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Hiring and Firing

May 24

Posted by Kirsty in Economy, Westminster | 5 Comments

To be denounced as “a socialist” by a venture capitalist and Tory donor certainly counts as a compliment by my reckoning.

Adrian Beecroft might not have noticed when he meant to insult Vince Cable, but given the recent electoral success of Francois Hollande in France, Elio du Rupo in Belgium and Alexis Tsipras in Greece it doesn’t seem the political trend as European economies continue to crumble is for voters to shelter in the austere arms of the right.

But it is a path the Westminster government seems intent to remain on. Described as the UK government’s “most important independent economic policy review so far” in The Telegraph, the Beecroft Report is a continuation of the coalition’s Red Tape Challenge – getting rid of all the regulations impeding the economy – moving this time to focus on employment law.

The coalition has already diminished workers’ rights, by increasing the qualifying period to two years before a worker is able to claim unfair dismissal. But in his 16 page report, Beecroft proposes a decidedly Dickensian way for us all to be in it together.

Unfair dismissal rights removed from employees and replaced by the employer’s right to no-fault dismissal, including complete immunity from unfair dismissal claims for small employers. Reducing the statutory redundancy consultation period from 90 to 30 days. Reducing rights for TUPE and collective redundancies. Introducing fees for tribunals and letting employers ignore their statutory liability in third party harassment cases. Excluding small businesses from the pension auto-enrolment. Not compelling employers that lose an equal pay case at tribunal to conduct an Equal Pay Audit. Allowing companies to choose to opt-out of flexible parental leave, right to request flexible working, and licensing for employing children.

As barrister David Renton dryly notes, “Imagine: if, by waving a magic wand, the Coalition could undo every employment law reform of the past 40 years.”

Beecroft’s assault is based on the premise that removing employment rights increases employment – an assumption even the Financial Times states is “unproven”.

But this is nothing new. A previous liberal-conservative coalition has tried this before.

In 2006, Australian PM John Howard enacted the Workplace Relations Amendment Act 2005. This legislation massively revised Australia’s industrial relations legislation, in an attempt to improve employment and economic performance through dispensing with unfair dismissal laws, reducing rights to strike through requiring workers to bargain for previously guaranteed conditions without collective representation, and significantly restricting trade union activity.

Studies into the impact of WorkChoices, the Orwellian name for these interventions, showed a climate was created “where some employers licensed to act with unilateral disdain”, with cuts in conditions without improvements in pay or conditions. More than a million Australians suffered a real pay cut due to changes in setting the minimum wage, hundreds of thousands lost annual leave, overtime and public holidays, and more than 3.5 million Australians lost protection from unfair dismissal.

But was it worth it? In the phraseology of the coalition, was it “a price worth paying”?

According to Dr Sarah Wright, decentralising wages had no impact on increasing labour productivity. Getting rid of unfair dismissal protection did not encourage employers to take on more staff, with employment growth decreasing from 3.9% in 1994 (when the protection was introduced) to 2.6% after the protection was abolished. Wages share declined from 56.2% of national income when Howard came to power in 1997 to 53.3% by 2008.

As Wright states: “The Government at the time argued that WorkChoices would create more jobs, lift wages and result in a stronger economy; WorkChoices had the opposite effect”.

Back in Britain, apparently the intervention of the Liberal Democrats will ensure Beecroft’s proposals are consigned to the filing cabinet where they’re storing all the rest of Steve Hilton’s nutty ideas.

But much like ignoring the elections of socialists elsewhere on the continent, the Tories might want to note, given WorkChoices was one of the major issues in the 2007 federal election campaign, just what happened to Howard’s government (and his parliamentary seat).

Workers’ rights should be universal. I suspect voters’ reactions to having them removed might be likewise.

Media ownership – an alternative model

May 11

Posted by Guest Blog in Economy, Media | 7 Comments

A guest post today from Dave Boyle, a writer, researcher and co-operative consultant, and author of “Good News: A co-operative solution to the media crisis“.

He has written and lectured on sport, culture, economics and co-operation, and was previously Chief Executive of Supporters Direct, the organisation that helps fans who want to take control of their clubs.

He blogs at daveboyle.net and tweets as @theboyler.

In 2009, the West Highland Free Press was sold. The new owners – one of the big 4 groups who dominate local media – made lots of promises upon acquisition, but they soon fell by the wayside in the face of their need to make a profit of 30% to service their group debts. Journalists were sacked, and then the offices were closed, with production moving to Oban (it was close enough, the senior managers felt). Sales and advertising slumped, as people saw coverage shrink, and what remained was churnalistic cutting and pasting of press releases. The community goodwill which sustained it disappeared, and the cost of delivering it to the further flung parts of the paper’s patch couldn’t be sustained. After 40 years, the paper closed in 2012, with the owners blaming a shift in reading and advertising habits as a result of the internet.

