Why socialists call for nationalising the 'commanding heights' of the economy

Nationalisation, the taking of major industries, utilities and banks and out of the hands of private profiteers and into public ownership, to be run under democratic workers’ control and management, has always been a cornerstone of socialist ideas. 

This article also appeared - with improved editing(!) in the Socialist No.1261

Marx and Engels explained in the Communist Manifesto how, to bring an end to capitalist crisis, private ownership of industry and commerce needed to be replaced by state ownership. In Britain, reflecting the influence of Marxism on the pioneers of the labour movement, the demand for public ownership was widely supported as the way to build a better, socialist, society. 

A 1911 book containing the ILP's "ABC of Socialism"

For example, the Independent Labour Party adopted an “ABC of Socialism” which explained that "The fight against private ownership of land and capital, the fight for Socialism, for the nation's control of its own resources, is the last fight in the age-long struggle of humanity for freedom ... That is Socialism: The nationalization of the land and of the means of producing and distributing wealth; and the organisation of industry as a civic service under public ownership and control for the benefit of all, instead of, as now, under private ownership and control for private profit".

In 1918, the Labour Party adopted the famous ‘Clause 4’ of its constitution. It called for “the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service”. That ‘socialist clause’ remained in place right up until 1995, when Tony Blair finally managed to persuade a Special Conference to ditch any reference to common ownership, as part of his drive to turn ‘New Labour’ into a fully pro-capitalist party.

Whereas the original adoption of Clause 4 had been taken under the influence of the Russian Revolution successfully abolishing capitalism in 1917, its removal came in the wake of the collapse of the nationalised, planned economies of the Soviet Union and other Stalinist states. Their demise dealt a powerful blow to the idea that nationalisation could provide an answer to poverty and exploitation. Instead, a triumphant capitalist class asserted even more vociferously that private ownership and the ‘free market’ was the only way to run an economy. That capitalist ideology took a firm grip of the leadership of former workers’ parties, like Blair, across the globe. 

Privatisation

Many capitalist governments had already embarked on mass privatisation of previously nationalised industries, with Margaret Thatcher leading the way in Britain. But what has been the outcome? Water privatisation has seen bills rocket by 40% above inflation, while firms dump raw sewage in our rivers and lakes, yet pay out billions of pounds in dividends to shareholders. Our fragmented, privatised railways have similarly seen fares soar but services decline. The big energy firms are being subsidised to maintain their profits while millions struggle to heat their homes. Instead of being run to provide a universal service, the postal regulator Ofcom is proposing that privatised Royal Mail might only deliver letters for three days a week in future.

But the main capitalist parties are still wedded to privatisation. Outrageously, it’s now being pushed as the supposed solution to the critical state of the NHS. Labour’s shadow health secretary Wes Streeting is talking about a Starmer Government “holding the door wide open” to the private sector. But workers – and the middle-class too – know from bitter experience that NHS privatisation will, once again, just see the private profiteers put ‘greed before need’. 

So, while Labour politicians may have bought into the idea of privatisation, a clear majority of Britons polled by YouGov in 2022 agreed that public transport, water, energy, social care, and the NHS should all be run in the public sector. That was even the most popular opinion expressed by Conservative voters. 

So, in contrast to the claims of Starmer and his pro-capitalist crew, the manifesto pledges in the Corbyn-led Labour 2019 manifesto for public ownership of rail, mail, water, telecoms and power, and to reverse privatisation in the NHS, were popular demands with most voters. 

Corbyn’s critics warned that the cost of compensating shareholders made renationalisation unviable. The bosses’ CBI put on the frighteners by calculating the cost of buying back rail, mail, water and energy as being almost £200bn! But these fat cats have already made a killing at our expense, why should we pay them a penny more? The Socialist Party says that compensation should only be paid where there is a proven need, for example to safeguard workers’ pension investments or small shareholders. 

But Corbyn’s nationalisation demands were actually still quite timid compared to those raised by the left-wing of the Labour Party, including by Militant, the forerunners of the Socialist Party, under previous Labour Governments. 

1945 and 1974 Labour Governments

In 1945, pushed forward by a working-class demanding real change at the end of World War Two, Labour was elected with a landslide majority, promising to nationalise the ‘commanding heights’ of the economy. As well as launching the NHS and a massive council-house building program, a fifth of British industry was nationalised, including gas, coal, electricity and steel, as well as the Bank of England. 

