Here are a few facts to remember during the Conservative Party conference, when they will undoubtedly be determined to ram their myths about higher employment down all our throats. Over to (in this case, the very appropriately-named) Flip Chart Fairy Tales:
“Labour economics used to be easy,” lamented David Blanchflower in Monday’s Independent. He continued:
All you had to do was watch the unemployment rate and that told you most of everything. As it went up things were bad and pay weakened. When the unemployment rate fell that meant the economy was getting better and that meant pay rises. Low unemployment meant big pay rises. High unemployment meant smaller rises. Simple.
But, over the past few years, falling unemployment hasn’t led to higher wages in the UK or the US. If anything, wages have continued to fall as employment has picked up.
The picture is even stranger when you look at skills. Employers have been talking about skills shortages for some time now. Earlier this week, the UK Commission for Education and Skills (UKCES) published a paper saying that Britain is already facing a skills challenge and that the country will need 2 million more highly skilled workers by 2022.
UKCES expects the skills profile of the workforce to polarise over the course of this decade, as there is an increased demand for jobs at the high and low skill end while demand falls in the middle.
That’s not what seems to have happened since the recession though. The ONS data on skills indicate that the employment recovery has been largely a highly skilled one. This chart in the Bank of England’s inflation report shows that, while a lot of the very recent job growth has been in lower skilled occupations, most of it since 2010 has been among the higher skilled. (Definitions are based on the Labour Force Survey categories.)
I wondered how much of that might be due to the self-employed bigging themselves up in the Labour Force Survey. As the ONS said:
The nature of self-employment is such that many people manage their business and are therefore likely to state they are in a managerial role despite the level of responsibility they may have.
Using at the ONS data and applying the definitions the Bank used, I broke the same period down between employed and self-employed.
Among the employees, even more of the increase is accounted for by those in the highest skill groups, so bang goes that theory.
Take the figures over a longer period, since the start of the recession, though, and things look even more skewed.
Almost all the increase in employment since the recession has been among the more highly skilled groups. There are still fewer medium and low skill employee jobs than there were six years ago.
There’s something else funny going on here, though. We’ve just had the longest decline in wages for half a century. It looks even worse if you include the self-employed.
Since the recession, pay has fallen by about 12 percent yet, over the same period, almost all the net gain in employment has been among the most highly skilled occupational groups. So we have a more highly skilled workforce earning a lot less.
Some of this may be due to the hours people are working, or not working. All the net increase in employment since the recession has come from self-employment or part-time jobs. Last week’s figures showed a slight fall in the number of employed full-time jobs for the second month running. There are still fewer people in full-time employment than there were in 2008.
A day out with their minders: If you have ever sat amazed at decisions made by criminal court judges, rest easy in the knowledge that they come from deeply sheltered backgrounds and simply don’t know any better.
If you have ever wondered why you couldn’t get on in life, despite all the talent anyone should ever need… now you know the truth. It’s because you didn’t go to a private school and you didn’t go to Oxford or Cambridge University.
According to the Social Mobility and Child Poverty Commission, 71 per cent of senior judges, 62 per cent of senior armed forces officers, 55 per cent of top civil servants, 43 per cent of newspaper columnists and 36 per cent of the Cabinet are members of a deeply elitist “cosy club” who were educated at private schools (Owen Jones, writing in The Guardian, commented: “It is quite something when the ‘cabinet of millionaires’ is one of the less unrepresentative pillars of power”).
Also privately-educated were 45 per cent of chairmen/women of public bodies, 44 per cent of the Sunday Times Rich List, and 26 per cent of BBC executives. Where are the naysayers who claim the BBC is a Leftie haven now?
When it comes to Oxbridge graduates, the situation worsens – they have a “stranglehold” on top jobs, according to The Guardian, which adds: “They comprise less than one per cent of the public as a whole, but 75 per cent of senior judges, 59 per cent of cabinet ministers, 57 per cent of permanent secretaries, 50 per cent of diplomats, 47 per cent of newspaper columnists, 44 per cent of public body chairs, 38 per cent of members of the House of Lords, 33 per cent of BBC executives, 33 per cent of shadow cabinet ministers, 24 per cent of MPs and 12 per cent of those on the Sunday Times Rich List.
My personal belief is that this should be no surprise to anybody – I’ve known it ever since the then-headteacher at my high school proudly announced that the only sixth-former on their way to Oxford, one year back in the 1980s, was his own daughter. Even then it wasn’t about what you knew but who Daddy was.
At least it is official now.
The person who should be least surprised by these findings is Commission chairman and Labour turncoat Alan Milburn. He does not come from a nobby background but has been absorbed into the group – possibly in gratitude for a series of betrayals of his own kind that began when he entered government.
Milburn was one of the Labour MPs who embraced neoliberalism in the 1990s. His reward was a place in the Cabinet as Minister of State for Health, then Chief Secretary to the Treasury, and then Health Secretary. He was also honorary president of the neoliberal thinktank Progress, which works hard to foist right-wing ideas onto the Labour Party.
It is no wonder, then, that Milburn subsequently became the darling of David Cameron’s Coalition government, being offered a role as ‘social mobility tsar’. It is in this role that he has delivered the current report on elitism.
