Tag Archives: redundancy

If this is why the Bank of England is making the UK recession worse, it stinks

The Bank of England: it is not your friend.

One of the strangenesses of running a political website as a commercial endeavour is that one is reliant on the articles to pull in advertising revenue, and this means more popular items take priority.

More meaningful items then take a back seat until such time as they can be funded by the other material – but fortunately, today, lots of people are enjoying the Suella De Vil song, so I have an opportunity to look at why the Bank of England is hiking interest rates and worsening the UK recession.

I’m taking the information from Professor Simon Wren-Lewis’s Mainly Macro article (link below), which suggests the most likely reason I’ve seen so far – and it isn’t to stop energy price inflation, nor is it to stop food price inflation.

No – it’s to stop wage inflation. The aim is to impoverish you by increasing the difference between what things cost and what you can afford.

Here’s Prof Wren-Lewis:

A UK recession will do almost nothing to bring energy and food prices down. Instead what has worried the Bank for some time is that the UK labour market appears pretty tight, with low unemployment and high vacancies, and that this tight labour market is leading to wage settlements that are inconsistent with the Bank’s inflation target.

You can see the reasoning behind this, just with the forthcoming strike by the Royal College of Nursing, that is calling for a 17 per cent pay increase. The Bank’s inflation target is just two per cent, and has been for many years.

The article continues:

Earnings growth is around 7.5% in the wholesale, retail, hotels and restaurants sector, about around 6% in finance and business services and the private sector as a whole.

Domestic firms are under no obligation to compensate their employees for high energy and food prices, over which they have little control and which are not raising their profits. As a result, if firms were free to choose and there was abundant availability of labour, they would offer pay increases no higher than the increases we saw during 2019.

Average private sector earnings running at around 6% are not a problem for the Bank because it is anti-labour, but because it believes wage growth at that level is inconsistent with its inflation target of 2%… Earnings growth will slow as the UK recession bites.

What this means in layperson’s terms is that, by increasing interest rates, the Bank intends to make it harder for many firms to survive in the hope that they will lay off staff, forcing more people back onto the labour market.

Then, firms would be able to offer whatever wages they wanted (above the minimum, of course) on a take-it-or-leave-it basis, and if you couldn’t make ends meet, then that would be your problem.

It is a premeditated, deliberate attempt to worsen poverty for millions upon millions of UK residents.

I wonder whether this is another unintended consequence of Brexit? When the UK was obligated to accept workers from the European Union, employers benefited from exactly the kind of loose labour market that allowed them to offer subsistence, or lower-than-subsistence, wages.

Now those workers have gone and employers are forced to take on native workers, the pendulum has swung the other way. It’s a thought, isn’t it?

Prof Wren-Lewis goes on to explain that developments in economic thinking mean that the tight labour market should not require an interest rate hike to “correct” it (his word).

nowadays macroeconomists believe it is possible to end a boom [in this case an over tight labour market] and bring inflation down without creating a downturn or recession, because once the boom is brought to an end a credible inflation target will ensure wage inflation and profit margins adapt to be consistent with that target.

The lags in the economic system mean a central bank should stop raising rates while inflation is still increasing. If a central bank believes it will lose credibility by doing this, and feels it has to continue raising rates until inflation starts falling, this will lead to substantial monetary policy overkill and an unnecessary recession.

If that is why central banks in the UK and the Euro area keep raising interest rates as the economy enters a recession, then the truth is central banks are throwing away a key advantage of a credible inflation target. Credibility is not something you constantly have to affirm by being seen to do something, but something you can use to produce better outcomes. Furthermore central banks are more likely to lose rather than gain credibility by causing an unnecessary recession.

Of course raising interest rates to 3% is not enough on its own to cause a prolonged recession. Probably more important is the cut to real incomes generated by higher energy and food prices, which is enough on its own to generate a recession. On top of that we have a restrictive fiscal policy involving tax increases and failing public services. Both together should be more than enough to correct a tight labour market. To have higher interest rates adding to these already large deflationary pressures seems at best very risky, and at worst extremely foolish.

