative is to repeat our history - as Golden Dawn march through Athens with torches - this is not something she is willing to sit back and watch, adding from what she's heard about him, neither would Kenny Bell.

The above is an abbreviated version of Judith's speech. The complete text is available here http://www.tuc.org.uk/tucfiles/452/TUC austerity and poverty 9 11 2012 (2).docx.

The chair thanked Judith for her contribution echoing the sentiment that Kenny indeed would not have sat back and watched as the far right mobilised - and neither will we.

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