According to that great source of knowledge Wikipedia, Milburn’s role was about “advising the government on how to break down social barriers for people from disadvantaged backgrounds, and help[ing] people who feel they are barred from top jobs on grounds of race, religion, gender or disability”.
Nearly four-and-a-half years into a five-year Parliament, Milburn came out with this report, and I’m willing to bet that, if a similar document had been compiled before Labour left office, evidence would show that the situation has worsened, not improved.
Even now, David Cameron is probably congratulating Milburn on what a great job he has done – achieving nothing.
In fairness, even a man like Milburn could not ignore such clear findings and the report describes the situation as “elitism so stark that it could be called social engineering“.
What is more interesting about the situation is the fact that it has been described as a ‘closed shop’, a term more readily-associated with those bitter opponents of privilege – the trade unions.
A closed shop is an agreement under which an employer agrees to hire union members only, and employees must remain members of the union at all times in order to remain employed. That is definitely what the report is demonstrating and, considering the elite’s antipathy to the unions, it is further demonstration of the high-handed and corrupt attitude of these types – their belief that they should be a law unto themselves.
This in fact provides us with the only positive element to come out of this report. It gives jobseekers a decent reason for being unable to secure work – all the best jobs are being hogged by overprivileged twits!
Owen Jones’s Guardian article suggests of the situation: “In the case of the media this has much to do with the decline of the local newspapers that offered a way in for the aspiring journalist with a non-gilded background; the growing importance of costly post-graduate qualifications that are beyond the bank accounts of most; and the explosion of unpaid internships, which discriminate on the basis of whether you are prosperous enough to work for free, rather than whether you are talented.”
That is not my experience.
I did my post-graduate journalism course with help from a training scheme run by the Tory government of the time – the Department of Social Security paid for my education in that respect. My recollection is that I was one of the highest-achievers on that course; considering my future career, this indicates that there is truth behind the ‘closed shop’ claim of the new report.
My experience on local newspapers is that they are more likely to offer a way in for aspiring “non-gilded” reporters now than when I entered. While I was fully-qualified when I was hired by my first employer in Bristol, here in Mid Wales the papers have seemed happy to hire people with no qualifications at all, and train them up. There are no unpaid internships here, to my knowledge.
That being said, management practices in the press are so bad that I am constantly amazed anybody bothers trying to work for these idiots at all.
My first paper was passed from one company to another in a “gentleman’s agreement” on a golf course. It meant that I took an effective pay cut, being forced to travel 30 miles further to work and receiving a lower-than-normal pay rise when I became a senior reporter.
Another paper was doing quite well when I joined, offering healthy bonuses for all employees at Christmas. I never got to benefit from this, though, because bosses foolishly took on at great cost a ‘general manager’ who managed all our profits away and then persuaded them to sell up to a much larger firm that stripped the operation to the bone and hoovered up all the profits. Quality plummeted and (after I left) so did sales.
A third paper’s solution to declining sales was a plan to cut back the number of reporters while keeping the management structure intact. That’s right – they reduced the number of people writing the stories that sold the papers. Then they attacked the remaining reporters for the continued drop in sales and absolutely refused to entertain any notion that they might have got the situation arse-backward.
That is why I agree with the UK Commission for Education and Skills, which said that “poor management hinders UK competitiveness”, and with the comment on that report in Flip Chart Fairy Tales, that “poorly managed firms drag a country’s score down and Britain has more than its fair share of them”.
The Milburn report puts the seal on the problem: Firms are poorly-managed because the people at the top are over-privileged fools who got into their position thanks to Daddy’s money rather than any talent of their own.
As the banking crisis – caused by these very people – and the subsequent, slowest economic recovery in UK history demonstrate starkly for all to see, these private-school, Oxford and Cambridge ignoramuses are worse than useless when it comes to managing an economy.
There is nothing you can do about it while a Conservative-led government is in power because that is exactly how David Cameron and his cronies like it.
(What am I saying? Of course they like it – they and their friends are the private-school, Oxford and Cambridge ignoramuses who are cocking up the system!)
You only need to read the ‘Revolving Doors’ column in Private Eye to see how these goons lurch from one failure to another – always finding a new job after each disaster because of the Old School Tie.
It is long past time we saw a few highly-prejudicial sackings but our sad, fat ‘captains of industry’ just don’t have the guts.
Still in public ownership: According to reports, the sale of the Land Registry has been cancelled.
A little-known plan to sell off one of the government’s best-performing and self-financing organisations has been scrapped – not because of fears that a new system would be prone to corruption but apparently because it was “too complicated” and would have necessitated “new legislation”.
The change of heart – for whatever reason – has been taken by the PCS Union as a victory for its campaign against the sell-off, which included a two-day strike against the privatisation proposal, which members described as “secret”.
Commentators including Vox Political pointed out that the public consultation process received hardly any publicity at all and was closed before most of us even knew it had taken place.
Among the Land Registry’s many functions are quasi-judicial decisions on ownership and transfers, granting title and, crucially, guaranteeing legal rights on behalf of the state. This is not just of fundamental importance to homeowners, but an essential feature of our economy. The backbone of the system is its freedom from outside influence and commercial interest,” the article stated.