This will affect you all.

Sadly, as I indicated at the top of the article, only a few of you are likely even to have read any of the information here – certainly not to the end. So very few of you are likely to make any preparations for it.

For the rest, the next few years are going to be very difficult indeed.

Source: mainly macro: Why is the Bank of England making the expected UK recession worse?

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Tories cut redundancy pay for 91,000 civil servants during cost of living crisis

Another Tory rip-off: the government wants to reduce the civil service by 91,000 employees – AND cut their redundancy pay by nearly 26 per cent while doing so.

How many levels of wrong is this?

At a time when the cost of living is ramping up steeply, with huge inflation and astronomical energy prices, one might expect any national government to need all the civil servants it can have, to administer measures to ease the burden on the population.

Instead, the Tories are cutting the UK’s civil service by 91,000 people.

But that’s not all.

After giving civil servants a derisory two per cent pay increase – in reality a massive pay cut due to the 9.4 per cent inflation rate – the Tories are adding insult to injury by cutting redundancy pay by more than a quarter (25.9 per cent).

Their rationale for doing this adds insult to (double) injury.

They reckon in a time of “high national debt and increasing cost pressures” the Civil Service Compensation Scheme should be “affordable” to the taxpayer – who has nothing to do with it.

Money for the scheme is created by the government. We pay taxes to keep inflation within reasonable boundaries (according to at least one economic theory) but with inflation almost entirely dictated by energy prices and Brexit-related shortages, taxation doesn’t make that much difference any more.

It’s just another silly “divide-and-rule” tactic, trying to turn us against civil servants by saying paying them a decent redundancy package would be an attack on people who pay taxes.

More details of this sorry story are available here.

The good news is that, when the Tories tried to cut civil service redundancy pay in 2017, it was forced to stop when unions successfully took court action to protect their members.

The PCS union has announced that it will fight the current proposals as well.

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Now the Covid crisis is being used to lever working disabled people out of their jobs

It seems people with disabilities have no safety net when threatened with losing their job because of measures they’re told to take, just to protect themselves from Covid-19.

Was there an underlying prejudice against people with disabilities all along, or did the Tories put it on the national agenda?

Until 2010, This Writer thought the UK was moving in the right direction, discarding discrimination against ethnic minorities and people with physical impediments.

But racism and disablism have skyrocketed since the Tories came back into office and I don’t know whether they have instigated it or merely allowed bigots across the UK to express what they felt all along.

Covid-19 seems to have brought this ugliness into its own.

The latest outrage is the revelation that a quarter of working people with disabilities are likely to lose their job – because of safety measures they have been told to take, to avoid infection.

This rises to 37 per cent of those who said their disability had a large impact on their day-to-day life.

And half of those shielding because of extreme vulnerability to the coronavirus risk redundancy.

It seems employers see people with disabilities as an easy cut to make – especially in an atmosphere where unfair dismissals are more likely to go unremarked.

And people with disabilities going onto benefits face an uphill struggle getting benefits – even if they’re not claiming sickness/disability benefits.

The five-week wait for Universal Credit is bad enough for able-bodied people, remember.

The Tory government isn’t particularly bothered. Anyone can seek an employment tribunal against unfair dismissal.

But how long is that going to take? And what will they do in the meantime?

Source: Parents, carers and disabled people in UK ‘twice as likely to lose job’ | World news | The Guardian

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What do the Brexit cheerleaders have to say about Jaguar Land Rover job losses now?

Road to ruin: A Land Rover Discovery. Last time I used this shot I said it was presumably on its way to Slovakia, leaving a blasted wasteland where its Midlands manufacturing base once stood. It would be nice to think that was a pessimistic opinion – but the outlook is not good.

I seem to recall some Vox Political readers saying this wouldn’t happen.

“How many times are we going to get empty threats from rabid remainers?” asked resident Brexiteer Barry Davies.

Chris Cooke Snr proclaimed: “We’ve had over 45 years of our industries being wrecked by EU rule. Some may cut and run after Brexit – but I seriously doubt it. On balance a UK free to trade across world markets would rebuild our industries.”