But, in reality, this was not socialism but the state acting as a prop to capitalism. The wealthy former owners of these nationalised firms were generously paid-off. They were happy to be given the cash to switch to profiteering from the real “commanding heights” that remained in capitalist hands - in the manufacturing and financial sectors, as well as exploiting cheap-labour globally.

The firms brought into state ownership were largely unprofitable essential basic industries that capitalism was happy to see the state take responsibility for. They continued to be run like private companies, without the working-class having any genuine control or management. As the ongoing Post Office Scandal has shown, a nationalised firm that still follows capitalist business methods will operate just like any other cut-throat private company.

But the post-war boom couldn’t remove that stubborn idea from workers’ minds that putting ‘people before profit’ required taking firms out of the hands of the profiteers. In response to the 1974 Labour Government caving into the pressure of big business, the ‘Tribune’ Group of Labour MPs proposed an “Alternative Economic Strategy”. A key element, still echoed by what remains of the Labour Left today, was a plan for selective nationalisation of perhaps 25 manufacturing firms, and to gradually extend state ownership over different sectors of the economy. 

Tribune argued that this core of state-run nationalised firms would act as competitive encouragement to force private capitalists to invest, thereby creating jobs and boosting economic growth. But ‘Militant’ correctly warned that the capitalists would only invest if they knew they could sell their products into profitable markets.  More fundamentally, ‘Militant’ warned that if the capitalists concluded that a left-led government was serious about seizing its profitable assets, they would use their majority control over the rest of the economy, including the banking and finance sectors, to sabotage it and bring it down.  

Chile and France

That sabotage had already been played out in the most brutal way in Chile where the Allende government had sought to compromise with capitalism, including over the speed and extent of nationalisation.  In contrast, the most militant workers occupied factories, especially where employers were sabotaging production, and demanded workers’ control of the whole economy. Allende’s attempts to placate capitalist reaction were answered by the 1973 military coup.

In 1981, the Parti Socialiste in France was elected to power on a left programme promising radical reforms and partial nationalisation. But French and global capitalism went on the attack and within a few months the reforms went into reverse. The Parti Socialiste eventually became so infamous for its austerity policies that its support collapsed to just a few per cent.

Socialists need to learn the lesson that any attempt to gradually nationalise our way to socialism will be blocked by capitalist reaction. Instead, a socialist government would need to bring under public ownership all the major monopolies and banks that dominate the economy. That would be about 150 companies in Britain. That wouldn’t be the only step needed to stop capitalism trying to crush such a transformation, a mass mobilisation of workers in defence of its government would certainly be needed too, but it would strike a serious blow against any attempted economic sabotage.

Neither should nationalised companies just be left in the hands of their previous managers. They must be run under democratic workers’ control and management. That means much more than just having some seats on the board for workers to be consulted over how the company is run. It means that workers should have real control over the day-to-day running of their workplace, over working conditions and hours, over production methods and initiatives. These steps, alone, would lift the dead-hand of top-down management and enable the insight and creativity of workers on the ‘shopfloor’ to both reduce workload and improve productivity.

Such democratic measures should be enacted in any individual firm that is nationalised. For example, in Port Talbot right now, nationalisation of Tata under democratic workers’ control and management is the only way to save jobs, stop the devastation of the local economy, and implement a transition to green steel production. Only nationalisation can ensure that economic and environmental needs are put first. A global capitalist corporation like Tata is only ever going to prioritise what is necessary to maximise its profits.

But democratically-run nationalisation of the 150 or so ‘commanding heights’ of the economy allows so much more than just protecting individual industries. It is the key to implementing full democratic planning of a socialist plan of production for the whole economy. 

A socialist plan of production

A socialist plan would put an end to the anarchy of capitalist economics, dominated by the need to generate short-term profit and, increasingly, by financial gambling rather than investment in useful production. It could put an end to the waste of unemployment, identical competing brands, inbuilt obsolescence, arms spending, and the luxuries of the super-rich. It could harness all the best elements of existing commercial planning for the benefit of society as a whole, instead of being used to work out what adverts to put on your phone or how best to avoid paying tax.