It quoted a report in The Guardianstating: “The agency is also currently bound by government policy on procurement, designed to assist small and medium-sized businesses to compete against the oligopoly of large suppliers. But BIS [The Department of Business, Innovation and Skills] has identified this as a problem, claiming greater flexibility in the private sector to buy goods and services. In a truly astonishing move, a government agency faces being changed into a commercial company so it can avoid the very controls the government brought in to protect small businesses.”
The article also warned of “massive job losses and office closures” and said the government had “flatly refused” to publish and fully consult on these plans.
And the plot thickened considerably when it was revealed that the Infrastructure Bill announced in the Queen’s Speech would transfer responsibility for the local land charges register to the national Land Registry – away from local councils. This means it would profit from the sale of the information – while councils fear they would still have to employ staff to do the work.
All in all, the sale was shaping up into a plan to put big business – the ‘This is Money’ article suggested private equity firms and outsourcing companies – in control of a system that had been freed of any obligation towards small and medium-sized businesses, and whose work would be done by local authorities – at a cost to the council, not the Land Registry.
For any new shareholder, it would have been a licence to print money.
The PCS has already declared its delight that the sell-off has been called off. A statement released yesterday (June 29) reads: “This would be a victory for the thousands of Land Registry staff who campaigned with industry professionals against the plans, and very welcome news for millions of people who rely on it to provide a reliable, impartial and hugely important public service.
“We want the Land Registry to work with us on our proposals to strengthen the agency in future, but serious questions must be asked of senior officials and ministers who tried to push through what would have been a very damaging and totally unnecessary sell-off.”
Indeed. First among these would be: Who paid them to do it?
According to a petition on the 38 Degrees website, the government closed – closed – a public consultation on proposals to privatise the 152-year-old Land Registry on March 20 this year.
“There has been no publicity or attempt to inform the public of this radical change to an organisation that is vital to the UK property market,” the text of the petition states.
While this is not strictly true, it would be accurate to say that the plan has not been well-publicised. Not at all.
The government put out a press release on January 23, saying a consultation was taking place on plans “to help Land Registry deliver more efficient and modern services”. That’s no way to announce a privatisation – and the plan to create a private company was only revealed several paragraphs into the text.
Why is this important?
Well, the Land Registry is one of the largest property databases in Europe, guaranteeing title to registered estates and interests in land, recording the ownership rights of freehold properties and leasehold properties where the lease has been granted for longer than seven years.
It is self-financing; its income generated by registration and search fees. You pay to access certain information.
Last month, 3,000 PCS Union members went on a two-day strike over the “secret” privatisation proposal. A report in The Guardiansaid the government had failed to explain what problem is was trying to fix, or what benefits would be gained by privatisation.
“Key among the organisation’s many functions are quasi-judicial decisions on ownership and transfers, granting title and, crucially, guaranteeing legal rights on behalf of the state. This is not just of fundamental importance to homeowners, but an essential feature of our economy. The backbone of the system is its freedom from outside influence and commercial interest,” the article stated.
Clearly, privatisation would put the Land Registry entirely under threat of outside influence and dominated by commercial interest.
Also: “The agency is also currently bound by government policy on procurement, designed to assist small and medium-sized businesses to compete against the oligopoly of large suppliers. But BIS [The Department of Business, Innovation and Skills] has identified this as a problem, claiming greater flexibility in the private sector to buy goods and services. In a truly astonishing move, a government agency faces being changed into a commercial company so it can avoid the very controls the government brought in to protect small businesses.”
The article also warned of “massive job losses and office closures” and said the government had “flatly refused” to publish and fully consult on these plans.
The petition states that “another consultation on giving the Land Registry wider powers in the control of data essential to the sale and purchase of property closed earlier with the majority of the public not being aware if it’s existence.”
It seems our attention is being directed away from another Tory-led plan to sell one of our best-performing and most efficient public services off to create more profit for private business – most notably big business, at the expense of small and medium-sized enterprises – while forcing the public sector to do all the work for nothing.
It goes on to say that the number of people receiving support under the Access to Work programme between April and June this year increased by 10 per cent on the same period last year, to 22,760. Access to Work “provides financial help towards the extra costs faced by disabled people at work, such as support workers, specialist aids and equipment and travel to work support”.
Apparently the new stats show the highest level of new claims since 2007 – 10,390; and more people with mental health conditions than ever before have taken advantage of Access to Work.
The press release also states that young disabled people can now get Access to Work support while on Youth Contract work experience, a Supported Internship or Traineeship; and businesses with 49 employees or less no longer have to pay a contribution towards the extra costs faced by disabled people in work. It seems they used to have to pay up to £2,300 per employee who uses the fund.
Isn’t it more likely that the DWP and Work Programme providers, faced with an influx of disabled people into the programme from the ESA WRAG at the end of last year, encouraged them to set up as self-employed with their own businesses in order to get them off the claimant books?
