Can Britain Have a Payrise?

In Britain today, more than one in five people

are officially classed as low paid.

Nearly half of UK workers earn less than £20,000 a year.

Tonight, 100 people are asking, why our pay is so low,

who's to blame and will it change?

So, can Britain have a pay rise?

-Good evening. I'm James O'Brien.

-Hello, I'm Steph McGovern.

Tonight, we're asking, can Britain have a pay rise?

In our studio, we have 100 people,

who represent all pay levels in the country.

Clever technology will allow us to see their opinions

on four big questions.

Do we work hard enough? Are bosses paid too much?

Will the Living Wage lead to a pay rise for Britain?

And what will Brexit do to our wages?

Our 100 are seated based on how much they earn,

from the lowest paid, through all of the pay scales,

up to the highest paid

and they're represented by the people here.

Also tonight, we'll be finding out, will the Germans beat the Brits

in our productivity challenge?

-ALL:

-Three, two, one.

-WHISTLES BLOW

-Take it away!

We meet the Swedes who work a six-hour day.

Would that work here?

People get jealous when they hear about my salary

and the hours I work.

And we see how the Living Wage

has already affected businesses and workers.

I don't know how we're going to cope,

because the simple fact is - where do I get the money from?

Now, if you line everyone up in the country

based on the amount they earn per hour,

then pick the person slap-bang in the middle,

well, everyone earning a third less than that middle person

is classed as being on low pay.

And that is 22% of all of our workers.

That's more than five million of us.

It might not sound too bad,

but it is shocking if you think

France is 6% and in Sweden it's 3%.

And that 22% figure

has barely moved in the last 30 years.

Throughout the boom and bust years,

around one in five people in our population

have been stuck on low pay.

So, the first question we want to ask you

is whether we are low paid, because...

we're just not working hard enough?

Yes, so earlier, we asked our 100 to vote on this question.

And the results are in.

13% think we are low-paid,

because we don't work hard enough.

That is, of course, compared to 87% who disagree.

So, let's find out - are British workers to blame for low pay?

Is anyone prepared to put their hand up in public

and admit to having pressed that button?

Up here, here we go. We've got one. There's supposed to be 13.

Where are the other 12? Are they all hiding behind you, sir?

You know, I think it stems,

if you take the issue with employment in this country

and take it all the way back to education, that's where it starts.

And I don't think work ethics are taught at all

in our education system.

And people want hand-out after hand-out after hand-out.

They want it given to them.

They want the best working environment

for the most money that they can get.

And this isn't about what somebody earns per hour.

This is about the value that that person gives that business

-over their employment.

-Where are you getting the idea

everybody's looking for a free lunch?

No, I think the education system is to blame,

because people aren't being educated from a very early age,

in terms of work ethics.

I heard a "rubbish" over here. MURMURING

-Let's find her.

-Absolute rubbish!

Now, I work in a school as a teaching assistant.

I have a first class degree in English.

I have a Masters degree and I'm studying for a PhD. Right?

I grew up in a...from a...

a low-income family, had to leave home very, very early.

-It's not the Monty Python sketch about who's poorest.

-It's not...

-LAUGHTER

-You know?

And I work in a school on a council estate in Hull.

And do you know what? Those kids work really hard.

The problem is that they don't have access to the networks,

like people who go to Oxford and Cambridge and all that have.

-APPLAUSE

-They cannot...

There's no point shaking your head.

They do not have the access to that kind of network.

It's not always about WHAT you know, it's about WHO you know.

-MAN:

-I would agree with you.

I think there's a fundamental failing in

not what the teachers are teaching,

but what the Government is instructing those teachers to teach

and the access, therefore, that gets to market.

APPLAUSE Let's go to Jill Jones.

Jill, are the times changing?

Is it a different world that we live in now?

I think it is. When I was young, my mum...

it was definitely not unusual for my mum to have two or three jobs.

But most people,

certainly younger people, wouldn't do that.

-I mean, I had... When I was younger...

-What do they do instead?

-What do they do instead, Jill?

-I don't know.

-Play Xbox!

Sit and wait for it to come to them a lot of the time.

And I'm not generalising, I'm not saying everybody does it,

but there is a certain element of the population that will do it.

They will sit. They won't go and get cleaning jobs,

-putting their hands...

-There's youths queuing up behind you, Jill.

-APPLAUSE

-I'm sorry, but they won't!

You won't go and get cleaning jobs. You won't do menial tasks.

Well, this isn't about me. I run a social enterprise,

which works with 13 to 19-year-olds.

Going back to it's not what you know, it's who you know,

we set that up - it's called Network Young - to help them to get those

networks and meet those people to become inspired, because I think

people are generalising here. Some young people will wait

for everything to come to them and some will work as hard as they can.

Some people in this room will work hard to get what they need.

So there is a real split.

What if you're working as hard as you can

and yet you don't feel you're going anywhere?

Well, I think we just need to keep encouraging that work ethic

and showing how it does work. And I firmly believe that

the harder you work, the better off you'll be,

not only in pay, but in the rest of your life as well.

So, it is true that no matter how hard you work,

things will come back to you in the end.

Sean, you've done a bunch of jobs since you graduated, haven't you?

APPLAUSE Do you recognise...?

Do you recognise what he describes -

that, if you put in the hours, you put in the graft,

you will actually change your world, change your life,

you'll make massive advances?

Personally, no. No, I found it difficult to get to that point

where putting in the work will make a difference.

I've worked a lot of menial jobs -

telesales, retail, cold calls,

you know, that kind of thing?

And I never felt I was actually ever progressing in my life.

Is that because you weren't working hard enough?

-No.

-Don't shoot the messenger.

-I worked as hard as I could

in those jobs, but in that kind of employment,

there isn't room to advance.

-There's very little room.

-Tell him what he's doing wrong.

-Well, I...

I actually don't think that

what you think is a menial job is a menial job.

Sitting at a desk, answering the telephone,

is not the same as working in a busy restaurant kitchen,

up to your armpits in soapsuds and greasy water,

-or with your hand down a toilet.