* * *

Of course, that’s not actually what happened. In 2009, the paper was bought by its employees, who all own an equal stake. The paper hasn’t been late once, and whilst it is suffering the difficulties that all businesses struggle with in recessions, its 2% margin does what it needs to do – pays the staff a decent wage to do what they do, and pays back the debts the employees took out to buy it. They’ll have paid those off in a few years and the paper will be able to think about capital investment, new staff and other happy things.

The Free Press, I was told by someone working for the BBC in the area, is at the base of the pyramid of news, keeping them honest and connected, making sure the media ecosystem is vibrant, and so having a positive impact on political performance, honesty and the rest.

When I started thinking about whether the co-operative movement had an answer to the problems of the local media, I was shocked by what I found. I’d been led to believe that dead tree media was failing in the face of the web, but in fact it looked more like a common or garden failing of the era of cheap credit. Local groups who owned papers sold them to larger groups, who started to treat them as lines on a spreadsheet, not parts of their communities. I’m absolutely convinced that better ownership models will give newspapers, and more importantly journalism, the resilience they need.

But co-operative models have other spin-offs too. They’d be accountable to their readers or their reporters (or both), depending on which type of co-op route they picked. The underpinning story of Leveson is that a news culture developed which was set at the top, with reporters powerless to stop it, aside from quitting. Readers had no means to affect change, other than registering their unhappiness by stopping reading. Which is actually what half of newspaper readers have done, but no-one ever thinks it might be because the news we have isn’t up to it; the media couldn’t be the cause of the media’s failings, could it? Better blame something epochal and impersonal like the web.

The beauty of co-operatives is that by being accountable to a wider public, they embody the public interest – the thing we want most from our media, when thinking about sustaining a civil society – far better than any privately owned concern ever could.

The final benefit is that co-ops can be understood as organisational software, which for over 150 years have been proven to unlock people’s goodwill, and their ability to take responsibility for the things that matter to them in their communities.

This speaks directly to the biggest challenge the media face, the genuine threat from the internet, which is destroying the advertising base that has subsidised news production, and so making the industry, like many others, newly precarious. Media outlets are discovering a social mission few had noted in the last 30 years of their activities, and are calling for state support and subsidy.

But the subsidy for cover price could be made good by people paying its true costs – or something more like it. That’s where co-ops come in. Paying more to make someone else richer isn’t a very sellable appeal; it works best as a by-product for owners of capital, not their sales pitch.

But people would be more interested in paying to own and run and support a paper they controlled, held to account and knew was in the heart of their communities. One which like the Free Press, wouldn’t need to make a profit per se, just enough money to cover its costs and build some reserves.

It’s an issue where the Scottish Parliament can go far beyond the timidity of Westminster. It could make local media companies into assets communities can register an interest in to buy, and provide loans to enable them to so, and give people tax incentives to use their own capital to benefit the community. It could legislate to ensure that whenever a newspaper office closed, people had the right to buy the title that used to be produced there, like the Community Reinvestment Act did in the US.

With imagination and commitment, you could do something quite extraordinary. And the beauty is that politicians should be on board. After all, who else is going to print pictures of them kissing babies?

Pickiness over Purdah

Apr 20

Posted by Kirsty in Economy, Holyrood, Local government | 25 Comments

The Scottish Government, together with Cosla, has announced plans to offset proposed cuts in council tax benefit at a cost of £40m in a new one year deal.

At present, councils administer council tax benefit, with rates and eligibility set nationally. Westminster will abolish the existing benefit in April 2013 as part of their welfare reforms, devolving a successor scheme to UK regions and nations, as well as cutting the budget of this replacement by 10%.

The Scottish Government and Cosla will plug this shortfall in 2013-14, providing £23m and £17m respectively.

Over half a million vulnerable people in Scotland are in receipt of council tax benefit, including the unemployed, pensioners, carers and people unable to work through disability. Cutting this vital support is yet another attack by Westminster on people who can least afford it, and the Scottish Government’s intervention is welcome, and necessary.

The UK Government’s welfare changes are going to have a devastating effect on low-income households across Scotland and the rest of the UK. From the ‘Granny tax’ to slashing welfare for disabled people to ending child tax credits for 73,300 Scottish families, Cameron’s government are simply cutting where they know they can get away with it.

So it isn’t news that the Scottish Government are going to announce spending where they can to mitigate the effects of Westminster cuts. I don’t think any voter in Scotland would be surprised to find out that the SNP wants to be a bulwark against slash and burn Tory policies that are going to ravage our society.

I don’t say this to negate the SNP’s announcement, in any way; my point is yet another note of disappointment with Scottish Labour instead, in refusing to see and act on the issues where their permanent stance of oppositionism achieves nothing.

