Archive for category Economy

Inverness outpost (5): “Our country pays its way”

John Swinney MSP brought the 77th SNP Annual Conference to a close with a heartfelt and impassioned speech, declaring that “this is the time to put the wealth of Scotland to work for the people of Scotland.”

He used his conference address to dispel some of the economic myths about Scotland.

First, Scotland might have a deficit but the UK has a higher one.  And while Scotland ran a budget surplus in four out of the last five years, the UK was in deficit.  Scotland, he suggested, contributes more to the UK in tax revenue than “we get back in UK public spending”.  Which means that Scotland is subsidising the rest of the UK.

The conclusion?  “Our country pays its way”.

And he revealed that GDP figures show that with an appropriate geographical share of its offshore resources, Scotland would be the sixth wealthiest country in the world.  That’s ten places ahead of the UK which sits in sixteenth position.

In the main, his speech concentrated on the day job.  He pledged that “our Government will use every one of our limited existing powers to deliver economic growth for Scotland” but warned “our actions are being thwarted by the Con-Dem coalition’s failed policies”.

He called on the UK Government to recognise that its cuts agenda is harming Scotland, demanding they get their “heads out of the sand” and invest in economic recovery.

The Cabinet Secretary for Finance, Employment and Sustainable Growth contrasted this with the way in which the “SNP Government is delivering real action for Scotland”, working to create the best conditions for employment, to tackle youth unemployment and investing in communities across Scotland to support jobs and promote growth.

He also focused on the Scottish Government’s ambitious investment in preventative spending – “this Government won’t short change Scotland on its future” – and defended the decision to increase the business rates of large retailers who sell tobacco and alcohol.  He argued that the increase would amount to just 0.1% of retail turnover in Scotland:  “I don’t think it’s too much to ask highly profitable retailers to make a contribution to creating a better future for our people”.

And while most of his colleagues had studiously ignored Labour in their speeches, John Swinney noted that Alistair Darling promised cuts that were toughter and deeper than those of Margaret Thatcher, promising to remind Labour MSPs of this every time they demanded more spending during the budget process.

He also suggested that next May’s local authority elections were “an opportunity to rid Scotland of Labour municipalism”.

Swinney concluded his speech in a highly personal note, recalling that he first came to SNP conference as a teenager, and in the intervening 30 years, he had seen the party grow – and grow.  He acknowledged that at times he wondered and doubted whether the “idea that it is best that the people who choose to live in this country should shape her future” would succeed.

But now, he noted, this “is our chance to fulfil the promise we made to our people.”  He suggested that the party’s task was simple:  “we must go out and persuade and inspire the people of our country that Independence will be right for them” and called on fellow party members to “commit to fulfil our promise to the people of Scotland”.

It was a rousing and fitting end to four days of a conference which kick-started the yes campaign for independence.

 

 

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Interns are not workers

A guest post today from Barry McCulloch. Barry is an independent policy consultant. Currently, he is the Policy Manager at the Centre for Scottish Public Policy (CSPP) and the Policy & Communication Officer at the Economic Development Association for Scotland (EDAS). He hates acronyms yet uses them daily.

There is nothing quite like feeling passionate and angry on a wet, dreich Monday. I’m usually foaming at the mouth reading about internships at the best of time, but Nick Cohen’s excellent article in the Observer has (almost) pushed me over the edge.

Before launching into a polemic it’s worth pausing and providing a bit of context. In November 2009 graduate unemployment was spiralling out of control – youth unemployment was approaching one million, a fifth of whom were graduates.

Essentially, it was making a difficult task (obtaining a paid internship in Scotland) even more challenging in an underdeveloped “intern industry”. And there was little assistance to help Scotland’s struggling graduates.

With no funding the Centre for Scottish Public Policy (CSPP) created the Adopt an Intern programme (excuse the ancient site – a new one is on the way). The aim was simple: to build a fair, accessible and transparent internship culture in Scotland. Fast forward two years and 107 paid internships have been placed with the assistance of Scottish Government funding and employer contributions across the public, private and third sectors.

It has been a huge success and the programme is now offering intern exchanges between Germany and Scotland. But enough about the CSPP. As Cohen’s article painfully points out, they are only scratching the surface. Quite blatantly there are deep-seated and regressive cultural attitudes to internships.