Does it not, then, seem likely that a large proportion of the 22,760 getting help from Access to Work were offered it as part of a self-employment package that also, we are told, includes start-up money (that admittedly tapers away over time) and tax credits. The attraction for WP providers is that they would earn a commission for every claimant they clear off the books in this way.
So it seems likely that a large proportion of the 22,760 may now be self-employed in name alone and that these fake firms are included in the 102,000 new businesses lauded by BIS.
Is it not logical, therefore, to conclude that these are not government schemes, but government scams – designed to hoodwink the general public into thinking that the economy is improving far more than in reality, and that the government is succeeding in its aim to bring down unemployment?
Some might say that this conclusion is crazy. Why would the government want to release information that directly indicates underhanded behaviour on its part?
The answer is, of course, that it would not. This government wants to convince an undecided electorate that it knows what it is doing and that the country’s future is safe in its hands. But its right hand doesn’t seem to know what its left is doing – with regard to press releases, at the very least.
Therefore we can say that, in trying to prove that it is competent, the Coalition government has in fact proved the exact opposite.
So someone really needs to watch what they’re saying – if they don’t want people all over the UK to come to unintended conclusions!
AFTERTHOUGHT: The BIS press release adds that the government’s ‘Plan for Growth’, published with the 2011 budget, included an aim to create “the most competitive tax system in the G20”. By “competitive” the Treasury meant the system had to be more attractive to businesses that aim to keep as much of their profits away from the tax man as possible. It is a commitment to turn Britain into a tax haven and the VP post earlier this week shows that the government has been successful in this aim. What a shame that it also means the Coalition government will totally fail to meet its main policy commitment and reason for existing in the first place: It can’t cut the national deficit if the biggest businesses that operate here aren’t paying their taxes.
Public opinion on lobbyists: Note the proximity of the words “corrupt”, “cheats” and “influential”. [Picture stolen from PR Week]
A Parliamentary Bill designed to prevent free speech by gagging political commentators, and to enable the ‘blacklisting’ of trade union members by having their names registered, has won the favour of Conservative and Liberal Democrat MPs this evening.
They voted to allow the inappropriately-titled ‘Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill’ to proceed to its committee stage after a debate today (Tuesday).
That stage will last for only a few days, during which it will be examined by a ‘committee of the whole House’ – in other words, the Bill is being guillotined; hurried through Parliament in order to get it onto the statute books after the least possible scrutiny. It seems that the government has something to hide.
Could it be the fact that the Electoral Commission, the organisation that would enforce the Bill’s provisions if it is passed into law, has made it perfectly clear that it is an attempt to stifle political commentary from organisations and individuals: “The Bill creates significant regulatory uncertainty for large and small organisations that campaign on, or even discuss, public policy issues in the year before the…general election, and imposes significant new burdens on such organisations”?
Could it be the fact that new regulations for trade unions mean members could be blacklisted – denied jobs simply because of their membership?
Could it be the fact that the measures against lobbyists – the Bill’s apparent reason for existing – are expected to do nothing to hinder Big Money’s access to politicians, and in fact is likely to accelerate the process, turning Parliamentarians into corporate poodles?
If so, then the attempt has failed, because all of these, and more, were discussed in today’s debate.
But don’t worry – we have the assurances of Andrew Lansley, Leader of the House of Commons, to keep us from losing sleep over it. The man who asked us to believe his so-called reform of the National Health Service would not lead to wholesale privatisation – and look at it now – took a telling question from Glenda Jackson, early in his opening speech.
She said the Bill “has created almost a fire-storm in my constituency. My constituents are appalled at what they regard as a gagging Bill. They wish to see a list of lobbyists that is transparent to ensure that Government cannot be bought — even though that is a debatable issue. They know that the Bill as it stands would prevent democratic voices from being heard.”
Mr Lansley’s response: “I look forward to the Honourable Lady having an opportunity after today’s debate to go back to her constituents, to tell them that the things they are alarmed about will not happen.”
Let’s hold him to that, shall we? Bear in mind that lying to Parliament is an expulsion offence, even if this particular government does not enforce it. David Cameron and Iain Duncan Smith have already defied Parliamentary convention by telling appalling untruths to their fellow MPs and walking back to their jobs; now it seems likely Mr Lansley may have done the same.
High on the list of opposition MPs’ concerns was the fact that the Bill does nothing to prevent lobbyists working directly for commercial concerns from approaching government ministers and trying to influence them.
“Recent freedom of information requests reveal that Treasury officials met fracking industry representatives 19 times in the last 10 months about their generous tax breaks, yet the public are denied any further details of that lobbying on the grounds that it could prejudice commercial interests,” said Green MP Caroline Lucas. “Is the Leader of the House not ashamed that this Bill will drastically curtail the ability of charities to campaign in the public interest on issues such as fuel poverty and energy but do nothing to curb such secretive corporate influencing?”
And Labour’s Chris Bryant had a query of his own: “Every single member of the public affairs team in-house at BSkyB will be able to visit as many Ministers as they want and every single lawyer employed by BSkyB to advance its case will be able to do so without any need to register. The only person who would have to register would be an independent consultant in a company that solely lobbies. How does that possibly afford greater transparency?”