Oh really?

Here‘s the BBC:

“Jaguar Land Rover (JLR) has confirmed it is cutting 4,500 jobs, with the substantial majority coming from its 40,000 strong UK workforce.

“The firm has … complained about uncertainty caused by Brexit.

“The firm, which is owned by Indian conglomerate Tata, made a £90m pre-tax loss in the three months to September 30, a major reversal from the £385m profit of the previous year.”

In fairness, we’re told most of the redundancies will be in office roles as the company wants to simplify its management structure.

But the cuts come on top of last year’s 1,500 job losses, meaning 6,000 will go in total – so far.

What next?

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Theresa May’s evil choice for schools: They’ll have to axe staff to afford teacher pay rises

Theresa May: She may think she’s the Joker but this gag isn’t funny at all.

Theresa May seems to have modelled her pay offer to schools on the choices presented by the Joker, as played by the late Heath Ledger, in the movie The Dark Knight.

Her government has promised teachers a pay rise of up to 3.5 per cent, providing £508 million to pay for it.

Head teachers have made it clear that this offer is not enough. They say they will have to cover the first one per cent of the pay offer from their own budgets – which won’t be able to cope.

So, if their teachers are to enjoy the increase, heads will have to cut working hours (meaning there will be no financial benefit to teachers and their workload will increase) or impose redundancies (meaning teachers will be better-paid but their workload will increase hugely).

That’s the kind of choice offered by the Joker in the movie mentioned above; the only way to win something valuable is to lose something valuable.

An example from the film is when the Joker rigs explosives on two ferries, one containing citizens and the other transporting criminals, and tells the passengers that he will destroy both boats unless one blows up the other; anyone taking that offer would survive – by becoming a mass murderer.

Mrs May’s offer to schools may not seem quite so extreme – but it could be argued that she is deliberately attacking our nation’s future.

The school pupils of today are the doctors, nurses, teachers, industrial leaders, scientists and thinkers of tomorrow. If their teachers are worked into the ground, how are they going to help these kids reach their full potential?

They won’t.

And that is what Mrs May wants – because she thinks it is more important to maintain the artificial advantage that the rich have over the poor than it is to give everyone in the UK an opportunity to succeed.

Schools face having to axe staff to afford teacher pay rises, ­heads have warned.

Under a recent Government pay settlement, teachers will get up to 3.5% extra, which ministers have boasted is “fully funded” through a £508 million grant.

But an open letter from four union chiefs to PM Theresa May and Chancellor Philip Hammond says schools must cover the first 1% from their own budgets, already at “breaking point”.

Without extra funding, they fear schools will have to cut working hours or make staff redundant to afford it.

Source: Schools ‘will have to axe staff to afford teacher pay rises’ warn heads in open letter – Mirror Online

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If employment is at its highest rate since 1971, why are wages and the tax take in the doldrums?

Full-time employment is on the rise in the UK [Image: SolStock/Getty Images].

I have a doubt about this employment miracle the Tories claim.

We’re told employment is at its highest rate on record, but wage rises are below inflation, and what is the tax take?

If the Treasury isn’t in receipt of more money, then the employment figure means nothing.

We know productivity is lagging behind the other G7 countries.

And what about the factory closures that have recently been announced?

I asked Labour’s Shadow Work and Pensions Secretary, Debbie Abrahams, what it all meant.

She responded:

So we’ll have to wait and see.

Keep an eye on Vox Political. I’ll keep you informed. 

The pressure on employers to find skilled staff appeared to push up wages by more than expected in November as UK job vacancies reached a new peak.

City economists had expected the uncertainty surrounding the Brexit talks to limit wage rises, excluding bonuses, to 2.3%, the same rate as in October, but they increased to 2.4% in the three months to November. The figure rose to 2.5% when bonuses were included.

Vacancies hit the highest level since comparable records began in 2001, up 60,000 on a year earlier at 810,000.

Further indications that the labour market remained in rude health could be found in figures for the total number of people in employment, which hit 32.2 million, the highest on record.

