Ludwig, I can understand why somone in your position may find it frustrating if prices were to go up. It would cost more for revals, check outs etc..
But what we all seem to forget is the skill level needed to be a decent instructor, not to mention the qualifications. These are all very expensive to obtain, so an FI earning £8-10K is not really a feasible career choice.
The whole reason for this scenario is that it IS a cut-throat world, if somone is prepared to do a job for nothing, then no self-respecting business is going to turn them down. Unfortunately with PPL's allowed to instruct, but not allowed to be paid, this seriously devalues the profession, as by nature most people teaching on a PPL are doing it as a hobby and see it as "free flying" once or twice a week. For that amount of work it is fun, but try doing it 6-7 days a week, every week, it soon becomes a job like anyother. (maybe with a nicer office tho'!)
A Union could help as it would bring together all instructors who could then speak with one voice. It's the old "Together we stand, Divided we fall." If FTO's have to put their prices up, then so be it. Flying instructors have been expoited for a long time and unless there is a strong national voice then it will never change.
Of course there are ways to earn more money as an instructor, become an examiner, an IRI or a multi instructor for example. Unfortunately again this is all added expense and often hard to justify when you are at a lower level, for instance to become an IRI you must have at least 800Hrs IFR. Not easy to get teaching PPL's.
Ludwig, as for your comment as to finding your market rate etc, this maybe true, therefore the market itself needs to change.
Instructors alone cannot achieve this, it would obviously need the FTO's to help aswell and I cannot see many companies turning down higher turnover, aslong as all training organisations do this, then it won't be a problem.
Is any of this feasible?? Maybe. Over time and with a lot of pushing. As BEagle said, the Government could help by reducing tax and duty of costs .If they do that, then that could help alot. BUT has anyone actually aked them to do that. This is an example of where a trade union could be useful.