-By all means, yeah.

-APPLAUSE

-By all means...

-Most young people don't want to do that.

-Yeah...

-Nobody wants to spend their day in toilet water.

-Nobody does, but if you want to eat,

you want food on the table, especially if you've got kids, you've got to.

-You can't tar everyone...!

-There are different...

No, exactly. You can't tar everyone with the same brush.

..this impression that young people won't do certain things,

young people will act in a certain way.

I work in the employability team at a university and everything

you said about education, that is starting to change.

We teach enterprise, we teach career skills and soft skills.

Some of those students, they are working as cleaners.

I worked as a cleaner whilst I was at university.

And we don't see enough of those people.

We've projected this image of the lazy millennials,

they go to universities, they'll only accept certain jobs,

they won't do certain things.

And that's just not borne out by most of our young people.

They are prepared to do those jobs

and they are working hard to get the new opportunities.

Charlie, in the front row, you're one of the biggest employers in the room.

Is there a difference between a British worker

and a non-British worker, or, indeed, between a millennial -

a young employee and a slightly older one?

The real issue we've got here - why some people are on low wages -

is, unfortunately, they've not been given the opportunity

to get a skilled job.

If you've learnt a skill or an apprenticeship,

you're going to go on and earn lots of money.

But, unfortunately, from school level,

they're sending them to university -

waste of time for a lot of them - and, therefore, unfortunately,

as this lady said, you know, you wind up with a cleaning job...

Is that what Sean did wrong? He's get a degree in media management.

-Was that a mistake?

-He should have done an apprenticeship. Not necessarily his fault.

We're guiding too many people to university,

rather than into real jobs.

And, you know, if you've got a skill,

you're going to earn loads of money and never be out of work.

APPLAUSE You're in the plumbing business.

-That's correct.

-Off the top of your head, apart from the classic trades,

what other skills are there that people could train to do?

Accountancy, HR, PR...

Anything that warrants a qualification at the end of it

should mean that you get a good living wage, you know,

not a minimum wage, but an actual living wage.

No matter how hard people work,

even if you accept this idea that meritocracy works,

we will always need care workers, we will always need cleaners.

Anybody who believes that people earn low money because they're lazy

should talk to a care worker.

APPLAUSE

They are some of the hardest working people you'll ever meet!

There is no progression in that job.

But, even if there were, we would still need people to do it.

Increasingly, in an ageing society,

we need to look after our most vulnerable.

So why are they amongst the lowest paid in our society?

Where I live, the majority of kids are growing up in poverty.

Most of those kids growing up in poverty live in a household

where at least one of their parents is working

and those are the types of job they're doing -

care work, cleaners - really difficult jobs.

The idea that work lifts people out of poverty is nonsense.

It SHOULD lift people out of poverty, but it doesn't.

APPLAUSE

I know what we've done.

We've lit the blue touchpaper.

The firework is still fizzing, but we have to move along now.

That is what our audience thinks about the first question tonight.

Let's do a little myth-busting. I think we might need it.

What is the reality here?

Are we working hard enough?

Steph went to Sweden, a country with just 3% of its population

on low pay, to find out what they're doing differently.

Welcome to Sweden...

..one of the biggest exporters of pop music in the world.

People here recycle 99% of all of their waste.

And they love their meatballs, too,

exporting over a billion every year.

But I'm not here for any of that.

I've come to Stockholm to compare how Britain and Sweden work

and to see if it can help us understand

why so many more people in the UK are on low pay.

Firstly, how do our working hours compare?

Well, where better place to start

than asking Swedish workers themselves?

The normal working hours are eight hours.

But we have one-hour lunch, between 12 and 1.

And then we have a coffee break, like, for 15 minutes or so -

one at ten o'clock and one at three o'clock.

People get jealous when they hear about my salary

and the hours I work.

I worked in London before and I can see the difference

between over there and here,

because there were people usually having lunch at their desks.

And the stats back that up.

Here, fewer people do 40 hours or more a week

than British workers.

And fewer work weekends,

so it means there's more time to relax and watch the world go by.

In the UK, well, this would be to-go, wouldn't it?

Yes, despite cliches of lazy British workers,

those that work full-time

do some of the longest hours of any country in Europe,

averaging around 43 hours each week.

And more than one in ten Brits regularly work over 50 hours a week,

compared to just 1/100 Swedes.

Let's pop back to the UK to meet James Watt, co-founder of one of

Britain's fastest-growing drinks companies, Brewdog.

He and a friend started it from scratch in Aberdeen.

We slept on sacks of malt on the floor,

we worked 20-hour days every single day.

We bought all the beer, we sold the beer,

we did the accounts, we made the beer.

It was insanely tough, but we loved every second of it.

And it's a work ethic he expects his staff to follow.

Everyone is always on the go and always delivering

as much as they can.

And nobody just really rests on their laurels.

It's not something that we ever would accept, as a company.

I think British people actually feel a bit guilty about taking time off.

I think that's kind of our national curse.

My boyfriend recently said to me that my work-life balance

is as bad as my actual balance, which is pretty bad.

But Brewdog is no exception,

if recent research is anything to go by.

Nearly 40% of British workers surveyed said

they face tight deadlines on an almost continuous basis.

And over a quarter of Britons say

they don't take any breaks at all.

Back in Sweden, the way they do things might just make you question

whether all that hard graft is worth it.

Some companies are actually reducing their office hours.

I'm on my way to meet Magnus.

He runs a software company here in Stockholm

and employs his staff on a six-hour day.

'Despite the short hours, they are growing fast.

'They've nearly doubled their revenue in the past year.'

Our article-producing department, which is rather easy to compare,

they write an average one article more per day

than similar companies.

And they do it in two hours shorter.

And if you're thinking a six-hour day means lower pay, you'd be wrong.

Magnus pays workers the same rate

as his competitors, who have longer working days.

His staff, like Tommy here, can't believe their luck.

The first day was really...it was kind of confusing.