The Office for National Statistics also said the employment rate, which measures the proportion of 16- to 64-year-olds in work, reached 75.3%, a figure that was higher than for a year earlier and the joint highest since comparable records began in 1971.

Source: UK job vacancies and numbers employed both hit record highs | Business | The Guardian


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There is a better way for BAe Systems – but will the Tory warmongers understand?

A member of staff works in the cockpit of an aircraft on the Eurofighter Typhoon production line at the BAE Warton plant near Preston [Image: Phil Noble/Reuters].

https://twitter.com/AaronBastani/status/917694135041216513

The article, to which Aaron Bastani links in his tweet (above), makes interesting reading – although it is a bit long-winded.

It proposes a future for the company in which it won’t have to cut jobs, but may devote them away from building weapons and into peacetime technological pursuits. For the UK’s biggest exporter, it seems this is far preferable than the collapse and ruin presaged by the announcement of 2,000 job losses today (October 10).

The Tory government will do nothing, of course. Tories no longer understand industry, if they ever did. Their industrial strategy, from the mid-1970s onwards, has been to destroy industry in order to impoverish working people and undermine the trade unions.

Here’s the relevant part of the Open Democracy article:

BAE Systems should be taken into public ownership, with tens of thousands of engineers and fixed capital re-directed towards renewable energy industries, automated civilian avionics and vehicles, space transport and climate change solutions – specifically around flooding and desertification.

Right now BAE has 33,000 employees across the UK, 70% of which are engineers or work in engineering-related areas. That is an immense amount of talent that is currently deployed to, among other things, build weapon systems to be used against civilian targets in one of the poorest countries in the world. As well as Saudi Arabia, other BAE clients include the UAE, where the company sells surveillance systems and, potentially Qatar, which is still looking to buy Typhoons despite recently purchasing a large number of French Rafales.

Rather than create weapons for some of the most authoritarian regimes in the world, while also depending on British defence budgets only set to shrink and the renewal of a nuclear deterrent ill-suited to the modern world, the resources and skills of BAE Systems, especially given its comparative edge in avionics, vehicles and energy architecture, would be instead be deployed in fields of importance to Britain and the wider world. New flooding solutions, crucial as Britain adapts to climate change, would not just be for the domestic market but for export too. The same is true for dealing with desertification, a major issue not only for North America, the Middle East and Africa, but Europe and Australia.

Then there are the fields of renewable energy, automated transport, AI and robotics.

Contrast this with the bleak news of the company’s announcement today:

Britain’s biggest defence contractor, BAE Systems, is to cut nearly 2,000 jobs in a significant blow to the UK’s manufacturing sector and the government’s industrial strategy.

The company, which makes the Eurofighter Typhoon jet and Britain’s nuclear submarines, said on Tuesday that up to 1,400 jobs would go at its military aerospace business over the next three years, along with a further 375 in maritime services and 150 at its cyber-intelligence business.

BAE aims to achieve the cuts, which are due to be implemented by 1 January, through voluntary redundancies where possible. It employs 83,100 people worldwide, including 34,600 in the UK.

There is a way forward.

If these job cuts go ahead, then you will know that they are happening because BAe – and the Conservative government – have ignored the opportunity to open the company up to new markets. For the Tories, that would be an unforgivable crime.


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Tube strike is about maintaining good service. Don’t let selfish people tell you it’s about selfishness

The London Underground is in a mess due to cut by the Conservative Government and poor management by Boris Johnson Conservative administration.

Sadiq Khan, the current (Labour, he says) Mayor of London appeared on Radio 4, to oppose the strike, but is arguments do not ring true.

His administration may be working to limit the damage but the service is suffering now, and changes imposed by Johnson and the Tories may be hard to reverse.

The strike was called because of ticket office closures and the loss of 800 staff members under Mr Johnson. Mr Khan could only say 200 jobs had been restored, and his comments about ticket offices were limited to saying he had accepted the findings of a review by Travel Watch. He did not say what those findings were.