Workers’ control and management in the workplace would be part of a wider system of workers’ democracy, agreeing local, regional, national - and international - plans and priorities. Such a system would allow mass participation in genuine democracy, rather than just the chance to put the occasional cross on a ballot paper.  ‘What transport and energy policies, nationally and globally, should be followed to urgently act on climate change?’ ‘How should housing needs best be met and where?’ ‘How wide a choice of consumer products should be provided? Which ones need to be better quality?’ ‘What investment is needed to switch from unwanted to wanted production?’ All of these questions, and more, could be worked out on the basis of a democratically agreed socialist plan of production, a plan that could then be applied in practice thanks to the nationalisation of the major banks, companies and corporations.

It was the lack of such a democratic input that led to the collapse of the centrally planned economies of the former Soviet Union. These states were run as top-down dictatorships without genuine workers’ democracy. Their privileged leaders erected statues of Lenin to pretend they were “communists” but ignored what Lenin had insisted was required for a socialist state: for elected representatives at every level, subject to democratic recall at any time; for their pay not to exceed the pay of the workers they represent; for workers’ control by all, “so that all may become ‘bureaucrats’ for a time and that therefore nobody may be able to become a ‘bureaucrat’ ”. Those are the ideas that a genuine workers’ democracy would be based on.

The Socialist Party stands for a socialist plan of production that meets everyone’s needs, based on public ownership combined with democratic working-class control and management. Achieving that would at last allow all the hopes and dreams of generations of socialists and working-class fighters to finally become a reality.

As Marx’s co-thinker, Friedrich Engels, wrote in ‘Socialism: Utopian and Scientific’, “With the seizing of the means of production by society … anarchy in social production is replaced by systematic, definite organisation. The struggle for individual existence disappears. Then, for the first time, humanity, in a certain sense, is finally marked off from the rest of the animal kingdom and emerges from mere animal conditions of existence into really human ones”.

Housing: Time to put people's needs before developers' profits

I issued the following press release this morning on behalf of the Trade Union and Socialist Coalition in Westmorland and Lonsdale (@SouthLakesTUSC): 

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UPDATE: I was able to take the opportunity to put forward our case in the Council Chamber on 20 March, exposing Story Homes and pricking councillors' consciences on genuinely affordable homes. A deferral on a planning decision was passed, despite the pressure put on the councillors by council officers. As I said to the press:

"Today's debate exposed how the housing needs of our communities are at the mercy of the profit margins of private developers. As Councillor Cassidy said, councillors were effectively being 'intimidated' into putting aside their own affordable homes policy. We were pleased to have highlighted the councillors' duty to put local people's needs before developers' profits and given councillors the facts they needed to vote for a deferral"

TUSC Lobby outside County Hall in Kendal, 20 March

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TUSC says:

KENDAL NEEDS GENUINELY AFFORDABLE RENTED COUNCIL HOMES

APPLY COUNCIL POLICY - OPPOSE THE STORY HOMES “PHASE 4” PLANNING PERMISSION ON BRIGSTEER ROAD

TUSC¹ in Westmorland and Lonsdale has submitted an objection to Story Homes’ planning application for their proposed “Phase 4” of homes on Brigsteer Rise in Kendal, based on a detailed analysis of the claims made by the developer for the previous phases of this substantial development.

Our analysis² shows:

·       Story Homes were given permission to build the initial phases of the development even though their plans failed to provide the amount of ‘affordable homes’ set out in the council Core Strategy.

·       Agreeing the developer’s proposed plans for Phase 4 would mean that the overall development would be completed with 71.4% (157/220) open market properties and only 28.6% ‘affordable housing’ (63/220) – of which just 32 – just one in seven – would be ‘affordable rental’ properties.

·       The developer has also been allowed to proceed with plans that fail to provide the ‘housing mix’ set out in the Core Strategy, building too high a proportion of its bigger, more profitable, houses.

The Council accepted Story Homes’ claims that meeting its Core Strategy would make the scheme commercially “unviable”. However, our analysis suggests that the developer based this claim on income projections from house sales that underestimated the actual income that will be generated. Story Homes’ latest accounts for the year ending 31 March 2023 report that their “turnover increased by 11.9% to £269.3m (2022: £240.7m) … Gross profit has increased to £62.1m (2022: £59.0m)”.

Martin Powell-Davies, who completed the analysis for Westmorland and Lonsdale TUSC said:

“Low-paid workers and their families see expensive developments like Brigsteer Rise being built all around Kendal, but know that these are homes that they cannot afford to live in. There’s a housing crisis in Westmorland. The Council’s priority should be to provide genuinely affordable, sustainable, rented council homes.  It’s time that people’s needs were put before developer’s profits”.