I mean, I came from being used to working eight hours a day.

And then, when we got to four o'clock,

and I was supposed to leave, it was unreal.

I felt guilty.

I'm way more productive and deliver better results now

than I've done ever before.

And that means by five o'clock,

the school run is done and Tommy's back home with his family.

THEY TALK

'I think the main difference is'

that he's a lot happier!

As a husband and as a parent.

I think that's basically the biggest benefit from this.

Not all Swedes are on a six-hour day,

but, on top of a lunch break,

the twice daily coffee and cake break, known as fika,

is strictly observed in many workplaces.

So, what has the comparison

between British and Swedish workers shown us?

Well, on average, Brits work longer hours,

in fact, some of the longest in Europe.

And during this time, we work more intensely.

So, here's the puzzle.

Why do we still have so many people who are on low pay?

And if it isn't about the number of hours they work,

then, what is it about?

Time for my fika break.

Thank you.

Now, let's talk bosses. What do you think about them?

How they manage people, how they invest and how much they're paid.

So, earlier, we asked...

Our 100 have voted.

And 61% of them think it's the bosses' fault,

compared to 39% who don't.

So, are we getting paid so little,

because bosses are getting paid so much? You, sir.

I'm an entrepreneur. I've set up and run two or three companies.

I've worked my arse off and not been paid, excuse my language,

my arse off to not...

to provide for others before I got a penny out of my company.

and every single person in my business always gets a pay rise

every three months, if they're valuable to me.

You are not there to be paid for the hour you work.

You are there to give me a deliverable, so that I can expand

the company and employ more people and pay more taxes.

You are there because you are valuable to me,

not because you're paid for the hour.

If you bring more value to the hour, you get paid more.

It's as simple as that.

APPLAUSE How do you measure value? This lady asks.

It's things like if we've got a deadline for a product or client

and somebody goes home dead on 5:30, but somebody's going to sit there

till eight o'clock and get it delivered for me,

they are far more valuable to me as a company

than somebody, who bang on 5:30, is walking out the door,

-like a procession of...

-Do you not think people will...

APPLAUSE

Do you not think people will be more productive,

if they can respect you as, you know, to match their wage -

you're not earning a ridiculous amount,

-while they're earning nothing.

-But where's the risk for reward?

I've put all the risk in to provide your employment

and you don't know half of the rubbish we have to go through

in order to get you in to the door.

..the time and work, for lower pay.

In order to meet... Where is the reward for the risk?

Am I doing something wrong?

Because I work, I've got two jobs, and I work very hard.

I'm sure you work hard as well.

-ALL TALK AT ONCE

-I think if you work intelligently,

so you understand the fact that, if you plough on at something

that isn't earning you something,

perhaps it's not the right thing to be doing.

I had to change industry three or four times before I understood

which industry is going to earn the money, so I can employ people

-and pay more taxes.

-ALL TALK AT ONCE

I'm 40 years old, I've had many jobs and I've tried all kinds of things.

I've got a degree in arts management as well.

I've been to university and I've worked hard.

The suggestion is that you're not working intelligently.

Definitely, that's not true. That is just...

That is...completely...

OK, gentleman here again.

People will be - back to my previous point -

people will be more motivated to "work intelligently", as you say,

if they feel more of a...

-Involvement?

-More involvement. And more that you're involved

and you're down on their level

and you're not earning a ridiculous amount,

-while they're slaving away and...

-That's exactly what he said.

He said that the way he pays his staff

is by the value that they bring to his company.

-Now, if I was to work for you...

-One at a time.

..I would rather know that my pay is based on

this is what I deliver to the company,

this is what the company sets out to do.

You're part of a team, and you're rewarded for what you put in,

rather than him saying, "OK, this tier gets paid X amount,

-"this tier gets paid Y amount."

-Exactly.

And, absolutely, he is the man who's put the risk in,

-and he's built up that culture.

-You are part of a team...

-Mm.

He should be rewarded at the top of the scale.

APPLAUSE

In terms of bosses' earnings,

I think we need to draw some clear blue water between an entrepreneur,

who starts a company, risks their own money

and puts in their own hours,

and a bunch of executives in large corporates,

who are drawing down exactly this kind of money

for sitting in an office doing naff all.

APPLAUSE

How do you make that distinction?

And what do you do to the bosses who you describe in such poetic terms?

Well, one of the ideas that's been put forward is to link the pay

of the very top with the pay of the very lowest paid in the company.

APPLAUSE So, the differential.

You shouldn't be able to earn 30 times more

-than what the lowest paid person earns.

-Yes.

And then everybody's productivity is being rewarded.

Lawrence Jones.

I think it's important, as a business owner,

that we don't all get tarred with the same brush.

-We've created...

-APPLAUSE

Briefly, Lawrence, what brush you think you have been tarred with

by some of the other businesspeople in the audience?

I think... I wouldn't want my team working

an extra couple of hours a day for nothing.

-And I wouldn't...

-To prove that they deserve...

-Yeah.

-And we've given a pay rise of 5% for over 10 years

to everybody within the business.

We've also... If you work for UKFast for more than ten years,

you'll get a £10,000 tax-paid bonus

that we give away at the Christmas party

and there's nothing more motivating and emotional for me to be able

to give that out at a Christmas party.

If you get married, we'll give you the week off.

And if you can't afford the week off, cos we know how difficult it is

with the pressure, we'll pay you that money instead.

So, you consciously take home less money,

-in order to ensure that your workers...?

-I take more than enough.

Probably too much, you know, but, at the same time, I would never...

I'm in a situation where I've set the business up with my wife, Gail,

17 years ago and it was tough. Those first couple of years,

there were... I'm not proud to say, but there were times

when I ate porridge and Weetabix for a whole month.

But I'm in a very, very lucky position now

and I'm under no illusions.

I'm in the position I'm in,

because I've got the most amazing, motivated workforce.

And that's typical of a small business owner.

APPLAUSE

Before we move on, a quick show of hands.

Who's ever had a boss like Lawrence?

No, I didn't ask if you were a boss.

