Low pay linked to migrant workers influx

SHAUN LOWTHORPE The influx of migrant workers into the eastern region has helped to fuel growth while also pegging wage rates.A report by a right wing think tank, the Centre for Policy Studies, concluded that more people were working harder just to stand still and too many people were relying on rising house prices as the key to prosperity.

SHAUN LOWTHORPE

The influx of migrant workers into the eastern region has helped to fuel growth while also pegging wage rates.

A report by a right wing think tank, the Centre for Policy Studies, concluded that more people were working harder just to stand still and too many people were relying on rising house prices as the key to prosperity.

Its author Charlie Elphicke, a CPS researcher and London-based Conservative, said figures showed that in real terms wages had stagnated in the last five years - adding that regional quangos like the East of England Development Agency should be scrapped and the money saved handed back to taxpayers.

Those least well off were paying a higher share of tax yet receiving a lower share of benefits than they were a decade ago when Labour came to power, the report said.

“Growth has been driven by migration, not by people getting richer,” he said.

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“The actual growth we have seen has come mainly from more people being in employment, most being in the country.

“All the growth we are seeing is coming from Portuguese workers who are working on farms. It's not coming from people getting richer. I'm not saying migration isn't necessary. Sometimes it can be a very good thing.”

Labour Euro MP Richard Howitt, who has worked closely with businesses and trade unions on migrant worker issues, said that while he did not share the report's “politically driven” conclus-ions, there was evidence that migrant labour was having an effect on wage rates at the lower end of the scale.

“There is ample evidence that year-on-year growth is across the board,” he said. “Migrants certainly contribute to that but underlying growth is happening across the community.

“There is some evidence that at the lower end of the workforce where migrant workers have come in, it's having an effect on wage rates. Migrants are welcome and make a positive contribution and are needed but they shouldn't be used to under-mine either wage rates or terms and conditions.

“I have seen research that shows there is evidence it is beginning to happen and we should watch that. But the vast majority of employers are responsible and treat their workers fairly.”

The report, using figures from the Office of National Statistics, said that:

Average weekly gross income per household has grown by just £16 in real terms - rising from £600 in 2001/2 to £616 in 2005/6.

Real weekly disposable income has gone up just £9 per week in the same period

In the first five years of Labour rule, average earnings and disposable incomes both increased at a rate of 4.7pc but this has since dwindled to 0.5pc and 0.35pc a year.

The findings are likely to rekindle the recent row over chancellor Gordon Brown's 2p income tax “cut” plan and claims that middle income earners are gaining by squeezing the poorest.

“In the last five years earnings haven't increased in real terms,” Mr Elphicke said. “Household earnings have been flat and the gap between the richest and poorest is still growing.”

He said that there were significant disparities directly linked to the ability of areas to embrace change.

“People in Cambridge have done very well,” he said. “But those in Norwich and Bury St Edmunds have done very badly. Overall, the majority of people are no better off than they were five years ago.

“Cambridge is doing well because it is concentrating on the industries of the future. As a country, if we want to get rich we need to concentrate on those industries that are cutting edge.”

And he added: “The RDAs (regional development agenc-ies) are all a complete waste of money and should be axed, with the money given back to people so that they have a bit more choice in their lives.

“In the main, last year, wages fell. Everybody thinks that their house price has gone up so it's okay if wages haven't. But people need to be very careful about and how much they are borrowing as it's a paper profit.”