“Story Homes’ latest planning application for Brigsteer Rise should be refused, at the very least unless they are prepared to complete their development to a plan that ensures that the overall ‘housing mix’ and provision of ‘affordable housing’ meets the levels set out in the Council’s Core Strategy. However, given that even those homes deemed “affordable” in the plans will, in reality, still be “unaffordable” to many local residents, the best way to meet the needs of local people would be to reject this proposal entirely. Instead, the Council should consult with local communities and trade unions over how to deliver genuinely affordable homes and demand that the next government, to be elected at some point in 2024, supports such a vitally needed change in direction in housing policy.”

1 TUSC, the Trade Unionist and Socialist Coalition, will be mounting an anti-cuts, pro-public services challenge to all the main parties in the 2024 General Election, including in Westmorland & Lonsdale.

2 The analysis & full objection submitted on behalf of TUSC can be downloaded from https://bit.ly/42dwprF but is also pasted below:

Objection to Planning Application Number 2023/1061/FPA - 108 dwelling houses and associated infrastructure (Brigsteer Rise, Phase 4) by Story Homes.

I wish to object to the planning application for the reasons set out below:

Summary

As the Supporting Planning Statement submitted on behalf of Story Homes makes clear, their application for further planning permission is for “Phase 4 of the Brigsteer Rise development in Kendal”. In considering the suitability of this application, the Council should reassess the previous claims and arguments made by Story Homes in applying for planning permission for the initial phases of this development.

As set out below, I believe in particular that the claims about ‘viability’ made by Story Homes in documents in the earlier phases of this development, specifically about the provision of ‘affordable housing’ and ‘housing mix’, need to be reconsidered.

On the basis of such an assessment, planning permission should be refused, at the very least unless Story Homes are prepared to complete the final phase of their development to a plan that ensures that the overall ‘housing mix’ and provision of ‘affordable housing’ of the whole development is at least in line with the Core Strategy.

Given that even those homes deemed “affordable” in the plans will nevertheless be, in reality, “unaffordable” to many local residents, the Council has a duty to at least insist that its own Core Strategy policies are applied in full. However, the best way to meet the needs of local young people, low-paid workers, and their families, would be to reject this proposal entirely and to instead begin a process of consultation with local communities and trade unions over how to deliver genuinely affordable, sustainable, secure, publicly owned and democratically controlled rented housing within Kendal and the surrounding areas.

Core Strategy

The Supporting Planning Statement submitted on behalf of Story Homes itself refers to the following aspects of the South Lakeland Core Strategy:

Policy CS6.2 – Dwelling Mix and Type requires new development to offer a range of housing sizes and types, taking account of the housing requirement of different groups of society, including the need to deliver low-cost market housing as part of the overall housing mix.

Policy CS6.3 – Provision of Affordable Housing requires provision of no less than 35% affordable housing on schemes of nine dwellings or more. … Exceptionally, a lower requirement for affordable housing will be acceptable where there is clear evidence that it would make the development unviable.

The proposed planning application, particularly when considered over all four phases of the development, does not match these aspects of the Core Strategy and so should be rejected as it stands.

Dwelling Mix and Type

Previous Planning Committee papers have also referred to the recommendations of South Lakeland District Council’s 2017 Strategic Housing Market Assessment:

The Planning Committee Report for the meeting of Thursday, 26 August 2021 (para 5.55) noted that the proposed mix of market housing in the latest iteration of the applicant’s layout was “clearly a very poor match to the expectations of the SHMA”. The proposal submitted by Story Homes for the initial phases was nevertheless accepted. However, this should not be allowed to happen again in the light of the analysis below (which I believe is correct from the evidence available on the planning portal) summarising the proposed housing mix for all four phases of the development in total:

Open Market Homes

The analysis shows that, if the Council allows Story Homes to proceed with its plans, the Brigsteer Road development will be heavily skewed towards properties of 4 -bedrooms or more, completely ignoring the recommendations of the SHMA:

Low Cost Ownership

The analysis shows that, if the Council allows Story Homes to proceed with its plans, the Brigsteer Road development will again be a “poor match” to the SHMA, particularly giving no opportunity for low cost ownership of one-bedroom properties:

Affordable Rented Homes

The analysis shows that, if the Council allows Story Homes to proceed with its plans, the Brigsteer Road development will also be failing to meet the need for larger families to have access to affordable rented accommodation, with very little provision being provided for properties with more than two bedrooms:

I would also note that the Strategic Planning Committee paperwork for the meeting of 19 September 2023 (page 27) contains a request from the Housing Strategy Team based on “feedback from registered providers and their tenants” that the “Branford type house … the default 2 bedroom type offered by Story Homes” is too small in size. The Team asks if “this 71m² model … is potentially replaced with a larger 2 bedroom property that would provide a more sustainable family property i.e. a 2 bed 4 person criteria. (79m² )”. The 6 ‘Branford’ homes in the table above suggest this request has been largely ignored.