I said, who's ever had...? It's about 4 people out of 100

who've had a boss... Five, I didn't see you there.

I do believe that one day, we will all be like that.

Well, don't hold your breath.

Well, I'm not going to give up.

No, quite right, too. Bosses' pay clearly a divisive issue but how our

bosses manage us also has a big impact on our pay.

Steph's been looking at what our productivity means for our wages.

Welcome to the global race, where the world's most advanced

economies are battling to be the fastest,

leanest and most efficient.

The rules of the race are simple.

The country where the workers produce the most per hour

is the most productive.

And this is where the UK is falling behind.

We produce 10% less than Italian workers and around a third less

per hour than workers in Germany and the US.

Or in other words, the average worker there could stop working in

September and still produce the same as a UK worker manages all year.

So why are we doing so badly, because we know we work long,

hard hours and we have the largest workforce in our history.

Well, to help me explain, I've set up a little challenge,

with some ridiculously complicated flatpack furniture and a race

against the clock.

Team one - our Germans, who, as you can, see chose to dress up

for the occasion.

Team two are a group of British workers selected at random.

To be crowned the most productive, the winning team must build this

bedroom in the shortest amount of time.

But what they don't know is that this task is rigged.

The British team will have to cope with some of the UK's main

productivity challenges, whereas the Germans, well,

they'll be able to utilise their world-leading efficiency.

Before our British team has even started,

they're already at a disadvantage and that's all down to education.

Richard here might have A-levels in maths, physics and economics,

but the Germans benefit from the country's emphasis on vocational

practical training.

They're all qualified carpenters,

whose company, Baufritz built all of this in just one day.

So the Germans have studied the instructions beforehand...

Hello, team.

..the Brits have to work it all out as they go along.

I've got your tools for you, so they are from a well-known pound shop.

Three, two, one.

Take it away!

So the Brits have to make do with their pound-shop purchases.

The Germans, however, get the latest power tools.

So why have we given them the advantage?

Well, it's to illustrate the UK's lack of investment.

Things like machinery, technology and innovation.

Britain's spending track record has been significantly behind

many European countries for nearly 50 years.

-How's it going, Michelle?

-A bit hard, actually.

This is where we could do with having a power tool.

I think we'll leave the Brits to struggle on there with those tools

but just how much of a difference can investing in the right

technology have on productivity?

The Airbus factory here in Broughton, North Wales,

produces wings for some of the world's most popular aircraft.

Over the last 15 years,

they've invested £2 billion at this site alone.

Approximately 20 years ago,

we were producing round about 100 wing sets whereas this year,

we'll be producing over 600 wing sets.

We've invested in the production system.

We've also invested in a Beluga line station,

which means we can actually ship and fly out more of our wings to our

customers on the Continent.

Back to our flatpack race and the Germans are already way ahead.

And that's down to good management.

Look at the speed of this.

The efficiency of these guys is amazing, isn't it?

On the British team, checkout supervisor Sue

is losing her patience.

Forget that. Let's get on to something else.

In fact, good management is deemed so important by some economists,

that they reckon if we could improve this in the UK,

then we could reduce that productivity gap with Germany

by a third.

So what can British companies learn from foreign managers?

Well, two years ago, hi-tech manufacturer PP Electrical

here in Walsall were at the top of their game,

so what do you do when you're the best?

-Hello.

-Take on the Germans, of course.

We suddenly found out that we weren't quite as good

as we thought we were.

In fact, we found there was a 20% difference in productivity between

ourselves and our German competitors.

Tony copied US and Japanese techniques and turned to the people

that know the business the best - his staff.

By taking suggestions from his work force,

he nearly doubled productivity in just two years,

rewarding good ideas with one of these badges.

Every time a new badge comes out, it's kind of,

who can get one the quickest?

Our flatpackers are reaching the end of their task.

But there's one last challenge the Brits have to overcome -

UK infrastructure.

We've rigged things so that both teams are missing a key part.

Unsurprisingly, on the German team,

Alex realises there's a piece missing first.

So he gets on the phone.

-Hello.

-Hello, Alex here.

We are missing a part of the cupboard.

Germany beats UK hands-down when it comes to road and rail

infrastructure, so I can deliver the part instantly.

White rail missing.

-Hi, hello.

-Hello.

We have a slight problem.

No, I can't hear you very well.

The UK's poor mobile reception gets them off to a shaky start.

We have a set of a chest of drawers with some parts missing.

I wondered if we could arrange to get those brought or sorted out?

Oh, it's going to take a while.

Oh.

And our potholed roads also slow things down,

which all amounts to some bad news for the Brits.

I don't think I'm going to be able to get it to you

-for a couple of days.

-How frustrating.

Clearly, our Brits are losing the will to live but how does this all

affect our pay?

Research shows that when productivity goes up,

then pay often does too.

So if we can reduce that productivity gap,

with countries like Germany and the US, well,

then we could see a boost to pay packets.

Final results time.

The Germans completed this all in an impressive one hour 30.

Things weren't so cheerful on the British team.

They didn't come close to finishing.

We're not on an even playing field, are we?

Sue's right. They weren't on a level playing field.

Poor investment, management,

education and infrastructure held our team back,

challenges all UK workers have to face.

Now the woman in the middle of tonight's audience represents the

median wage in Britain.

And that's you, Debbie Lewis.

You earn just above the national median of £22,500.

Did you realise or even suspect that you are smack in the middle of

-British wage earners?

-No, not all.

I'm quite surprised by that.

Why, because you thought you were rolling in it,

or you thought that you were on struggle street?

I thought I was probably closer to struggle street.

Purely because, being in southern England and a single parent,

I would've expected the average salary to be a lot higher than that.

Do you feel better now that you know you're at the midpoint?

Not particularly.

So everyone seated on this side of Debbie is earning less than her,

like 50% of the working population.

Everyone on the other side of her, are earning more.

They are in the top half of UK pay.

So let's split this up.

If you earn £34,400 or more, you're in the top 25% of British earners.