Mr Lansley’s response: “It promotes transparency because if a representative of Sky visits a Minister in order to discuss that business, it is transparent that they are doing so in order to represent the interests of Sky. However, if somebody from ‘XYZ Corporation’, a consultant lobbying firm, visits a Minister in order to discuss somebody else’s business but it is not transparent through the ministerial diary publication who they are representing, that is not transparent. We propose to remedy that by making it transparent.”
Oh, well that’s all right then.
No it isn’t! It’s the complete opposite of all right! Where the public wanted a curb on corporations corruptly influencing the government, it is instead offering to rub that influence in our faces!
“This is one of the worst Bills that I have seen any Government produce in a very long time,” said Lansley’s shadow, Angela Eagle. The last Bill this bad might even have been the Health and Social Care Act 2012, and the Leader of the House of Commons had his fingerprints all over that one, too… This Bill is hurried, badly drafted and an agglomeration of the inadequate, the sinister and the partisan. From a Government who solemnly promised that they would fix our broken politics, the Bill will do the complete opposite.
“The Bill can best be summed up as furious displacement activity by a Government who hope that the public will not notice their problems with lobbying… they are trying to ram through their gag on charities and campaigners… so that they are silenced in time for the next general election, and they are trying to avoid the scrutiny that will show the public what a disgrace the Bill is.”
She said: “Three and a half years ago the Prime Minister, when Leader of the Opposition, told us that lobbying was the next big scandal waiting to happen. He did not tell us then that he was going to do nothing about it for over three years but survive a series of lobbying scandals and then produce a Bill so flawed that it would actually make things worse.
“Under the Government’s definition, someone will count as a lobbyist only if they lobby, directly, Ministers or permanent secretaries and if their business is mainly for the purposes of lobbying. It is estimated that that will cover less than one-fifth of those people currently working in the £2 billion lobbying industry, and the Association of Professional Political Consultants estimates that only one per cent of ministerial meetings organised by lobbyists would be covered.
“It would be extremely easy to rearrange how such lobbying is conducted to evade the need to appear on the new register at all. The Bill is so narrow that it would fail to cover not only the lobbyist currently barnacle-scraping at the heart of Number 10 [Lynton Crosby], but any of the lobbying scandals that have beset the Prime Minister in this Parliament.
“There is a real risk that the proposals will make lobbying less transparent than it is now. The Government’s proposed register would cover fewer lobbyists than the existing, voluntary, register run by the UK Public Affairs Council.”
Moving on to part two of the Bill, she said, “In one of the most sinister bits of legislation that I have seen in some time, this Bill twists the rules on third-party campaigning to scare charities and campaigners away from speaking out. It is an assault on the Big Society that the Prime Minister once claimed to revere… It is clear that these changes will have wide-ranging implications for many hundreds of charities and campaigners, local and national, large and small.
“Some of them have told us that they will have to pull back from almost all engagement in debates on public policy in the year before the election. These changes have created massive uncertainty for those who may fall within the regulations in a way that the Electoral Commission has deplored.
“The changes will mean that third-party campaigning will be restricted even if it was not intended to affect the outcome of an election — for example, engaging in public policy debate. Staff costs and overheads will also have to be included in what has to be declared — something that does not apply in this way to political parties. The Electoral Commission has said that these changes could have a ‘dampening effect’ on public debate. The National Council for Voluntary Organisations has said that the changes will ‘have the result of muting charities and groups of all sorts and sizes on the issues that matter most to them and the people that they support’.”
And on part three, which centres on trade union membership records, she said, “There appears to be no policy motive for the introduction of this new law other than as a vehicle for cheap, partisan attacks on the trade unions, of which only a minority are actually affiliated to the Labour party.
“Officials from the Department for Business, Innovation and Skills have been totally unable to explain the problem that this part of the Bill is designed to solve. During a belated consultation meeting with the TUC — it took place after the Bill had been published — BIS officials could cast no light on why part three exists at all. Nor were they able to explain the origin of these proposals beyond their oft-repeated mantra that the provisions contained in part three ‘came out of a high level meeting between the Prime Minister and the Deputy Prime Minister’. I think that revelation tells us all we need to know about the grubby, partisan nature of the measures.
“These proposals seem deliberately designed to burden trade unions with additional cost and bureaucracy from a Government who claim they are against red tape. This is despite the fact that unions already have a statutory duty to maintain registers of members. I understand from the TUC that neither the certification officer nor ACAS has made any representations to suggest that that was not already sufficient. The Government have to date failed to provide any evidence or rationale for these changes, so I can only conclude that this is a deliberate attempt to hamper unions with red tape because a minority of them have the temerity to support the Labour party.”
And she said: “I have serious concerns about the implications of these changes for the security of membership data. We all know that the blacklisting of trade union members may well still exist in our country. Blacklisting has ruined many lives and these changes could have some very dangerous implications, especially in the construction industry, where many are afraid to declare their membership of a trade union openly for fear of the repercussions.”
And Graham Allen, Chair of the Select Committee on Political and Constitutional Reform, lambasted the Bill. He said: “If someone wanted to do O-level politics on how to produce or not to produce a Bill, I am sorry, but this Bill would be an F — a fail, big time.