Social Need before Developer Profit

The reason for Story Homes wishing to skew the overall housing mix of the development towards larger homes for open market was also made clear in the Planning Committee papers for the initial phases of the development (Thursday, 26 August 2021, para 5.59). There it is explained that “the replacement of some of these larger units with smaller units would reduce overall GDV [Gross Development Value, the revenue anticipated from a completed development scheme], and have an adverse impact on scheme viability.”

The Council should not allow a developers’ wish to increase its profits to override both social need and its own strategic policies. The argument that the developer must be allowed to enforce a greater GDV or “scheme viability” is at risk is not one that should be accepted. I shall return to the specifics of Story Homes financial position below.

Provision of “Affordable Homes”

Under current legislation, the definitions of "Affordable Housing" are already insufficient. For example, many low-paid residents know that rents set “at a rent of up to 80 per cent of local market rent” are not genuinely “affordable” to them. Nor will many have the required income to access “low cost ownership” and even those that do then have to face meeting the costs of both mortgage and rental payments. Council strategy should therefore instead focus on providing genuinely affordable social housing.

The very least that the Council should do is to at least insist that the Brigsteer Road development complies with its Core Strategy requirement “of no less than 35% affordable housing” on schemes of this size.

As the analyses above show, agreeing the proposed plans for Phase 4 would mean that the overall development would be completed with 71.4% (157/220) open market properties and only 28.6% ‘affordable housing’ (63/220) – of which just 32 – just one in seven – are affordable rental properties.

The absolute minimum requirement for any planning permission to be agreed for Phase 4 should be to insist that the developer reduces the number of open market properties by at least 14 and instead builds them as “affordable homes”. This would at least increase their number to 77 – 35% of the total – at least just then meeting the Core Strategy requirement of “no less than 35%”.

However, the best way to meet the needs of local young people, low-paid workers, and their families, would be to reject this proposal entirely and to instead begin a process of consultation with local communities and trade unions over how to deliver genuinely affordable, sustainable, secure, publicly owned and democratically controlled rented housing within Kendal and the surrounding areas.

The Council should also approach the new government, to be elected at some point in 2024, to seek their support for such a change in approach to housing development.

Development Viability

Story Homes will undoubtedly object that any requirement to provide more “affordable homes” will make their development “unviable”. After all, this is the argument that they have made ever since the first stages of the planning process for the Brigsteer Road development.

The Planning Committee papers for Thursday, 26 August 2021 (para 5.13) point out that the Core Strategy allows for the 35% requirement for affordable housing to be breached – although only “exceptionally” – “where there is clear evidence that it would make the development unviable”. And Story Homes claimed that they faced just such “exceptional circumstances”, insisting that they could only afford to go ahead with 20.5% of affordable homes in the initial phases of the development. In fact, their consultants, Grasscroft Development Solutions (GDS), suggested that, in doing so, Story Homes were proposing “a very generous commercial decision which has been arrived at in spite of the scheme viability" (para 5.32). Such a claim should not have been accepted and certainly should not be when considering the current planning submission and the overall mix and affordable homes provision across all phases of the development.

In 2021 (para 5.43), GDS proposed that the total sales revenue would be £27.38M, made up from £25.785M from the sale of 70 open market units and £1.60M from the 18 ‘affordable units’. GDS estimated the total construction costs to be around £23M, leaving a profit on Gross Development Value of 15.97% (£4,373,042). Cumbria County Council’s valuer (para 5.45) was reported as estimating a higher profit on GDV of 18.09% (£4,961,104).

I think it will come as a shock to the many local tenants and residents struggling to pay their rents and mortgages that the Council papers (para 5.44) reported that current National Planning Guidance considers a 15 – 20% profit to be “a suitable return to developers”. Are the Council again going to agree that the ‘requirement’ for the developer to be able to report a multi-million pound profit is of greater importance than the requirement to provide genuinely affordable homes to local people?