At the other end, at 13,600 or lower,

that puts you in the bottom 25%.

So we've looked at bosses and we've looked at workers but there are a

few more factors we need to consider.

-Aren't there, Steph?

-Yes.

One thing we haven't talked about so far is the 2008 financial crash.

Now, given everything happening in the political world at the moment,

the economic troubles of eight years ago might feel like a distant

memory, but they are still affecting our pay packet.

Let's get up another graph.

Now, this time we are looking at how our average weekly pay has changed,

so you can see from this, up until the crash there was a steady rise,

adjusted for inflation.

Then after the crash, it started heading south.

Now, recently it's picked up again, growing by around 2% in the last

year, but this is pretty slow recovery.

Even though our pay has been going up a bit,

when you take into account the cost of living, inflation,

in real terms we are earning £1,000 a year on average less than before

the crash, so where would we have been if it hadn't happened?

Well, according to one economic analysis,

we are earning on average around 18% less than we would have been if we

hadn't had the crash.

And this is one of the main reasons why many of us still feel poorer

than we were. So, let's take our woman in the middle, Debbie.

Now, if the crash hadn't have happened,

experts say that Debbie would be earning more than £27,000

a year by now. But the other side of this story is jobs.

Now, unemployment did rise after the crash,

but then it fell faster than most predictions,

and now we are back where we were in 2005.

But many of those jobs created at this time were paid lower,

part-time, zero hours or freelance positions,

so lots of workers were under employed, not getting as many hours,

so, essentially, earning less.

The other thing to consider is that in the UK,

some of the most successful industries are areas like

hospitality, retail and the care professions.

And these are all ones that rely on a lot of relatively unskilled

labour, which means cheap, low paid workers.

Thanks, Steph. So, now that we know some of the main reasons for the

state of pay in the UK, what about the future?

In the second half of our show,

we want to see if Britain can really have a pay rise.

There are two major political changes that are likely to have an

effect on our pay.

In a moment, we'll be talking about the impact of Brexit,

but first, the national living wage.

Steph's been to meet two businesses in Manchester who've already

seen changes.

Two bosses, two of their workers.

Two very different views on the living wage.

Fiona runs a cleaning and maintenance company in Manchester.

James has worked there for two years.

Now, she increased her staff's pay above the rate of the mandatory

living wage earlier in the year.

What we wanted to do is reward our staff that we've already got

and make it a great place to work.

It does cost you more money as a business, though.

How are you paying for it?

Well, it is a cost, but we've seen fewer people leave.

When you lose people as a business, there is a cost involved in the

advertising, the sifting through the CVs, the doing the interviews.

That is a big time commitment which takes quite a lot of money.

James cleans the drains of office buildings.

He's seen a real difference to his life since he received his pay rise.

So, James, what's this pay rise meant for you?

It's meant, like, when I got paid last month,

at the end of the month I've had money left over.

So have you had times, then,

in the past where you've struggled with money?

Yeah. I have. Obviously kids are expensive and once I've paid all my

bills, I'm usually left with hardly anything, you know,

to live on myself. Now I don't have to worry about my money.

I want to move house, and that, so now I can start saving up,

so I've got that extra bit of money, I can start saving that to the side.

Have you seen a change, then, in your staff?

Yeah, absolutely. People are a lot more engaged.

They seem really happy to be at work.

Absolutely, there's been an increase in productivity.

The UK first implemented a mandatory minimum wage in 1999.

I'm telling you tonight that a minimum wage there will be under

this Labour government.

This rate did rise every year, but since 2001,

living wage campaigners have argued that the minimum wage

simply isn't enough.

And in April this year, we saw the biggest change in UK pay law in

over a decade when George Osborne introduced the mandatory

national living wage.

I am today introducing a new national living wage.

We will set it to reach £9 an hour by 2020.

The announcement was met with a mixed reaction from business owners.

For some, like Sunil Sood,

it means cutbacks to staffing at his chain of shops in Manchester.

Tell us a bit about how the rise in wages has impacted your business.

We've had to cut back hours, because the reality is business is very,

very tough, so we've had to cut hours from the staff.

We just haven't got the luxury of having extra cash flow or extra

money to offer to employees.

So what you've got is staff earning more per hour,

but they're not doing as many hours.

Not as many hours. Absolutely, yes.

And his employees have definitely felt this added pressure

on the business.

Zoe, have you noticed things changing in here since the minimum

-wage has gone up?

-Yeah, it's a bit difficult in the workplace,

as there is not enough staff.

It's harder work, really. More stressful.

We don't really get a break, a proper break at the moment,

as we have to come off our break to serve the customers.

What does it mean in the long term for you, then?

-Is this sustainable, the way you're working now?

-It's not.

I don't know how we can cope.

When the £9 wage increase, wage rate comes in. The idea is fantastic.

I would love my staff to be happy and get paid more,

but where do we get the money from?

Since the introduction of the national living wage,

many big businesses have also cut benefits like extra weekend and

Bank Holiday pay, but will they get used to these increases eventually,

or will continued compulsory pay rises be too much pressure

on some British businesses?

Time now for our third vote. Now, earlier we asked...

Here's the results. 42% think it will. 58% disagree.

So, a majority in this room tonight don't think that a national living

wage will lead to a pay increase for the average British worker.

Sunil, I saw you in that film.

You were wonderful. Especially in the close-ups.

You like the idea of the national living wage,

but clearly it hasn't had quite the impact that George Osborne

-was hoping for.

-No, it hasn't.

I mean, for me it's been quite shattering, actually.

It's a nerve-racking experience.

Minimum wage is a wonderful idea.

I'm happy to give my staff wage rises,

but where does the money come from?

Lawrence, what was your line about bosses who say they can't afford to

pay their staff the national living wage?

Something to do with their cars, wasn't it?

Well, I would immediately ask, you know, about your lifestyle,

-you know...

-Well...

-You know, I may be unfair.

No, that's fine, but...