“Read the evidence from the Electoral Commission when I publish it in 48 hours’ time. It is damning evidence from people who should really all be on the same side to ensure this provision will happen.
“We should listen to people. Let us have some consultation; let Parliament do its job, smoke out some of the issues and attempt to resolve them. I have a fantastic all-party committee and we could do that job for Parliament, yet those things have been resolutely held at arm’s length.
“Perversely, we are trying to make a Bill that divides rather than keeps people together.”
It isn’t perverse at all. That is precisely the point of it.
Long live co-operatives: At long last, it seems the government (or at least the Liberal Democrat side of it) is offering support to the most successful and supportive business model available – and we can hope that Labour will do the same. But where are the Conservatives in all this?
Today, July 4, is officially Employee Ownership Day – did you know that?
Employee ownership means all employees of a business have a significant and meaningful stake in it. This could include financial participation but must include provision of access to organisational structures. Where financial participation does take place, there is currently no set rule on what percentage of issued shares is a significant and meaningful stake, and this is something that I believe should be changed to ensure it is worthwhile.
Employee ownership can generally take one of three forms:
Direct employee ownership – employees become individual owners of shares in their company;
Indirect employee ownership – shares are held collectively on behalf of employees, normally through an employee benefit trust; and
Combined direct and indirect ownership – a combination of individual and collective share ownership.
The Employee Ownership Association estimates that UK-based employee-owned companies had a turnover of more than £30 billion and employed more than 130,000 people in 2011. Employee-owned businesses enjoy greater staff retention, innovation and motivation than non-employee owned businesses and, in turn, these deliver wider economic benefits including increased productivity, profitability and more resilience to economic shocks.
The sector has grown by more than 20 per cent since the start of the recession in 2008; while 65 per cent of conventional businesses survive their first three years, 90 per cent of co-operatives remain in business; and 37 per cent of directorships in co-operatives are held by women, compared with 13 per cent in leading UK companies (this last point should not be relevant in this day and age, but the gender gap is quite clearly still there, so it is).
According to the government, not only will this successful model of business be easier to understand and quicker to set up after Vince Cable publishes new guidance today, but the government is also consulting the public on the possibility of providing two new tax reliefs to help indirect employee-owned businesses get themselves set up.
To my way of thinking, this seems spectacularly useful, but this is the Coalition government so there must be a catch. Right?
It seems the Department for Business, Innovation and Skills will be publishing:
Guidance for employees who want to request a move to employee ownership;
Model documentation on a move to employee ownership with accompanying BIS and HMRC guidance;
Guidance from the Employee Ownership Association explaining the different models of employee ownership; and
Guidance from Co-operatives UK on how co-operative principles and ways of working can be implemented into employee-owned businesses.
“The government is committed to supporting this business model and will today launch a consultation on providing two new tax reliefs to encourage employee ownership,” according to the press release.
“This sector has the potential to benefit the wider economy, therefore the government is seeking views from people both inside and outside the employee-ownership sector to ensure the reliefs are supportive and effective.
“The Employee Ownership Association, in conjunction with the government, has helped to organise a number of events in the UK where employee-owned businesses are opening their doors to showcase the benefits of their business model.”
Nick Clegg actually said something I can support: “The benefits of employee ownership are clear. Staff who have a stake are more motivated and are rewarded for thinking in the long-term. That’s good for business and good for families, as it means lower absenteeism and lower levels of staff turnover.” This is something I have been saying for many months; it’s as though he has been reading this blog.
He said the government has set aside £50 million per year, starting next April, to give businesses and employees an incentive to adopt employee-owned models, and will be providing Capital Gains Tax relief for those who sell a controlling stake in a company to their staff.
It will be interesting to see how many firms take up the offer; from that information we can work out whether the greed that increased bosses’ pay by 700 per cent over the last 10 years – while employees got a miserly 27 per cent rise – is still rampant.
There is also a question over whether this is the right time – the middle of the longest economic slump in recent history.
It could be!
Cable reckons “there has never been a more important time to support different ways of running a business”.
He said: “The evidence is clear that employee-owned businesses not only help us build a stronger economy, but boost the retention, innovation and motivation of their employees.”
Co-operatives UK Secretary General Ed Mayo said his organisation would be supporting today’s events by launching its own publication, Simply Buyout – an essential guide to employee buyouts and becoming a co-operative employee owned business.
The consultation on the two new tax reliefs can be found online here. This stage of it will run until September 26 this year. The government will publish a summary of the responses in the autumn, and they will help to inform draft legislation.
The first is a Capital Gains Tax relief which would apply when the controlling share of a business is sold into an indirect employee ownership structure, and the government hopes it will encourage individuals wishing to sell their business to consider it.
The second tax relief is an Income Tax and National Insurance Contributions (NICs) exemption, that would allow indirectly employee-owned companies to pay employees a certain amount every year that is free of Income Tax and NICs. There would also be an employer NICs exemption for the company.
The government announced in the March Budget that it would provide £50 million annually, from 2014-15, to support employee-ownership models and to incentivise growth of the sector.