Interns, so the argument goes, require experience in the labour market so do not deserve to be paid. They are a different type of employee who is not protected by the Minimum wage or the Equal Pay Act. Thus, their terms and conditions can be altered at the whim of an employer. As new Defence Secretary Philip Hammond (the richest man in the Cabinet) said:

“I would regard it as an abuse of taxpayer funding to pay for something that is available for nothing and which other Members are obtaining for nothing.”

How frugal. It is no surprise, then, to find new companies popping up to provide free interns and quell demand. One of the companies Cohen highlighted is Etsio. Curiosity got the better of me and I checked out their website. Honestly, I wish I hadn’t.

The FAQs section is worth quoting in detail because it’s illustrative of the norms and values embedded in London’s internship culture. I couldn’t resist adding some comments.

“Candidates

Why should I pay for a job?
You aren’t paying for a job (yes you are). You’re buying experience. Most applicants we come across don’t have any experience that would make them useful to our employers (students don’t have work experience? I don’t know what graduates they know).

And remember that our work experience clients are putting themselves at risk by exposing their trade secrets, customers and inside information to you. That isn’t the kind of experience that you can get elsewhere.

How much do I have to pay? (Yes, they have to pay for the privilege)
Each employer sets their own daily fees.

Employers & Interns

Is it ethical? (No)
With students now paying £40,000 for a university education – but zero useful experience for an employer – we don’t think it’s unreasonable for them to pay a few hundred pounds to get invaluable real life experience.

And many of our employers are small businesses who wouldn’t normally take on an intern. Etsio opens up the market to whole new areas. And applicants get to see how real businesses work. (If you or your parents can afford it)

It’s definitely morally suspect for an intern to take the place of a worker; and that happens all over the Western world at present. But (a big BUT) the Etsio service allows applicants to get a ringside view of what it’s like to work in the amazing businesses that feature in Etsio.

Is it legal? (No, not if they are indeed workers)
Yes. It’s a legal requirement to pay workers a minimum wage. But the interns are not workers: they don’t have regular tasks, they aren’t under the control of the employer, and they can come and go as they please. The intern is paying to learn, just as they pay to attend university. (All of this is complete and utter nonsense).

How does Etsio make its money?
By adding a small admin charge. It’s included in the fee that’s shown against each employer. There are no other charges.”

There is no shortage of organisations or politicians (a certain Mr Clegg comes to mind) that could have been named and shamed. The list is long, very long and by no means is it restricted to England (see Kezia Dugdale’s article). The exploitation of interns (graduates who will become critical to the success of the national economy) will continue until we settle some basic, fundamental questions:

  1. If interns are not workers then what are they?
  2. What rights do interns possess in the workplace?
  3. Should interns be paid (at least) a Minimum wage?
  4. At what point in the internship does an intern become an employee? 6 months? 9 months? A year?

The dictionary defines a slave as “a person who works in harsh conditions for low pay”. I’ll let you decide on whether an unpaid intern is a slave. But one thing we all should be able to agree on is this: paid internships, a “proven access point to professions”, are central to making a fair, equitable and mobile society.

Is it time for a Scottish Stock Exchange?

Across the world, dreadlocked, falafel-fuelled protesters are gathering in their dozens to camp out outside stock exchanges and areas of commerce to decry the greed that exists in our Corporate world. It is an injustice that cannot be denied. People lining their pockets with millions while so many struggle to just get by from one day to the next is far from an ideal model of how to run a fair and just society.

That said, it’s not clear what the end game is, not at all clear what success looks like from these makeshift campsites and Dylan songs wafting in the evening air. I popped my head by the Occupy London site at St Paul’s just a moment ago and there is little space for the extra protesters that would be required to turn the efforts into a movement that might actually get somewhere. I’m not being cynical but realistic. These particular efforts look set to come to nothing.

Hopefully a partial solution to the huge profits, salaries and bonuses that do exist out there will come through the Parliament, and particularly through pressure from Labour, the Greens and indirectly from the SNP (or directly through independence, but that’s not what this post is about). One of the big problems with the UK right now is that wealth is concentrated in London and the South East of England. Pulling and spreading that wealth out to other parts of the UK is difficult when the majority of profits come from market sectors that would not leave London for love nor money.

My hope is to see policies such as the following come into being:

(1) No one salary in any organisation being more than 10x to 20x the salary of the lowest paid person
(2) All pensions being of equal size irrespective of the role taken within the organisation.

But, perhaps there is something a bit more radical and a bit more distinctly Scottish that can be done to ensure a bit of financial fairness across the UK, and to give Scotland a jumpstart to its economy: – create a Scottish Stock Exchange.