In fact, what I have done is actually I have sat down with each

of my places, each of my shops, and I have come in with my bank account,

with my business accounts, and shown the staff, "This is where we are.

"Where do I get the wage rises from?"

-Because there has been...

-Maybe they should work intelligently,

rather than harder. That's the turn up there, sir.

Intelligently, if you mean that we should look at maybe automation.

That will have its own costs.

You know, are we talking about IT?

Are we talking about bringing out automatic self-service checkouts?

I mean, that is absolutely against the ethos of my business.

I'm a neighbourhood store.

I have shops which rely on giving personal service to my customers who

we see day in, day out, regular people.

So, if I am becoming automatic, if I lose staff there,

I'm like any other.

You, surprisingly, you've felt what Sunil's just described

from the other end of the working ladder.

You were a worker in a food factory and the national

living wage has changed your life,

not necessarily in the way that George Osborne intended.

No. My life has changed because of the living wage.

It came in January and the new proposal and everything,

contract came. They put the tea break into the wages

and they consolidated into our wages.

And not only that, they cut the weekend allowance.

They cut the night premium.

Everything is gone. So the living wage has shattered us.

So much worse off?

Yeah, much worse off than the year before.

And what happened was I stood up against it.

I joined the union.

I organised the people, 50% of people who joined in the union.

There is another reason, because I was a voice of the union.

I was an activist.

They can't manage me. They dismissed me from work.

And the union has done a fantastic job for me.

-No.

-Unions just disrupt business. Waste of time. Honestly.

-Waste of time.

-No, no.

They gave us everything good that we have in this country.

Charlie, before you were talking about what you do for your workers,

but we can't rely on all our bosses to be good to us.

We have to be able to hold them to account and this is the only way,

historically, we've ever been able to do it.

Ending child labour, getting in pensions,

by working people collectivising.

We've got to be able to hold our bosses to account and that is the

only way he's been able to challenge his.

You have over there, and well done on your success.

-Hold that thought.

-Just to bring the debate back to the actual question.

Oh, OK, he's after my job.

When the national living wage was actually debated and introduced,

Sir Justin King of Sainsbury's fame said that it's actually going to

destroy jobs.

The Office Of Budget Responsibility have said that by 2020,

the national living wage is actually going to reduce the amount of jobs

in the country by 60,000.

You know, again, when it was introduced,

manufacturers and retailers across the country said we're going to have

to do one of two things - raise prices or automate.

Raising prices isn't going to please anyone and automation's going to

result in one thing and that's redundancies.

-Look at the supermarkets.

-Didn't we hear all the same arguments when

they brought in the original minimum wage?

The last time I checked the world was still turning.

Yeah, but you've got to bear in mind that that's...

It was £3.60 at the time, do you know what I mean?

It's gone up. Above inflation, hasn't it, really?

Basically the same arguments, about automation, about increasing prices.

It's happening. Look at the supermarkets.

The automation is here, James. Look at the B&Q.

Lines of automated tills where there used to be people.

Supermarkets the same. People are losing their job because of this.

-But more than that...

-Whoa, whoa, whoa, whoa.

What is the thrust of your argument,

that if we can't pay people a pittance,

we're going to replace them with robots?

James, we're not talking about pittance.

We're talking about £7.20 an hour. That's not a pittance, first of all.

Only last week I undertook consultation in a small family

business because of the national living wage,

because of enhancements that the employer tried to give,

like extra pay at weekends, double-pay at Bank Holiday.

The end result now is,

I have to consult on the employer's behalf about

-redundancies.

-I think we need...

-Hang on, Sunil.

You were in the film and you've had your say.

I want to hear some other voices.

I was a business owner, and in 2002 I had a gastro pub,

and I used to pay my staff over £8 an hour.

And I ended up having my business for five-and-a-half years and I

didn't lose any staff.

And their investment in my business was fantastic.

The issue I have is that it's not a living wage, that rate,

because otherwise why would people be getting

working tax credits? It's not...

It's not... And the point is...

We really need to be...

And we really need to recognise...

I also used to lecture many years ago, and I turned round to my

students and said, "Don't work hard, work smart."

And working smart, people want to work, they want to work,

they want to feel valued and they want to feel as if they...

No, hang on. They want... No, you can't. Please let me finish.

We represent small to medium-sized businesses...

You're not letting me finish my point.

Employees repeatedly say...

And that just demonstrates that you are being arrogant.

I am talking about the fact people want to work.

They want to feel a value...

-No.

-..and a purpose to their life.

They do. And they want to give investment...

Yes, they do. And, actually, I know for a fact...

I just want to explore the people who don't want to work.

All of my staff stayed in my business and

they propelled my business to grow.

-Because they felt that you were looking after them.

-Massively, yes.

Why don't people want to work?

Because they say, "I don't want to work more hours,

"because I'll lose my credits."

-The system that is partly to blame.

-Any evidence for that?

We've got clients who tell us that every day.

Time for me to put oil upon these very choppy waters. Steph.

Now for our final question of the show.

What will our vote to leave the European Union do to our pay?

We asked...

Results in... Just 21% think Brexit will result in a pay rise.

79% think it won't.

Well, that's our audience's view.

Steph's been looking at what might happen to our pay as we negotiate

our exit from the European Union.

On 24th June, the UK woke up to one of the biggest political,

social and economic shake ups in most people's lifetimes.

The British people have spoken and the answer is we are out.

The people have spoken. They just wanted a change.

Friday morning, I was shocked, stunned and then scared.

How and when we leave the EU is still undecided and there are loads

of unanswered questions about things such as trade and immigration,

but I bet you'd love to know whether it means we are more or less likely

to get a pay cut or a pay rise.

I've tracked down two experts

who have very different views on the matter.

One believes we'll be getting a pay rise.

The other, a pay cut.

Firstly, what do they believe will happen if we

leave the single market?

Britain does not have to be in the single market to be able to sell

into the single market.

The real issue here is about the ability to compete globally.

We need to focus more and more on quality.

Increased innovation, infrastructure spending,

investment, will allow the UK economy to do well outside the

single market and wages will continue to rise in the future.