The press release features a quote from yet another Liberal Democrat – Danny Alexander – who said: “We want to encourage greater use of employee ownership in UK businesses and want to ensure that we provide reliefs that are supportive and effective. Views are invited from both people inside and outside the employee ownership sector.”
So that’s three high-ranking Liberal Democrats speaking up for it, and no Conservatives. Interesting. Do the Blue Meanies have nothing to say in favour of the proles part-owning the firms where they work?
And what about Labour? Does the Party of the Workers support this activity? This Party member hopes it does.
It will be hard to tell from the press coverage, however.
Sometimes events coincide to create a coherent pattern, apparently by accident.
So it seemed today, with publicity surrounding the legalised corporate theft of all our images on the Internet, the part-privatisation of the government unit that has been carrying out illegal psychometric experiments on jobseekers… and the publication of my letter to the local newspapers, deploring a previous missive from a Conservative politician who was determined to parrot disproved assertions from his superiors in London, rather than treat us like intelligent creatures and try to connect on an equal footing.
These so-called “orphan works” are placed into “extended collective licensing” schemes. Any user wishing to, say, put that silly photograph you uploaded to Facebook onto a T-shirt, only has to perform a “diligent search” for the owner which, when it comes up with a blank, will allow them to proceed with impunity. And they won’t have to pay you a single penny for the use of your work.
What can you do about it? Nothing, unless you can afford costly and cumbersome legal action – despite the fact that, previously, ownership of your creation has been automatic, enshrined in the Berne Convention and other international treaties where it is still considered to be a basic human right.
Would you like to know how the Department for Business, Innovation and Skills describes the changes? Like this: “For the first time orphan works will be licensed for use; these are copyrighted works for which the owner of the copyright is unknown or can’t be found.”
That makes it seem like a good thing; in fact, it’s quite the opposite – as you’ll soon find out.
Meanwhile, we see that the government’s Behavioural Insights Team – otherwise known as the Cabinet Office’s ‘Nudge Unit’ – is being part-privatised after causing immense embarrassment to the government when it was revealed that a psychometric test it had devised for the Department for Work and Pensions to use on jobseekers was not only fake but, in fact, illegal.
The team was established after the 2010 election to – according to the government – find ways of getting people to make better choices themselves, rather than through state intervention.
But the psych test foisted on jobseekers by Iain Duncan Smith’s Department for Work and Pensions was the exact opposite of this. Firstly, workless people have been forced to take the test or lose their benefits. Next, the results have been proven to be a sham – it seems you get the same set of personality results, no matter what answers you enter – so there is no possibility of personal choice. Finally, it turns out that the whole exercise is illegal according to both UK and EU law, as “informed consent” is required before anyone takes part in a test of this kind. This is because the test has been presented as research – a “randomised control trial” (see that use of the word ‘control’? Dodgy!) according to a Cabinet Office blog.
As fellow blogger Steve Walker stated in his Skwawkbox blog on the subject earlier today (which I have reblogged), “the test itself is not the point – what is being trialled here is the supposed effect of going through it on the subjects of the trials – the unemployed people being made to participate”.
Informed consent must be given before people take part in such trials, according to the law. A person cannot be pressganged into it; they must freely make a decision to take part – written, dated and signed – after being informed of its nature, significance, implications and risks.
There is also a data protection issue.
Apparently a competition is to be held to find a business partner for the Nudge Unit. It might be hard to envisage many reputable firms seeking to collaborate with an organisation that is known to have been acting illegally, but even worse is the possibility that this will be the first of many instances where parts of the publicly-owned, operating for the benefit of everybody in the country, civil service will be hived off into private, profit-making ownership by a government of privateers who can’t wait to get their hands on all that lovely moolah – that should belong to the people, not them.
Finally, the letter I wrote last week, in answer to one from the local Conservative Parliamentary candidate, was published today in the local newspaper. It responded, with evidence-based information, to a series of groundless assertions about the bedroom tax, the benefit cap and Employment and Support Allowance, that had clearly been handed down to him from Conservative Central Office. Particularly incendiary was the parroted claim that 900,000 people dropped their claim for ESA rather than take the work capability assessment. This had been disproved and ridiculed on the same day Grant Shapps originally came out with it!
It takes a special kind of contempt for your intelligence to repeat, as fact, a claim that we all know is false. The Coalition government seems to be trying to make a living out of it.
The attitude that we see, time and time again, is “oh, they’ll take what they’re given. As long as we put a nice spin on it, they won’t even notice what’s happening to them”.
What’s happening is, of course, that our freedoms are being stolen from us, and all we’re getting in return is meaningless soundbites.
There is an election tomorrow (as I write this). You can see that certain politicians, currently in office, have no respect whatsoever for you, your opinions or your freedoms. You can’t shift them out yet.
But you can – those of you who are voting tomorrow – send a message to them and, if you have any self-respect, you will.
I hope you get the representatives – and the respect – you deserve.
Both the Labour Party and the Conservatives have unveiled new plans to revive the UK economy, in the wake of last week’s deeply unimpressive Cabinet reshuffle. Let’s take a look at them.