Edinburgh is reported to be the second largest financial centre in the United Kingdom after the City of London and, this may surprise some people, the fourth in Europe by equity assets. On top of this, it is one of the fastest growing city regions in Europe,[2] with strong rates of growth in banking and financial services at the forefront of this success. It can’t build a tram, sure, but it has a very strong European and even global reputation behind it that deserves to be built upon.

Yes, despite not having a stock exchange to revolve Scottish trade and dealing around, we are beating major cities that do – Stockholm, Vienna, Prague, Copenhagen, Helsinki, Dublin and Oslo to name a few. Even cities like Ljubljana, Bratislava, Belgrade, Podgorica (Montenegro), Skopje and Valletta have stock exchanges while Scotland does not.

We wouldn’t want to occupy an Edinburgh Stock Exchange, but we could own and mould it in the Scottish traditions of equality and fairness that would perhaps please even the most leftist of potential protesters north of the border. The opportunity to create increased activity around start-ups, business angels, joint ventures and mergers & acquisitions with such a centre in Scotland’s capital would be a golden one that could usher in a new great age for Scottish fortunes. It would also help Scotland build a can-do mentality by having one thing that we currently leave to other nations out there.

Can one agree with the #Occupy protests while still argue in favour of a new stock exchange for Scotland? I certainly hope so.

Scotland’s Plan MacB

The latest round of budget manoeuvring is seemingly already underway with the SNP firing an opening salvo towards London in a bid for the Treasury’s purse strings to be opened up a little bit more. With a belief that the UK coalition is cutting to deeply and too quickly and John Swinney afforded little flexibility in the block grant that he has available to spend, certainly this side of the Scotland Bill dawdling through Westminster right now, one can understand why the Scottish Government is keen to increase its spend. The key argument though appears to be something that is called ‘plan MacB’. I don’t know if this is a name given to the plan by the First Minister himself or a hackneyed branding by the media but, either way, it seems to involve recognition that Scotland’s economy and employment is currently outpacing the rest of the UK and that is largely down to the advanced capital spend in the current year’s budget.

Now, we can’t keep on continuing to spend tomorrow’s budgets today, that’s how we got into this mess after all, but there is certainly an argument for keeping the economy going while the volatility in the markets continues (and, despite my being on holiday, I did see that the FTSE has been battered down by 2% in this morning’s trading).

Now, forgive my basic understanding of ecnomoics but I understand that there are two opposite ends of the strategy spectrum. At one end is to spend less, hope the private sector fills the gap and save money in order to pay down the debt and/or deficit. At the other end, we could spend more and invest more in order to keep employment high, growth high and risk money that we don’t really have in order to bring in bigger tax receipts and keep the economy moving.

It’s fair to say that Scotland voted for the latter when they largely backed Labour in 2010 and they backed the latter again in 2011 when they largely backed the SNP. George Osborne and, by association, the Liberal Democrats have backed the former strategy which was working well for a while but has gone off the rails somewhat over 2011, whether you wish to blame snow and strikes or not.

Opposition politicians talk about the grudge and grievance of the Scottish Government’s positioning when they disagree with Westminster and I heard Alastair Carmichael make the tiresome soundbite ‘they’re not a Scottish Government, they’re a national embarrassment’ yesterday which is just nonsense really, just words. However, in this instance, it is surely the case that, despite limited powers, the SNP’s pointed deviation from London’s direction is to be welcomed and while there is something of a cross-your-fingers punt at play here with Salmond’s decision, a bet that backs jobs and economic stability and less cuts is surely the one to go for.

That said, I do still worry, a worry that I had before the election, that the SNP is regularly committing to spending money that doesn’t exist and when the flush is busted, London will get the blame but it will be Scots that suffer. It remains to be seen whether this will be the case in the years ahead but a narrative that involves spending more money rather than addressing the painful cuts that will probably need to be addressed at some point, while squaring off the SNP’s manifesto pledges, will be a difficult act.

However, at a broadbrush level, there is little doubt that Scotland has a preference for Salmond’s strategy rather than Osborne’s and I think it won’t be long, whether through convincing arguments, fiscal autonomy or A.N.Other, before the unfortunately entitled ‘Plan MacB’ is simply called Scotland’s ‘Plan A’.

Producerism

We’ve been spoilt this week with guest posts, and today’s is no exception. Rupert Read is a Green councillor on Norwich Council, Reader in Philosophy at UEA, and blogs here.

