Higher wages are welcome, but workers should not think fortunes have changed

A young woman working in the ‘gig economy’, for Deliveroo, the takeaway food delivery company.
A young woman working in the ‘gig economy’, for Deliveroo, the takeaway food delivery company. Photograph: Keith Morris/Alamy

A prime minister who can say he is levelling up the regions and creating well-paid jobs has something to boast about. One who can achieve this in part by leaving the world’s largest trading bloc and restricting the free flow of labour into the UK, with the associated suppression of goods and capital travelling to and from the 27 EU countries, is a miracle worker.

Johnson claims he is about to engineer this outcome. Many in his party believe him. They say Brexit is not a hindrance to this brighter future, but a catalyst that will improve the working conditions and pay of those at the bottom end of the earnings tree. Even some on the left who opposed Brexit are allowing themselves to dream that leaving the EU has an upside for the working poor.

This narrative was devoid of evidence before the 2016 Brexit vote and that remains the case. It assigns causation to events and trends that have only a passing relationship with the UK’s low-wage culture.

The power of collective action remains hobbled by Margaret Thatcher’s destruction of trade union rights, achieved with the acquiescence of many disaffected union members. Studies have also shown that the plight of Britain’s non-professional and low-waged workers is closely linked to the dawn of the internet age 20 years ago, the increasing automation of tasks in factories and growth of technology in the office.

All developed countries were affected by the shift and all saw wages stagnate, not least in the US, where technology is deployed more widely on the shop floor and in the growing “gig economy” of flexible service industry jobs. The situation worsened after the 2008 global financial crash upended the economy and crushed the confidence of even the most skilled workers, who might have previously thought they could bargain up their wages. Too scared to move job for fear of losing employment rights accrued after years of service, workers balked at asking for a salary increase.

It is true that, over time, some industries went on to become dependent on migrant workers. However, research shows that in most cases migrants did not “steal” the jobs of British-born workers, but usually took on roles that were vacant or previously had not existed, whether in an architecture practice or serving coffee in a new cafe. In the period before the pandemic, wages stagnated in industries and regions where migration was low, even when unemployment was low.

This summer there have been reports of haulage firms raising lorry drivers’ pay and Amazon spending more workers to staff its warehouses strung along the M1, but these may be isolated examples. The Office for National Statistics says overall figures for wages are difficult to fathom at the moment, but it judges they are increasing by 3.5% on average, following a fall of about 1.5% in the year to June 2020.

Frances O’Grady, the leader of the trade union movement, speaking before this weekend’s TUC conference, dallied with the idea that workers were about to see their fortunes improve. However, she was rightly realistic about the task, saying: “I don’t want to be complacent about the job we have to do to strengthen workers’ bargaining power. There are no shortcuts.”

Trade union membership is inching higher, but only 2.5 million of the UK’s 27 million private sector workers belong to one. Private equity firms feel free to cut workers’ terms and conditions as they buy up businesses.

As a result, if prices do increase in the run-up to Christmas, it will be because Brexit hit trade with the EU and played a part in creating a shortage of goods, not because wages have spiralled. For pay to increase, businesses must accept a smaller share of their revenues as profit. That is not going to happen unless ministers help change a culture of exploitation that has dominated the private sector for too long.

It’s curtain-up for many, but theatres fear joy may turn to tragedy

Britain’s theatres are hoping for a post-pandemic comeback, with an astonishing number of new productions launching and the return of fan favourites, such as Cinderella, Frozen, Mamma Mia! and Hamilton.

The UK theatre industry has been hit harder than most. A version of the coronavirus insurance scheme that the film and TV industry started to take advantage of almost 18 months ago was extended to theatreland only last week, but this hasn’t stopped the owners of West End venues investing millions to woo back the crowds.

While theatres were allowed to open at 50% capacity in May, and social distancing rules were dropped in July, August’s “pingdemic” forced the closure of some productions and the postponement of many others, But now the West End is getting its mojo back.

By Christmas, well over two dozen big-name productions will have opened, from Harry Potter and The Cursed Child and Moulin Rouge to Wicked and The Book of Mormon. Such was the pent-up demand that one senior theatre executive described rapturous first-night crowds as akin to “the Rolling Stones or the Beatles coming back”.

But the recovery is far from certain. International tourism remains almost non-existent, and schedules have had to be reworked, with new Sunday shows to cater for larger domestic audiences, and some midweek matinees dropped.

And theatre owners remain angry, saying the government’s insurance scheme is too costly and not fit for purpose: it will pay out if a show is stopped for food poisoning, but not over any coronavirus interruption short of a government-mandated lockdown. For audiences it’s entertainment as usual: but behind the scenes, the story of theatreland’s recovery is far from over.

EasyJet can look forward to less turbulence from its founder

Battered by the pandemic and its associated travel restrictions, easyJet has gone cap-in-hand to its shareholders once again, hoping to raise another £1.2bn through a rights issue.

One man who definitely won’t be stumping up is the airline’s founder and biggest shareholder, Sir Stelios Haji-Ioannou, who said last year that he would not invest any more as long as the company continued to order planes from Airbus. Directors confirmed last week that in the next two years they will spend another £1.9bn on new A321 aircraft.

The rights issue will dilute the founder’s holding to just 15%: it is still likely to remain the biggest single stake, but will be far less influential than the 34% share of easyJet that Haji-Ioannou and family controlled until 2020, after a decade of acrimony and dispute, and a failed attempt to oust chief executive Johan Lundgren.

Despite the huge wealth Haji-Ioannou had tied up in the airline – and the fortunes generated annually by dividends and brand licensing – he had become ever more marginalised from his creation: railing furiously at the strategy but failing to win the backing of other investors in his attempts to oust the “scoundrels” from the board, while easyJet directors muttered politely in public about engaging with their key shareholders.

For most of the aviation industry, there have been precious few upsides to its worst-ever crisis. But should easyJet survive the turbulence, the pandemic might at least draw a dignified curtain over its bitter internal rows.

Covid has, to some extent, reined in easyJet’s fleet expansion, and two of Stelios’s targets on the board have left. Haji-Ioannou has this time apparently concurred that fresh equity is needed, and can cash in.

The Cypriot entrepreneur may never have quite hit the mark with his other orange “easy”-branded ventures. But once he casts less of a shadow, easyJet may appreciate his legacy more.


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