Labour’s Shadow Health Secretary Jackie Baillie took a position of “try harder” with “Everybody knows the Tories are cutting too hard and too fast, but we can’t pretend this announcement plugs the gap.”

But then she frustratingly adds: “This timing of this is deeply peculiar. If the SNP were serious about supporting local councils, they would not have waited until two weeks before the council elections – flagrantly breaching purdah – to make this announcement”.

I think purdah, the convention of not announcing policy or spending during an election period, is as outdated as the colonial and sexist overtones of the word itself. Between rolling news, Twitter and a cynical electorate I don’t think government announcements have a tremendous sway over voting intentions, with an electorate that surely knows they’re trying to be bought or bribed instead of seduced.

The impact of this announcement by the Scottish Government will be tremendous on the lives and livelihoods of people who need council tax benefit to get by, and will be exactly zero on the local election results on May 3rd.

For Scottish Labour’s main comment to be that this vital measure breaches an almost-obsolete civil service standard is ridiculous.

This week the Scottish Parliament’s Welfare Reform Committee took evidence that the UK Government’s plans could result in 100,000 extra children living in poverty in Scotland. There needs to be no other statistic which shows why Scottish Government needs to act fast against Westminster cuts. This week, Johann Lamont criticised Salmond in FMQs for not announcing the withdrawal of investment by Doosan: “If he will suppress serious issues like this iconic project before the local elections, what is he capable of hiding before the referendum?”

So which announcements do Labour want in the pre-election period? Just the bad ones and not the good ones? They do know how political communication and spin… oh wait.

I want a Scottish Labour Party that opposes every ConDem cut, and cajoles the SNP through criticism and through constructive opposition to ensure Scotland becomes a country and a society where power, wealth and opportunity are in the hands of the many, and not the few. And yes, I quote Clause 4 quite deliberately. Too many Labour Party politicians have forgotten it.

When it comes to protecting the most vulnerable, sod the party politics. Sod the timing. Labour should welcome the spending, and fight the local elections on pledges and promises, not on being picky about purdah.

Isn’t it time we bought Scottish to boost Scotland?

Apr 5

Posted by Jeff in Economy | 66 Comments

I enjoyed a few days in Stockholm last weekend and, without really seeking them out, was able to enjoy Swedish brands, produce and hospitality throughout my stay. There was the salmon and meatballs from the Swedish ICA supermarkets (proudly stamped with the local area that had produced them), the Falcon and Mariestads beers that washed them down and the ‘fika’ (coffee breaks) at Sweden’s fiercely popular Wayne’s Coffee stores dotted around the city. The whole weekend involved walking past Saab after Saab and Volvo after Volvo, Swedish flags were everywhere from pots of jam on supermarket shelves to fluttering proudly in many a front garden and numerous people I walked past had on Fjällräven jackets or bags, or Peak Performance winter gear, all Swedish brands, naturligtvis.

Compare and contrast with Scotland where any old produce is purchased in tax-dubious Tesco with profits evaporating out of the Scottish economy to, well, either Cheshunt or Zug I suppose. Yes, Zug. The many beers drunk here each night are typically the Carlsbergs, Kronenbourg, Stella Artois, Carling and Guinnesses, so that’s more Scottish pounds falling out of our economy. The flights are on Ryanair and Easyjet, as there’s no longer a Flyglobespan to keep the travel money closer to home, while cars and clothes are barely ever Scottish-made or designed and you’d do well to see too many Saltires on a supermarket shelf, let alone a front garden.

Sure, we have Farmers’ Markets, Scottish restaurants (boasting Scottish produce), Brewdog, Innes & Gunn, staycations and Harris Tweed helping to shore up the local economy, but it all seems to be too much of a one-way battle at the moment, particularly when you realise how other countries out there in Europe have it.

We are regularly told to embrace globalisation, to suppress national pride and remember that too much protectionism is ultimately bad for us but, call me paranoid, I do wonder who is behind this particular insistence and whether that message is getting out beyond these UK borders. Looking at France, Spain, Scandinavia and Germany, their largely successful rebuffing of Americanism (do they even have Starbucks on the continent?) and their impressive championing of home produce and local brands, it makes me wonder if Scotland is putting itself at a distinct disadvantage by being so laissez-faire.

Of all Governments that could grasp this issue, one would think that an SNP Government would put things right.

Well, the foregoing of Scottish steel in the building of the Forth bridge in favour of Chinese steel certainly raises an eyebrow and suggests otherwise. I get that there are procurement rules that need to be followed and potential savings could allow Swinney’s budgets to go further than they would have if we’d bought materials closer to home but, if such a calculation has been worked out, I would have thought that a pre-emptive information strike would have been forthcoming. The Herald reports that as much as one third of the required steel could have been sourced from Motherwell. A no-brainer, surely? Seemingly not. It all seems to go against a direction of travel that was suggested a few years ago.