There is a lot up in the air right now,

but if we do leave the single market, we will have to re-negotiate

a lot of our trade deals and that will cause uncertainty,

at least in the short to medium term, for businesses,

so less investment, less hiring and that will affect young people.

What we are looking at, with less trade there is lower productivity

and therefore lower wages.

Next up, many of the employment laws that affect our pay packet

originated from the EU, so things like a minimum amount

of paid annual leave and equal rights for part-time workers.

Will we lose these?

Workers' rights are vital for a successful economy.

Within the European Union, workers' rights were set by bureaucrats in

Brussels and were there to suit 28 countries.

Outside the European Union, Britain will not only keep existing

workers' rights, but more importantly, it will be up to

parliament in the future and the British people to have

workers' rights that are best suited to the UK economy.

So many of our workers' rights are currently tied to the EU and in

coming out of the EU, we will have to rewrite and replace those.

We have to start from scratch and there's no guarantee that any of the

progress on maternity pay, paternity pay, holiday pay, for instance,

will be retained.

It could also be that we go for lower workers' rights

in a race to the bottom to compete with other countries.

That is an equivalent to a cut in your wages.

The other big question is whether there will be still be freedom of

movement. If there isn't, what do our experts think

that will do to pay?

Unlimited migration, the free movement of people,

didn't really push unskilled wages down,

but it certainly prevented them from rising.

With a points-based migration system,

we can actually set migration policy to best suit the UK economy.

It will allow those at the bottom on the unskilled wages to benefit the

most and, indeed, allow wages to increase in the future

in line with productivity.

There is no guarantee that less immigration will mean better wages.

Immigrants obviously come,

they spend in the economy and that in turn creates jobs.

And also with less skills in the economy for businesses to draw on,

we'll have lower productivity and that will not be good for businesses

and that will not be good for wages.

We've already seen some impact of Brexit on stock markets

and the value of the pound, but as for our pay,

well, the jury's out.

Crystal ball time. Will leaving the EU have an affect upon our pay

packets? Difficult to find specialists as you could tell from

our film who are convinced that we're not going to sacrifice

any rights.

Kevin, you work in this field.

You're more optimistic perhaps than some of the other experts.

I am. I don't think that employment rights generally are going to be

affected by Brexit whatsoever, to be honest.

Firstly, it would be political suicide.

As to whether it would result in a pay rise,

it's difficult to say at this point whether the referendum vote itself

will result in immediate pay rise.

Obviously we've got political turmoil and it's very much going to

have to fall down to the negotiations that take place and

whether we have the free market access or whether we take the

Swedish or the Norwegian model.

I'm surprised at your confidence given the turmoil that you've just

-described.

-Turmoil in terms of we're not sure what's going to happen

in negotiation but in terms of economy, the economy I don't think

-has had that big a hit from Brexit.

-What?

I don't think we're going to have a reduction in wages and...

I don't think we're going to have a reduction in wages and I think

-rights are going to be protected.

-I'm going to come to Nia.

I'm going to come to Nia next because that...

Let us describe Kevin as having very much a glass half-full vision of our

future, which is good.

Yep. Optimism's wonderful.

What's your glass looking like?

Pretty worried, cracked.

I think...

I'm a rep at work and I feel really,

really concerned about maternity rights, paternity rights,

like adoption pay.

Why are you worried? No politician in Britain really has suggested they

would start drawing back on those kind of things.

Yeah, but I mean, you know...

No politician ever really publicly states any rights that's like,

you know, sort of chipped away, do they?

So you feel more protected by Brussels than you do by Westminster?

Yeah. Absolutely. In terms of workers' rights.

What would you say to Kevin in view of how full his glass is?

I think where Kevin's sitting in this circle is

quite telling, really.

I think that's a huge difference between Kevin and I.

With all due respect, it's also as an employment lawyer and

-HR consultant...

-Here we go with the word, consultant!

It's having a certain aspect of insight.

There has been no conjecture, there have been no murmurs of a

retraction of rights whatsoever within our field.

There's been none of that.

-I want to come to Ben.

-It's not like when we leave the EU,

suddenly we will lose all the laws that came in because of our

membership of the European Union.

And, actually, Britain has been leading the way when we were in the

European Union in terms of employment law.

But what I would like to see, that we can do now, is take on some of

the big corporations where their power of lobbying in the

European Union was much higher.

There's been a lot of people at each other's throats here today

because small businesses are employing people, but really it's

the big corporations that are the problem because the playing field

isn't level because they don't pay tax and everyone else does.

So that's what we've got to address.

And would we be better able...?

The French have been able to bring in much more just or punitive,

depending on your perspective, tax arrangements for companies

that have got a softer deal here.

So, not necessarily relevant whether in the European Union or not.

Well, I think the majority of the country really wants to see change

and that's the difference because now we have sovereignty over our own

Parliament, we can force politicians to make a change.

But the French could do that before.

I mean, the French have a different employment system and I think in

many ways, their employment system isn't set up for growth

in the way ours is.

But in terms of protecting workers' rights,

they do have some advantages.

The point is, we've got to realise that we have the power

now in Britain to elect our officials.

-Who do you speak about, "we"?

-The British people.

-Absolute nonsense.

-There is an MP about to...

I don't want to put you on the spot,

but most people don't know who their MEP is,

they don't know who the European commissioner is.

-What's that got to do with it?

-They don't have a direct connection with

the people that are in power making the decisions.

I hope that the British people really stand up now,

bang the table and say, "These are the things we want."

Politics at the moment, I know a lot of people don't have much faith in

it and I don't either, but it's collapsing around us.

We can rebuild it in the form that we want to,

but it's up to everyone in the country to do.

Another half full, three quarters full, perhaps, your glass.

The lady up there. Hang on, I said, "Lady." Definitely said, "Lady."

Actually put my hand up but I think the original question was,

"Will Brexit lead to a pay rise for Britain?"

I believe that it will.

I believe it's for two different reasons.