What was the actual sales revenue?

How much has the actual sales revenue been compared to what the Council was initially told? To provide at least an initial answer to that question, I have conducted a rough analysis of the house prices currently being advertised on the Story Homes website and/or through online estate agent archives.

It suggests that the actual revenue that might be expected to be generated from the sale of the 70 open market homes might be £32.375M. If so, that would be £6.59M more than the £25.785M estimated by GDS in 2021. Certainly, rather than accepting the claims made by a developer at face value, councillors should conduct a clear review of the claims made about commercial viability in 2021.

Story Homes Annual Report

One final bit of research that councillors might want to carry out is to examine the latest Annual Report for Story Homes Limited, which was recently uploaded onto the Companies House website.

The Strategic Report for the year ending 31 March 2023 states that “during the year, there were 915 homes sold (2022: 846). Turnover increased by 11.9% to £269.3m (2022: £240.7m) in line with the business returning to a normal year following the Covid-19 pandemic. Gross profit has increased to £62.1m (2022: £59.0m). The retained profit after tax for the year was £24.3m (2022: retained profit after tax of £23.6m)”.

The notes to the financial statements also record that “the highest paid director received remuneration of £882,430 (2022: £531,230)”.

Do these accounts present a picture of a company in such “exceptionally” difficult circumstances that it is simply “unviable” to provide affordable homes?

A change in approach needed on agency supply advice

After the 'Post Office Scandal' - school managers need to stop and think too

Right now, everyone is talking about the 'Post Office Scandal', outraged at how a powerful organisation refused to accept their own failures and instead sought to bully their critics into silence. Thanks to the dogged determination of Alan Bates and other campaigners, the way that Post Office Limited, alongside Fujitsu and Government Ministers, refused to acknowledge the faults with the 'Horizon' IT system - and instead disgracefully pursued Subpostmasters through the courts - is now out in the open.

Mr Bates vs The Post Office. Produced by ITV studios and available to stream on ITV+

Perhaps the reason why this story has sparked such a widespread public reaction is because so many workers recognise something of that bullying approach in the way that they are treated too. And that includes school staff. Schools may not have pursued teachers into the courts like the Post Office, but every local union caseworker has had to deal with similarly broken colleagues, bullied out of their post under draconian threats of 'capability' procedures. More often than not, they have also had to sign a 'Non Disclosure Agreement' that stops them from talking out about how they have been treated.

Some school managers need to stop and reflect whether their practice needs to change. Are they just piling the pressure put on them via Ofsted and League Tables down onto their staff, pushing too many to breaking-point, when, instead, they should be standing up against the impossible demands put onto schools? 

Forced into insecure, underpaid, supply work

The impossible workload, and the hounding of staff by supposed 'support plans' and capability targets, is one (although certainly not the only) reason why some teachers end up working for privatised supply agencies. As someone whose own personal circumstances meant that I earned my living in this way for the last years of my teaching career, I know what a difficult way of earning an income this can be.

Work is uncertain, sometimes leaving you waiting for a phone call from the agency that never comes on a day you were hoping for work. Supply teaching is demanding, constantly having to plan and adapt, sometimes at very short notice, to different classes and different school systems. Worst of all, thanks to the privatised system of profiteering supply agencies through which most supply teachers are hired, you are working for less - sometimes far less - than the 'rate for the job' that would apply under statutory teachers' pay scales. On top of that, you have no access to the Teachers' Pension Scheme and no income to tide you over the school holidays.

That exploitation continues, despite the introduction of legislation fought for by trade unions that was meant to provide equal treatment. The Agency Workers Regulations (AWR), introduced in 2011, should guarantee that, after a qualifying period of 12 weeks in the same job, agency workers receive the same basic employment and working conditions as colleagues who have been recruited directly. But most agency school staff are still not being paid 'the rate for the job' that applies to directly employed staff under the Schoolteachers Pay and Conditions Document.

It's worth non-agency employees remembering that unions didn't push for AWR just to protect agency staff, but to protect permanent staff as well. After all, if employers can find a way to pay one section of the workforce on lower rates of pay, then, especially when employers are looking to cut costs, they will find a way to get rid of more expensive employees and employ cheaper agency staff instead. So demanding equal treatment for all staff is in everyone's interests, especially when schools are going to face more funding cuts, whoever wins the 2024 General Election.