Meanwhile, Tube staff are striking because the service is not safe. They say the cuts, along with “brutal” unilaterally-imposed changes to working practices that have been imposed by Transport for London (TfL) have led to “a further exodus of staff from the service”.

That is their right; anybody can walk away from a contract if the other side imposes unfair conditions.

And it doesn’t take genius to work out that they are right to do so.

The level of support for the strike among those who remain – only 10 stations are open, it has been reported – is evidence of this.

The Tube system needs restoration now – not talk about doing it tomorrow (maybe).

Claims that the strike is causing misery for a day show a lack of understanding that the aim is to prevent misery on a regular – or indeed permanent – basis.

They are the claims of the selfish, the narrow-minded, and the ignorant.

Some critics are even claiming that Tube workers have decent, well-paid jobs and should not, therefore, be striking.

The only reason any employee has a decent, well-paid job, is union action – including strikes. And in this case it is clear that striking remains the only way to protect pay and conditions that the Conservative Party has tried to erode.

It’s time some of the people catching a bus today also got a clue.

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The depth of corruption in the Conservative Party’s new, privatised health system

n4s_nhs1

You can’t call it a National Health Service any more, can you?

The corruption imposed on the system by the Conservative-led Coalition government has reached new depths with the award of huge contracts to companies that donate to the Conservative Party, and plans to stop the corrupt re-hiring of executives who had already received large payoffs – after this has already happened.

Especially to blame are the Liberal Tory Democrats who made sure that this desecration could take place by supporting it in Parliament.

Did anybody else find it laughable when the Telegraph reported plans for the Queen’s Speech this year to include stopping highly-paid civil servants and NHS executives from receiving large redundancy pay-offs and then being re-hired only a few months later?

The plan, apparently part of the legislative programme to be announced by Her Majesty tomorrow (Wednesday), is effectively fixing the barn door after the chickens have come home to roost; already thousands of NHS executives who were sacked from their jobs in the pre-Health and Social Care Act service have been re-hired – at great cost to the taxpayer – into the new one.

The new law won’t be able to stop any of them from doing what they have already done, and Treasury Financial Secretary Nicky Morgan’s claim that “We must make sure hard-earned taxpayers’ money is not being squandered” is meaningless.

Meanwhile, health companies have been rewarded with ‘NHS’ contracts worth almost 1,000 times as much as the money they have donated to the Conservative Party.

According to the Daily Mirror, Circle Health has been given £1.36 billion of health work after investors gave £1.5 million to the Tories; and Care UK – who bankrolled former Health Secretary Andrew Lansley with £21,000 during the seven years he was secretly working on the Health and Social Care Act while Tory leaders were denying any plans for the top-down reorganisation it would authorise – has won £102.6 million in contracts and its chairman John Nash has been made a lord, in return for a £247,250 donation to the Tories.

Shadow Health Secretary Andy Burnham was right to say, “Nobody gave David Cameron permission to sell the NHS to his friends.”

Nobody did – Cameron lied about his plans for the NHS throughout his 2010 general election campaign, and then failed to win a mandate from the electorate.

But this is what David Cameron’s NHS was always going to be – a gravy train for rich asset-strippers.

The only losers are the sick – and Tories couldn’t care less about them.

Follow me on Twitter: @MidWalesMike

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UKIP: They don’t like it up ’em!

UKIPpolicies

Was anybody else astonished to read, on Facebook this afternoon (May 12), that police had visited a person who had posted a version of the above meme on Twitter, and told said person to remove it as UKIP had made a formal complaint?

The truth of the matter became irrelevant very shortly after, when the image was merrily shared and re-shared across the social media by those of us (let’s face it; a version is directly above these words. VP is as much a part of this act as anyone) who weren’t going to put up with even the rumour of such heavy-handed behaviour.

Shortly afterwards, the referenced version of the meme appeared – it’s what you saw when you loaded up this article.

Readers with good taste in comedy will recognise our headline as a catchphrase of Lance Corporal Jones in Dad’s Army, made with reference to the German Army and to the “fuzzy-wuzzies” – as Jones refers in casually racist (yet of-the-times) terms to his erstwhile opponents when he was fighting colonial wars in South Africa. Although they’re not likely to enjoy being ranked alongside either of Jones’s targets, UKIP supporters proved that they really don’t like it up ’em – and responded with fury.