Labour is offering us the impressively-titled ‘Pre-distribution’ – a system which asks employers to pay their staff more money in wages, in order to eliminate the need for the government to take higher taxes and then redistribute the wealth, thereby lessening the huge differences between the benefits enjoyed by the very wealthy and the privations suffered by the very poor.
Labour leader Ed Miliband, announcing the policy, called for firms to be responsible in their attitude to wages, and to focus on the long-term.
He said it would require a major shift in philosophy for the Labour Party, as many redistribution options – for example, increasing tax credits – will not be possible when Labour next returns to power, although redistribution of tax wealth will always be necessary.
He said pre-distribution – a term he has taken from US economist Jacob Hacker – is about lifting the UK away from being a low-wage economy, because this has made us unable to pay our way in the world. We must have higher wages – and therefore our workforce needs higher skills.
In fact, this is just an impressive title for something Labour has already spent a considerable period supporting – the ‘Living Wage’. The idea is that, while the minimum wage went some way towards lifting people out of poverty, it did not finish the job.
Consider workers who do 29 hours a week on minimum wage. They do not qualify for tax credits and the amount they earn may not cover their outgoings. How do they survive?
Under the current government, the only choice is to borrow, if they don’t have savings. So they go to richer family members and ask for a handout (a humiliating experience, made worse if a person is working full-time) or, much worse, they go to loan sharks.
Recent reports have indicated that people working full-time – 37 or more hours a week – are still not earning enough to cover their overheads and are having to do the same.
The current system therefore makes it possible for people to get into phenomenal amounts of debt, and we know that debt is what caused the global credit crisis of 2008. As more and more people go overdrawn, banks will fall into trouble. The amounts might not be as much – individually – but cumulatively they become a problem.
Also, consider the working atmosphere created by the current attitude to wages. Employers have enjoyed wage increases that have multiplied their earnings by – what is it – eight and a half times over the last 30 years. Employees have seen theirs rise by something like 27 per cent – less than the rate of inflation. Therefore their earnings have dropped in real terms, and that’s why we see the problems I have outlined above.
As a result of this, workers become demoralised. What’s the point of going to work for a business where the bosses make out like bandits and the people who actually create the wealth are treated like dirt? As a result, productivity slumps. Of course it does. Where’s the incentive to produce high-quality work at high speed? This leads to a drop in sales as orders fall off due to dissatisfaction. If the trend continues, the company fails. I have seen this happen to a major employer in the town where I live. It has been forced to remodel itself, cutting back and back, but still fell into receivership and may now be under its second new owner within 10 years. The problem for managers is they never decide to cut back on the source of the problem – poor managers who take too much of the profit; they always cut down the workforce, reducing their chance of profitability still further.
This is also what happened with my last employer – a newspaper company that is struggling because it is top-heavy. I left because bosses ignore my advice and went ahead with a plan that I knew would harm sales of the edition where I worked. Sure enough, within a few months it had merged with another edition. The solution from management? Cut down on anything other than management. Ridiculous.
And, by the way, British industrialists: A saving is not a profit. If you cut back one year in order to keep your head above water, what do you do when it doesn’t carry over into the next?
Labour’s alternative would pay workers enough money to have something left over, after they have covered their costs. They will have spending power. This means they will be able to buy more, invest more – they will have breathing space, and a sense of personal worth. From that will come a sense of pride in their work and a feeling that they are valued by their bosses. Productivity improves, as does the quality of the product. Orders increase. The company flourishes and is able to employ more workers. The cycle of growth then repeats itself.
Isn’t that better?
The plan also shows up the Conservatives’ lie that cutting benefits will ‘make work pay’. Forcing people off of a benefit system that doesn’t pay their costs and into a job that doesn’t pay their costs is no solution at all and any Tory who spouts this nonsense in the media is to be mocked and targeted for unseating at the next election (in my opinion).
In contrast, the Conservatives have announced that home owners will be allowed to build large conservatories and extensions without needing planning permission. The Tories hope a home improvements boom will stimulate the economy.
Don’t laugh; they’re serious.
They haven’t realised that this will only benefit those who, firstly, own their houses; secondly, have enough spare cash to pay for what has been described as a “large” extension to their dwelling and; thirdly, want one. Apparently there are around 200,000 applications a year – that’s a drop in the ocean when you live in a country of more than 60 million.
The relaxation of planning rules will only last until 2015, because the Tories want to persuade homeowners to get on and build these extensions as soon as possible – again, failing to realise that we are in the middle of a time of fiscal austerity, which they are enforcing, and we simply don’t have the cash.
Therefore, the solution proposed by the government is for private individuals to borrow more, in order to fund the scheme and pay the builders. Isn’t that what the Tories have been mocking Labour for proposing on a national level – even though Labour isn’t currently proposing that?
Also, what about the 20 per cent VAT that goes on home improvements?
And what about the increased aggro between neighbours, as our quiet leafy suburbs get turned back into construction sites?
So the choice seems to be: Pay workers more, see increased long-term productivity and less concern over debt; or get homeowners to put themselves in debt by borrowing to pay for home improvements they probably don’t need and create a short-term boost in the construction industry.
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