Unions must also reflect on failings instead of just attacking critics

Sadly, recent events in the NEU suggest to me that some reflection is also needed at the top of my own union, the NEU. Just before the end of last term, the regular weekly bulletin emailed to NEU Officers carried advice which included the following about the "National Supply Teachers Network": "The National Officers have recently considered several complaints, queries and concerns from NEU members and local officers about the status of the National Supply Teachers Network (NSTN) ...  NEU members, branches and districts have been approached via NEU forums and encouraged to become members or to affiliate as a union group to the NSTN. Individual members have been encouraged to be represented in Agency Worker Regulations casework by the Network ... Branches should not refer any NEU casework to the Network".

I was not the only supply teacher who has worked with the NSTN to be angered by this advice. The NSTN is a group of activists who have been trying to support and advise supply staff for the past decade, and, yes, that has sometimes included representation, and, yes, has also included criticism of the Union. Whatever concerns Union officials might have about that, and perhaps the way that some of those criticisms have been raised, sending out a circular referring to unspecified "complaints, queries and concerns" gives no opportunity for those to be answered by the NSTN.

More to the point in the present context, rather than just attacking its critics, I think the NEU needs to reflect on whether the criticisms from the NSTN are justified. In particular, why are union members seeking advice and representation from an unofficial Network, rather than from the Union? If it's because the advice from the Union is inadequate, telling members that they haven't got a case when the Network can show that they have, then the answer is clear.

A meeting of the NSTN that I attended last night indeed suggests that the NSTN has been succeeding in cases where the NEU has not. A report was given outlining settlements won for members through the Agency Workers Regulations that have amounted to hundreds of thousands of pounds over the last few years. In recent weeks settlements had also been won using the "Harpur Judgement" over paid holiday entitlement. Many of these cases had only been taken up by the NSTN after members had previously being advised by the Union that they would not succeed.

Sadly, I am not surprised that supply teachers are sometimes being wrongly advised that they do not have a case under the Agency Workers Regulations. That's because I have been trying to point out the weakness of the AWR advice issued by the NEU to its caseworkers for several years.

Instead of attacking critics, the Union needs to reflect and consider its own failings.

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NEU Advice on Agency Workers Regulations - some thoughts:

For information, I am also adding here a copy of a letter that I sent in 2022, as requested from me as a member of the NEU's Supply Educators Organising Forum, about three parts of the AWR advice on the NEU website. I believe these concerns are still valid:

1) "The [AWR] comparison is not to the pay of an agency worker in a ‘comparable role’ – it is to the pay that the agency worker would receive if they were recruited to do the same role directly by the school. Where the supply teacher or member of support staff is on a daily contract, comparison will be to the pay of a supply worker engaged directly on a day-to-day basis. Where the duration of the engagement is agreed at the outset to be for a fixed or minimum period of, e.g. one term or one year, comparison will be with the pay of a teacher/member of support staff engaged directly on a fixed-term contract for the duration of the engagement".

First of all, I think to raise this comparison is at the very least unhelpful and, although I appreciate that there might be different legal opinions, questionable in its accuracy. Section 5 of the Agency Workers Regulations 2010 refer to “a comparable employee … engaged in the same or broadly similar work”. Yet, as the NEU website itself states in a later section entitled 'What is the ‘same role’?", "A role will be considered the ‘same’ role unless it involves a substantially different type of work ... all classroom teaching is substantively the ‘same’ role for the purposes of the Regulations". Therefore, our starting point should be to stress that teaching is the "same or broadly similar work", whether carried out by an agency teacher, a supply teacher contracted directly, or those on a long-term contract. 

Secondly, and perhaps worst of all, the way that this paragraph is worded implies that a supply teacher employed directly on a day-to-day basis might be paid on a different salary scale to one paid on a fixed term contract. On what basis would that be the case and why would we raise it as a possibility on the NEU website? This advice potentially undermines the pay rates of directly employed supply teachers as well as agency teachers too. Again, the point is partly answered (and contradicted) by the later paragraph saying "Most school pay policies will not contain separate provisions on the pay of supply teachers engaged on a day-to-day basis ... the NEU will argue that this approach is potentially discriminatory on various grounds and should not therefore be followed ...So agency supply teachers are, after 12 weeks, entitled to be paid the same pay rate as if engaged directly as a supply teacher or as a teacher on a fixed term contract."