“This is not doing the right thing by Britons by posting propaganda rubbish like this one,” wrote one outraged ‘Kipper’.

Propaganda?

That would be “misleading information that is systematically spread”, according to the VP dictionary. Thank goodness we can look up the websites referenced on the image and make up our own minds! But it should be noted that anyone trying this should hurry – some of the sites mentioned have already been changed.

For example, VP is informed that Amjad Bashir has changed his website to remove the reference to maternity pay and other employment rights. Fortunately, another member of our online community had the presence of mind to keep a copy of the site as it was before the edit, and created an image that demonstrates the differences.

140512amjadchanges

The point is confirmed on UKIP member Keith Rowe’s website, where item 3.2 states: “UKIP proposes to vastly simplify this legislation. It would be up to each employer to decide whether to offer parental leave.” That would mean the end of Statutory Maternity Pay.

Further down, Mr Rowe confirms UKIP’s plan to raise Income Tax for most of us, while also cutting it for the richest people in the UK: “The cornerstone of UKIP’s tax policies is to roll employees’ National Insurance and basic rate income tax into a flat rate of income tax of 31 per cent for all sources of personal income (except pension income).”

On holiday entitlement, Mr Rowe tells us: “UKIP would put an end to most legislation regarding matters such as weekly working hours, holidays and holiday, overtime, redundancy or sick pay etc.”

UKIP supporters would argue strongly that the party does not intend to speed up privatisation of the NHS, and Mr Rowe’s website expends a large amount of verbiage trying to obfuscate what is intended. But the gist is here: “UKIP will abolish the complex competitive tendering rules which currently make it very difficult for smaller companies to bid; as a result of which, a small number of large companies have a disproportionate share of NHS business. In addition, the UKIP will require the NHS to use people with commercial experience to negotiate with the private sector.” This means that UKIP would continue the Coalition policy of inviting private companies to bid for the right to provide NHS services, making a profit from the taxpayer in doing so.

The section entitled ‘Looking Ahead’ suggests worse to come: “UKIP would like to offer people a choice of how they wish their health care to be delivered… We believe that other models are worth considering to see whether lessons can be learned from abroad… which appear to offer more choice, shorter waiting times and objectively better health outcomes at comparable cost and have been praised for their lack of bureaucracy.”

On climate change, the UKIP leaflet referenced in the meme states: “UK’s cuts in CO2 emissions will have no meaningful effect on global climate and … the Climate Change Act’s unilateral action is in vain”. Further on, it states: “We criticise the EU for creating serious market distortion by favouring some low-carbon technologies (wind, solar) over others (e.g. nuclear). There are, however, some clear priorities: gas, nuclear, and coal.”

UKIP’s own ‘issues’ page makes it clear that the party will “remove the UK from the jurisdiction of the European Court of Human Rights” (even though this would be a travesty – the UK was instrumental in setting up that institution and wrote much of its rule book).

Coming to marital rape, if the reference in the meme does not provide help, then try this link. It shows that, of the 14 MEPs who voted against ‘Combating violence against women’, which included “to recognise sexual violence within marriage as a crime and to make rape within marriage a criminal offence”, nine were members of UKIP. Thanks to Rachel Harvey (on Facebook) for this information, and for sourcing the image on maternity pay.

Ms Harvey adds: “The ‘no’ vote to rape within marriage being a criminal offence was also a no vote to making FGM [female genital mutilation] illegal. Such lovely blokes these UKIP MEPs.” Indeed.

Admittedly, policies are mentioned for which proof is not directly available at the time of writing (although any help with this would be appreciated). Nevertheless it should be clear that the image at the top of this article is absolutely not “propaganda rubbish”.

It is a genuine attempt to alert the British voting public to the true nature of the United Kingdom Independence Party.

And no – I didn’t create it.

Follow me on Twitter: @MidWalesMike

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