The SNP, in the last parliamentary term, had the thoroughly commendable idea of a Saltire scheme whereby shoppers would be rewarded with loyalty points for purchasing Scottish produce. The scheme was led passionately and eloquently by Aileen Campbell, now the Minister for Children and Young People. With a whopping parliamentary majority in the bag and a dearth of devolved issues to sustain itself for the next four years with, there is no reason why the SNP shouldn’t push this idea a lot harder than it is currently doing.

A saltire scheme can, by extension, mean more than simply buying Scottish produce. It can also signify less food miles, sustainable fishing methods, ethically robust farming methods, material quality and so much more, if the Scotland flag comes to signify these things (if it doesn’t so already, of course). Indeed, why this idea never took off before, from any party, really is beyond me.

I attended a wonderful presentation from the FD of a bank that I used to work for. The lessons shared then are lessons that Scotland should really learn today. He said that it is important to focus on the ‘marginal dollar’, or the ‘marginal pound’ in this instance. The old days of banking involved lending money if it meant getting a profit back, any profit, a philosophy that led inevitably to the credit crunch. These days, with fewer pounds available to lend and banks building up capital ratios, the decision-makers need to consider what they are

    not

spending their money on before they spend it. It’s basically opportunity cost with bells on and it is applicable here, not so much in terms of short-sighted profit making but rather in terms of building a balanced, local society and ensuring that it is sustainable alongside and in healthy competition with the rest of the UK, the rest of Europe and indeed the rest of the world.

So when you are standing on your local high street, when you know which Scots are secure in their jobs and which one’s aren’t and when you consider that other countries out there have a healthy balance between protectionism and globalised free markets, the key question you need to ask yourself when you stretch open your purse strings is this – where are my Scottish pounds best spent?

Keeping the Scottish pound local should be a top priority for all of us, and the Scottish Government should be taking the lead on facilitating that objective, from bridges to supermarket shelves.

Can Salmond granny Osborne?

Mar 22

Posted by Jeff in Constitution, Economy | 19 Comments

The SNP has enjoyed strong support over the past few years from two specific groups – the young and the male. Poll after poll has shown that the SNP, or quite possibly Alex Salmond in particular, has a woman problem and, possibly due to the ambition of independence, an elderly problem, problems that require to be dealt with if a Yes result is to be achieved in 2014.

We have seen a Mothers’ Day assault from the Nationalists with (*cough*) Joan McAlpine spearheading the attack. While it is sad that the provision of 600 hours nursery care is boxed into ‘female issue’ rather than ‘parent issue’, particularly when the SNP boasts of being a progressive beacon, the policy is nonetheless attractive and will go a long way to improving the party’s appeal to all Scots, including females. Similarly, a National Minimum Wage guarantee is something of a female-friendly policy by dint of such a high proportion of part-time work being taken by women. There are doubtlessly more female-friendly, recently concocted policies that an SNP activist could rhyme off on a whim.

So that’s the laydeez taken care of, what about the oldies? Well, this was always going to be a tougher challenge for Alex Salmond. How do you tempt a tranche of Scots away from the union and into a modern, fast-paced, export-driven independent Scotland when they are largely decided on the United Kingdom and/or stuck/set in their ways?

Well, perhaps George Osborne has given Salmond a helping hand there.

First things first, ‘granny tax’ is a horrendous phrase. It wilfully talks down those silver-permed, hair-netted, shed-dwelling dearies, but it is nonetheless effective, as today’s front pages testify, castigating the Chancellor for his tax cut on the elderly to pay for millionaires’ tax cuts as they do. Britain woke up today to learn, rightly or wrongly, that Osborne has shafted old people with his budget.

The First Minister’s tactics for winning independence often involve a well-rehearsed double whammy of making his party as ‘big tent’ as possible while fiercely attacking Westminster over anything and everything when they leave themselves vulnerable. He can employ both aspects over the next few months by rolling out a ‘granny friendly’ (I do apologise for how un-PC this post is) set of policies that will help to paint Osborne (and by extension the UK) as a place where the elderly are taxed to give the super-rich pay cuts while Scotland is a place where, I don’t know, free care for the elderly is guaranteed, bus passes are safeguarded and A.N.Other policy (I personally believe there is a role for the retired in schools, hospitals and colleges to provide expertise and experience on a voluntary or low paid basis; a sort of army of Non Exec Directors for the public sector and the young. It would work better if pensions were significantly more comfortable than they currently are of course).

Whatever policy Salmond may choose to entice the aggrieved victims of Osborne’s tax grab with, the First Minister may find that his independence deficit has ironically been filled in by the Chancellor trying to plug the UK deficit while keeping his right wing chums happy.