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This is all about profit




Back on 1 April 1999, Britain saw the introduction of the National Minimum Wage.  From then on all adults were to be paid at least £3.60 an hour and workers under the age of 22 no less than £3 an hour.  Doesn’t sound a lot right?

But at the election and following that time, the business federations, including the British Chambers of Commerce were up in arms.  They said that the introduction of a minimum wage would cost jobs.  They argued that most small businesses were paying well over the minimum wage anyway.  This was crap. 

At the time I worked for a company which was part of the FTSE 100.  We were employing people for as little as 96p per hour in some places.  Overnight, they saw their earnings rise nearly four fold.  We didn’t lay people off; we just took less profit as did our clients.  These people were already doing the work of two – how could you have any less?  The people who clean your offices, that wash your plates, that make your coffee, that clean your streets.  The people you don’t see.

I was also at that self-same organisation when the Working Time Directive was introduced, meaning for the very first time in their lives, some of these workers were entitled to paid annual leave.  The Tory party at that time and David Cameron were both against these pieces of legislation which they claimed would cost jobs.  David Cameron voted against the introduction of the National Minimum Wage. You can see a list of other Tories that did so here.

Why do I mention this?

Yesterday morning, I heard a representative from the British Chamber of Commerce on the radio talking about a survey of their members and touching on the Government’s proposed increase to the National Insurance rates.  Spookily reminiscent of David Cameron, he referred to it as a, “Tax on Jobs”.  The same old arguments are being rolled out that were rolled out 10 years ago despite unemployment falling to some of the lowest post war levels AFTER the introduction of the minimum wage.

Let’s be really clear.  These measures don’t cost jobs, they cost profits.  And that is what they are really complaining about.  Regardless of who wins the election there will be job losses – mainly in the Public Sector.  They won’t be caused by increases in National Insurance but the fact that government expenditure is exceeding income and the National Debt is growing.  In order to deal with that you either have to cut costs or raise taxes. 

Every time you hear the phrase “Tax on jobs”, remember this isn’t about protecting your employment, this isn’t about your rights, this isn’t about standing up for the ordinary person.  This is about protecting their own interests.

Tax on jobs? My arse. This is all about profit.

10 Comments leave one →
  1. 04/27/2010 09:58

    Hello HRD,

    What you say is true. Business will swallow the increase in the way that it has managed to accommodate WTD and national minimum wage. My issue with the NI increase is that as Brown decides now (aftter 13 years) to do something about he over spend in the public sector and cut “non essential” costs out he is then going to increase his NI cost on his own public sector payroll. Isn’t this a double cut in budget? As the NHS is Europes largest employer it will also be the biggest contributor of additional revenues from an already reduced budget. Jobs tax? – no. Public Sector tax? more accurate. Unfortunately our hospitals and schools have no customer to help carry the burden. Luckily the local authorities have those who pay council tax to cover the increase. Phew!

  2. 04/27/2010 10:35

    Too true. It really irritates me every time Cameron talks about a ‘tax on jobs’. He also in the next breath talks about Labour’s scaremongering and their leaflets but this to me is the biggest scaremongering of all. How on earth do the Tories plan on raising money other than by decimating workforces in the likes of Northern Ireland and the North East? Many won’t even notice the increase in NI contributions and even if they do, what would they rather – lose their job altogether or maybe pay a bit more tax?

    The Conservatives have not budgeted in their manifesto, just made lots of soundbytes without any substance. Power to the people my arse! I wouldn’t have the first clue about how to run my own school. It’s shambolic politics – involve the people to do the job you’re elected to do then blame then when it goes tits up. I really do hope the UK electorate can see through ‘Dave’ and his mottley crew of Old Etonians. They really are totally out of touch.

  3. 04/27/2010 11:49

    Amen brother, amen!
    Never have so many owed so little to such small minds courtesy of the ongoing phenomenon aka the “Peter principle”!
    Viva la revolution!

  4. 04/27/2010 14:21

    To be perfectly honest I’m fed up with the whole damn lot of them.

    It’s bull shit central – and as a (very) small business I know the truth that 1% on NI will make bugger all difference to any decision I make. But at the same time, as Jeremy points out – the places that will hurt the most are the places that the governing party are pretending to protect.

    But what pisses me off most about the Minimum Wage (and I will admit that I naively fell for the argument that it would cost jobs back in the day – oh how young and foolish I was!) is the fact that there are, as with so many things political, so many work arounds as to make it farcical. If having a minimum wage is something that is right for the country and the people who live here (and I happen to agree it is) then make it so. Don’t carry on as if you’re the great bloody redeemer with a socially just policy – and then allow companies to bus in migrant workers and pay them minimum wage whilst charging them 30% back for their “accommodation” that only costs you at best 10% of your wage bill.

    I feel I should probably say that I have no beef at all with the migrant workers – I’m ashamed that our Social Security System seems to have become more of a hammock than a safety net for those it originally sought to protect – but why can’t anyone just try telling it how it is?

    You know what – maybe that’s the biggest trick the Tories missed this time was telling the truth. Although perhaps they don’t know themselves anymore. Instead they reverted to type and went all Slogan-ese again, further demonstrating how out of touch they really are.

    We want honesty and integrity. This country deserves honesty and integrity. And if a hung parliament and Proportional Representation can bring us more of that and less of grandiose claims and hollow soundbites then I say bring it on. It can’t be any worse than what’s gone before – and I WILL NOT be scared into voting for one party or another.

    My vote is my patriotic duty – I hope you use yours too.

  5. Ministry of Truth permalink
    04/27/2010 14:53

    Excellent post HRD. It is amazing how many people still don’t get the minimum wage. Enforcement is a big issue to be dealt with.

  6. g-dog permalink
    04/28/2010 01:04

    Are you all SURE you are not living in the US??? As someone commented in the U of the S of the A (on NPR) – socialism for the corporations/rich & capitalism for the middle class/poor individual

  7. 04/29/2010 07:13

    @Jeremy Snell – Hi Jeremy and thanks for taking the time to comment. In honesty I fear for Public Sector jobs regardless of who wins the election. I think our colleagues in the Public Sector are in for a difficult few years.

    @Aloncalcia – As someone who lived in the North East after the last recession, the level of economic hardship was apparent everywhere. But then, it’s so far away from London….doesn’t really matter does it?

    @Ian Buckingham – Viva la revolution indeed! Who’s first against the wall?

    @Alex Hens – Brilliant comment Alex, brilliant!

    @The Ministry of Truth – Yep, as Alex points out above…if you want a minimum wage, make it so for everyone.

    @g-dog – Nope I’m still here……although never say never!

  8. 04/29/2010 07:35

    It certainly does matter. My own experience under the Tories included negative equity and redundancy, plus I seem to remember that the rate of inflation doubled within a year of them coming to power despite their promises of everything being better for everyone. What they did do well was destroy whole communities and encourage greed and selfishness. They also privatised everything that moved. I can think of nothing worse than a return to their values.


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