Instead of raising the damaging possibility that supply staff should be paid at a lower rate than those on long-term contracts, I would ask colleagues to consider wording along the lines that I have proposed in my admittedly unofficial advice sheets: "The pay and conditions that must be applied under the AWR are those that ordinarily apply in that school - i.e. the standard pay scales that apply to direct recruits. For agency teachers, the entitlement is to the teachers’ pay scales applying in that school".

2) "The school teachers’ pay and conditions document (STPCD) allows schools to decide for themselves how much they will pay newly appointed teachers – they do not have to pay newly appointed teachers at the same pay rate or pay point as in their previous school or in previous direct employment. Many schools follow NEU policy by adopting a school pay policy, which provides for pay portability, ie previous pay entitlements for experience, to be maintained for newly appointed teachers. Where a school pay policy is silent on the issue, it is possible to refer to previous pay decisions in order to infer a policy that should be followed in subsequent decisions. The NEU would therefore argue that an agency teacher who was employed on, for example, M6 or U3 in a previous permanent post should be paid at that same rate as a supply teacher. But that teacher would not be entitled to that rate after 12 weeks if the pay policy does not provide for pay portability or such a policy inferred from previous practice".

This is also unhelpful advice as it starts by raising the argument of the employers - that the lack of automatic 'pay portability' in the STPCD means the AWR does not apply - rather than starting by asserting the union argument in a far stronger fashion that this is not the case. Again, I would ask colleagues to consider wording along the lines that I have proposed in my unofficial advice, notably that:

* 'BEIS' advice “where a hirer has pay scales or pay structures” states clearly that "starter grades which apply primarily, or exclusively, to agency workers may not be compliant if not applied generally to direct recruits”. In short, if a school says it will only pay an agency teacher at, say, an M1 rate, then it will need to show that it also recruits new permanent staff at M1 too.

* To emphasise that a school can’t assert that “we can pay you what we want” if an agency teacher can show that, in practice, when it recruits permanent staff, it does take experience into account and starts them at higher points on its pay scale. We should advise that useful evidence for the agency teacher and their trade union rep to gather can include what the school pay policy says about starting rates for new recruits, what rates are being quoted in adverts for permanent teaching posts and evidence of pay rates that apply to those who have been appointed.

* It would also be useful to stress the point made in the Rush v Academics Ltd Tribunal that “[She] was entitled to have the benefit of a conversation with the [Agency] and the Trust at the 12 week mark as to what would have been the appropriate wage for her. She was denied that benefit” and that therefore the employer has a duty to justify at the 12 week point what rate it is now going to pay, and why.

3) "Schools are increasingly asking agencies to provide ‘cover supervisors’ whose roles do not include ‘specified work’ and who are therefore paid less. In circumstances where you are not undertaking specified work, there is no right to be paid the same rate as a teacher regardless of the fact that you are a qualified teacher".

This, again, is unhelpful advice. Yes, it is true that schools are attempting to undercut pay rates by arguing that supply teachers are not undertaking specified work. The NEU website should be boldly asserting that this is an argument that we do not accept and that the work being carried out by a supply teacher is, indeed, specified work requiring active teaching. Once again, I have tried to take up this argument in my unofficial advice. 

In particular, NEU advice should be pointing out that: DfE guidance on the Agency Workers Regulations states: “Teaching Pupils. If the school asks a temporary work agency to provide a teacher to carry out specified work in a school and the person engaged to do the work is a qualified teacher, they should be paid as a qualified teacher". 

We should assert that an agency teacher is hired to ensure that far more than ‘supervision’, only responding to questions ‘about process’, is taking place. As a qualified teacher, they will indeed be ‘actively teaching’, answering questions about ideas, explaining concepts, delivering lessons, assessing progress. They will indeed be carrying out activities that constitute “specified work” under the Regulations.

We should argue strongly that, to qualify for the AWR, the agency teacher will have been working on an assignment for over 12 weeks. Therefore, they will have been planning and preparing in order to be able to carry out their teaching work. Yes, they may be drawing on plans and resources provided to them, but that is simply recommended practice to reduce unnecessary workload.

In summary, I believe the current NEU website advice remains inadequate and I would ask that the relevant Executive Sub-Committee asks for a review of this advice, seeking the input of those elected to the Supply and Home Tutors' OF.