Rupert himselfSome of the more interesting analyses of the recent British riots and looting focus in on the role played by consumerism, acquisitiveness, materialism etc., in them. See for instance this Guardian piece on Tom Morgan’s research into the riots, and this column of my own.

And this shouldn’t be surprising. We are thoroughly used now to thinking of our society as a ‘consumerist’ society, and of ourselves as, above all, ‘consumers’. This seems to many of us quite now simply an obvious truth, and in some ways a good truth: think of ‘consumer protection’ and ‘consumer rights’ organisations, from Ralph Nader to Which?

But: what if this self-image were in fact both misleading and disastrous? The term ‘consumer’ summons up images of endlessly-open mouths, waiting to be filled with more and more stuff. It evokes ideas of us consuming the resources of the Earth. It figures us as the problem. But what if thinking of ourselves as ‘consumers’ were both to allow and facilitate the consumption of the Earth to continue (even: to mandate its continuation) and to take ourselves as individual consumers to be the primary agents of this consumption? And what if in fact we aren’t its primary agents?

The concept of ‘consumerism’ is extremely useful for those who want to sell us things. Because it then seems as though they are only doing our bidding. We are the agents: they are merely satisfying our wants and needs. This is exactly how mainstream economics characterises the fundamental nature of human exchange: it’s a matter of demand and supply. Supply exists, allegedly, only to satisfy demand.

I say that ‘consumerism’ is a piece of false consciousness, and indeed a tool for our continued and growing enslavement. The real push for us to be ‘consumers’ comes from producers. It is producers who need to sell us stuff, in order to profit – and the most effective way that they can do is to artificially create in us ever-growing ‘needs’. That’s where marketing and advertising come in. Marketing and advertising are the selling arm of the producers’ interests in our society. They are what turns us into consumers. Mainstream economics conceals this truth behind its rhetoric of individual consumers being the ‘pull’ factor at the root of economic exchange. But in fact, it is the ‘push’ factor that dominates – producers push their products at us continually, with thousands of coded messages a day. They even get us to blame ourselves for the disposal of the waste that such endless pushing inevitably creates: you wouldn’t know from listening to government and corporate rhetoric that by far the largest proportion of the ‘waste’ stream comes from corporations, not from households.

Our economy, our system, our world, is not really ‘consumerist’. It is producerist. Capitalism is a producerist system. Its most brilliant product, its greatest — its foundational — achievement and lie, is to produce individuals willing to participate in it, grateful for it, and in ignorance of its real nature. Its ultimate product, that is to say, is: consumers. It makes you and me into/as consumers… Producerism is a system – our system – the crowning achievement of which is to conceal from its workers and its bottom-level clients (those whom it changes in order to sell its products to them – to us) its own real nature, such that it becomes the accepted wisdom – and it even becomes a kind of pseudo-leftist or pseudo-ecological creed – that we live in a ‘consumerist’ society.

Producerism’s greatest product is consumerism itself, as a hegemonic ideology. ‘Consumerism’ conceals the very great extent to which producerism is hegemonic. The production of consumers, of people as desiring-machines always wanting more, with inexhaustible ‘needs’, allegedly fuelling an endless need to expand the economy (and to eat up more and more of our ecosystems in the process): this is really what producerism is all about.

So long as we think of ourselves as ‘consumers’ we are blaming the victim. What we need to do is to slough off the consumerist self-image, and instead to get clear about who is primarily to blame for the waste, the ecological destruction, the ethicless profit-maximisation, the endless commodification of our world. It isn’t us: it is ‘the market’, capitalism, profiteering producers.

Of course, they aren’t even really producers. Unlike plants, they don’t ‘produce’ anything! They just re-arrange bits of the Earth, with (ever-larger) inputs of energy. But that’s a story for another occasion. For now, it will be quite enough of a transformation, of a truth-telling, if we can overcome the idea that the degradation of the Earth is our fault.

Don’t blame yourself. Don’t blame ‘consumers’. Blame those who made consumerism: the ad men, and the ‘producers’ for whom they work.

To say it again, in conclusion: the ultimate product of our times – the ultimate work of ad-man genius — is consumerism itself, and each of us (thinking of ourselves) as ‘consumers’. Strictly speaking we live in a producer-ist, not a consumer-ist society.

It is to producerism, not ‘consumerism’, that we ought to attribute ultimate responsibility for the relevant features of this summer’s looting. Tim Morgan and his ilk ought to look into the mirror rather more, if they want to know where the buck stops…