In a Luton Council report, Luton is recognised as one of the most deprived areas in the country. One of the reasons for this deprivation is that work can actually cause poverty. Here, someone has a job but becomes trapped in a cycle of government and Council handouts, due to zero hour contracts, part time work, short term seasonal work and general low pay. It could even be a combination of all of the above. Whatever the reasons, individuals end up in a situation where they struggle to feed and clothe their children.
One such source of in-work poverty is the Council-owned airport. However, Luton Council claims there is nothing it can do to raise wage rates and refuses to get involved, stating that it is down to employers to set the wage rates and hours worked for staff.
The very way the airport is run is a major contributing factor in a race to the bottom. The airport is 100% owned by London Luton Airport Ltd, which in turn is owned by the council. LLAL has no staff with responsibility for the day to day running of the airport. Instead, this is carried out by London Luton Airport Operations Ltd. This organization, in turn, contracts out as much work as possible to other companies and awards contracts on the lowest tender. The winning company then has to trim staff costs to the bone to try to operate the contract at a profit. This often means zero hour contracts and part time work where – due to the hours worked – some employees get no holiday pay or National Insurance contributions.
Likewise, airlines contract out to third parties their terminal and apron services. This means that handling agents bid for contracts that will employ baggage handlers, dispatchers and check-in staff. Another major source of low pay at the airport, is in retail and food outlets where – like the rest of the airport – 24/7 shift patterns (with 4 am starts) are normal practice. Despite workers often being in work poverty, the airport operator charges the workers to park their cars in the staff car park.
By driving costs down to the bone, the airport operator can offer airlines discounts to start new routes and services. The council (which offers financial incentives to the airport operator to raise passenger numbers) encourages this. Because of this it is not in the interests of the council to see wage rates increase, as an increase would put up the costs of running the airport and might thus dissuade airlines from coming to Luton.
The council now wants to create around 5000 new terminal, car parking and apron jobs, so creating another generation of workers trapped in a never-ending spiral of poverty, as new contracts are awarded to even lower tenderers. The council will also be aware that it needs a large supply of poor people who are prepared to work at the airport, so the future is not looking bright for the most disadvantaged – while the council, of course, counts its profits.