One, we will no longer be weighed down by the 150,000 pages of

regulatory burden that is put on small SMEs that stop us

from being more productive and being able to pay people more.

And also when you look at the Bank of England's own report,

I think it was entitled

The Effect Of Immigration On Occupational Wages:

Evidence For Britain. Even that report stated that mass migration,

which should stop when we leave the European Union,

we'll have control of our borders,

I believe that there will be less competition for jobs which will mean

that without so many people going for them,

wages will inevitably rise.

Gentleman here in the blue.

Yeah, I don't think Brexit will give us a pay rise because...

-Why not?

-As that lady said over there,

she talked about 150,000 regulations or something like that that we're

going to lose if we leave.

The thing is, a lot of the regulations are what have given us

sufficient pay structures in the UK and leaving the European Union,

which has often been the place of last resort for us as a country,

to get these things that we would otherwise lose, pay,

we will not have pay rises because a lot of these companies are going to

go, "Right, we're out, let's do things our way."

Let's go back to that, what are these regulations you don't like?

What are the things you think we're going to be gloriously

-liberated from?

-Well, there's lots of them to start with.

-I can't name any specifically.

-We only need one.

Of course. For instance, the work time directive.

That is one. I believe that if you really want to do well in your job,

like the guy was saying, adding value to a business...

You can opt out of that already.

Yeah, well, I don't think that a lot of people choose to,

so I do believe that a lot of small SMEs... I don't own one myself,

but I think the regulatory burden,

I think it was estimated at over £100 billion a year.

I don't want to labour the point but you've got to name some regulations.

Like I was saying, the work time directive.

I don't think that helps SMEs at all.

So you think we are better off in?

Without a doubt because at present...

..we have the Labour Party...

I've been a member of the Labour Party for 30 odd years.

We are in crisis and the Tories, especially the right-wing,

has seen Brexit as an excuse to destroy organised labour

within the UK and as Jacques Delors famously said at a Labour Party

conference, "You are better off in the EU

"because we will protect workers' rights."

Let's steer it back to the debate. Sam, you're in business.

-Yep.

-You're successful.

-Mm-hmm.

-Does the future look bleaker or brighter as a result of Brexit?

Well, I think everyone in this room already answered that question,

no-one really is expected to be much better off, I think...

-Those people over here are.

-Well, 20% of the audience said they

thought Brexit would lead to a pay rise.

So, I mean, 80% of people don't expect to be better off.

It could just be optimists versus pessimists?

I think entrepreneurial businesses, small businesses are the best and

most adaptable people in this economy to be able to

take advantage of the opportunities that come up.

There is a load of businesses in the UK which are UK-to-UK,

business-to-business companies who are burdened by EU regulation.

They don't even trade with Europe.

The idea that that is beneficial and the cost of the implication...

I'm not going to sit here and pretend I know any

-of the regulations...

-But isn't that important?

I mean, the other people who are doing the other side of this...

If you're arguing that they're awful,

-surely you have to be able to name one.

-You've got the...

It's a phantom thing, it's an absolute phantom thing.

I run an SME. We have no problem with EU regulations

or any regulations.

-Tell me what he's doing wrong.

-On top of that,

EU migration fuels our growth.

I didn't literally...

We try and hire as many great cleaners as we possibly can

to clean our business. Only 40% of our cleaners are from Britain

and we would not be able to grow the way we can without the free movement

-of labour.

-It has been fuelled by immigration.

I haven't got a problem with immigration in this country.

I welcome everybody that wants to come here and work.

I have absolutely no problem with the levels that come here as long as

we can sustain them in our economy.

-At the end of the day...

-Go to the lady here.

She wants to know what's wrong with the people already here.

What's wrong with all the people?

We've got people from all races and creeds and cultures here.

What is wrong with them?

Why can't they be employed?

Stick up for British people, all of those people that are here now.

They have to apply for the jobs.

They don't apply, they're not going to get hired.

I don't think it's about people who aren't applying for them.

There is a myth in this country that there aren't enough people who can

be skilled up. There are very intelligent people in this country,

we are all sitting here.

The employer should be paying for the skilling up.

I'll just come back to Lawrence on that question.

So Brexit for your business.

Brexit is very, very frightening. Brexit is very, very frightening.

A lot of our bills, we have to pay the Americans for licensing,

hardware, so... The dollar has a big wage bill.

I know you try to spread the money around,

is there going to be less money to spread around?

There is going to be less money because we aren't as strong

-as we were...

-The cost of living will drop.

Why will the cost of living drop?

Because we won't have to have huge parts of our countryside not being

farmed, so the supply of agricultural goods in supermarkets

will increase. We don't have the common tariff of the EU,

which put a price on imports from outside the EU.

-So basic consumer goods will go down in price.

-This is not true.

-It's not nonsense.

-55% of UK farming comes from EU subsidies.

No, no, 55%. Where are they getting the money from?

Future Labour governments are not going to give farmers loads of land

money when there's people really on the bottom.

Also, 68% of the food in the UK we eat is only made by the UK.

We import the rest. That's going to cost us more.

Subsidies slow down the supply side of food in society.

-And can I say on legislation?

-You can, madam, carry on.

Thank you.

If we want to deal in the single market,

we have to adhere to the EU standards.

So if we want trade with them, there's 100,000 regulations,

-there's 40,000...

-150,000 pages.

There are 62,000 standardisations and 40,000 legal acts, but if we

want to trade with the single market, we have to adhere to them.

That applies to Norway that is in the EEA,

they have to pay tariffs on cheeses. They have more migrants than we do.

This is not like, "Oh, yeah, we can just take the good deal."

It's not working.

Hey, hey, hey. You know what happens now?

This is the bit where I point out that we've actually run out of time

but the conversation is guaranteed to continue long after the end of

the programme. But that really is all the time we have.

Yes, but if you've been inspired to find out more about how Britain can

get a pay rise, explore this and other current economic and business

issues by going to bbc.co.uk/payrise and follow the links to the

Open University and that's it from us.

-Goodnight.

-Night.