On the road with Austerity Uncovered

 

On the road with Austerity Uncovered

 

This morning STUC’s fleet of two minibuses set off on the first leg of its Scotland-wide tour as part of the TUC, Welsh TUC and STUC campaign to highlight the impact of austerity on people across the length and breadth of the UK.

 

Over the next few months we can expect to hear plenty of optimistic talk from George Osborne and the Coalition Government about possible economic improvement and very modest growth and a slight improvement in the employment market are of course possible – and to be hoped for.  George Osborne will say that things are getting better, but that’s not how it is going to feel for the person in the street.  Where there are any new jobs they are insecure, often low paid and part-time.  There is genuine fear over benefit cuts, the impending full introduction of Universal Credit and of course the hated bedroom tax.

Accompanied by journalists and taking footage to be included in a TUC documentary, STUC will be in many of Scotland’s towns and cities over the next week, inviting people to tell their story, whether it is personal or part of a community story of opposition to cuts and austerity.

 

On the bus today we have the leaders of some of Scotland’s largest trade unions.  Pat Rafferty of Unite and Harry Donaldson of GMB as well as people from a wide range of other unions.  Activists from Unite Community – a new initiative from Unite the Union - will explain the benefits of joining unions (at low cost) for those who are unemployed or for other reasons not able to access traditional union membership.

 

Musical accompaniment, sponsored by the Musicians Union will be provided by the now legendary busker, Citizen Smart. His Bedroom Taxprotest song has over 160,000 youtube hits and his three-hit CD is now being sold across the country and through itunes to support the work of local Anti-Bedroom Tax campaigns. People wanting to support anti-bedroom tax campaigns in Scotland should download the song!

 

Most importantly we will be talking to Glasgow communities. 

 

We will meet the folk in Clydebank Unemployed Workers Resource Centre who are trying to hold together a community which still feels the ravages of previous recessions, let alone the current one.

 

We will visit, talk with and deliver packages to Maryhill Food Bank, one of dozens which have been created across Scotland.

 

We will meet with residents and family carers from those opposing the closure of day care centres and Glasgow.

 

And we will meet campaigners in Possilpark who are fighting against the Bedroom Tax and supporting those who are at the sharp end.

 

Check out the austerity uncovered website for latest progress! http://www.thereisabetterway.org/austerity-uncovered/nationwide-tour

or the TUC page at http://austerityuncovered.org/

or on twitter #austerityuncovered #stuc

or facebook www.facebook.com/forabetterway

 

A Wealth of Nonsense

At the end of last week, Twitter got very excited over this ONS video on the Wealth of the Wealthiest Households 2008/10; a video that was actually released back in December 2012.

Yes Scotland blogged as follows:

“So despite generating more than our fair share of UK wealth, the Westminster system means that we get substantially less than our fair share of the benefit…We are near the top of the league for wealth generation but, according to the Office for National Statistics, we are at the very bottom of the league when that wealth gets shared out. This is a direct result of policies taken forward, year after year, by Westminster. And what it means is that families like yours have lower incomes than they should, higher levels of debt and smaller pensions”.

This line was reiterated in another blog published the following day:

“Yesterday we published a video from the Office for National Statistics showing, among other things, the unequal nature of wealth distribution under Westminster, with Scotland sitting at the bottom of the 'wealth distribution' league (while we sit near the top for wealth generation)”.

I’ve got a lot of time for Stephen Noon, the author of these blogs, but on this occasion he’s writing undiluted drivel. Before explaining why, let me make two things very clear: first, the ONS video lays bare an unambiguously disgraceful state of affairs. It is socially unacceptable – and detrimental to long term economic development - that the bottom 50% of households own only 9.9% of total wealth while the top 10% possess 43.8%. Second, wealth inequalities are indeed largely the result of Westminster policies; it is therefore perfectly reasonable for Yes Scotland to draw attention to UK wealth distribution (although it would be nice to hear something of a developed policy agenda for greater redistribution under independence. And, yes, policies like the Council Tax freeze do exacerbate wealth inequality).

What isn’t acceptable is to use the ONS video as the basis for claims about Scotland’s position relative to the UK that simply don’t stack up.

Stephen claims this graph shows Scotland ‘sitting at the bottom of the ‘wealth distribution league’:

It shows no such thing. Rather it shows the share of Scottish households holding sufficient wealth (over £967,000) to make it into the top 10% of the UK’s wealthiest households. Unless they're supportive of upwards redistribution, it's perplexing how anyone can conclude that having a smaller share of the richest households leaves Scotland 'at the very bottom of the wealth distribution league'! The graph provides but a small part of the whole story on ‘wealth distribution’ and it tells us precisely zilch about total wealth owned in Scotland.

What it does imply is that Scotland has a flatter wealth distribution than the other nations and regions of the UK. This is a good thing – although the aspiration should be to make it flatter still. It’s just plain silly to fret about rising wealth inequality and then complain that Scotland has too few rich households.

Stephen then asks ‘And what does it mean in terms of actual money in your pocket?’ The answer is, again...nothing. This ONS work isn’t about ‘money in your pocket’. Rather wealth owned is measured over 4 categories: private pension wealth, net property wealth, financial wealth and physical wealth.

But we do have decent information on ‘actual money in your pocket’. Here’s a graph compiled from the latest regional stats on Gross Household Disposable Income (GHDI):

Scotland’s average GDHI (£15,654) is just below (97.6% of) the GB average of (£16,034) and higher than all the following English regions: North East, North West, Yorkshire and Humber, East Midlands and West Midlands. Wales is only 88.1% of the GB average and that's despite having more rich households.

And we also know that Scotland has relatively low levels of financial debt and a flatter distribution of wages:

ONS research published today on Total Household Wealth by Region and Age Group doesn't make pleasant reading, particularly in terms of generational equity: see relative shares of 25-44 yr olds and 45-64 yr olds living in households with wealth of less than £50,000/more than £500,000.

However, there is nothing remarkable about Scotland’s relative performance. Indeed, the evidence generally confirms Scotland’s flatter distribution of wealth. Scotland has less than GB average of households with children with total wealth of under £50,000. It has relatively more households in the middle wealth brackets and less in the £1m or higher category.

It's good that the shocking levels of economic inequality across the UK are now being discussed as part of the Scottish constitutional debate - hell, we might yet get onto labour market policy! - and it's understandable that Yes regard this as fertile territory. However there's no problem so great that it cant be exaggerated and distorted and any opportunity will be squandered if the assessment of Scotland's relative position is as spurious as that presented in these blogs. Coming on the back of this ludicrous SNP 'research', it's been a bad few days for Yes on the economics of independence. 

Finally, it’s got to be worrying that either campaign can stick analysis of this quality on the front page of their website without generating any critical comment whatsoever in the mainstream media?  

Stephen Boyd - STUC

Longing for the Good Society

"If you want to build a ship, don't drum up people to collect wood and don't assign them tasks and work, but rather teach them to long for the endless immensity of the sea."

- Antoine de Saint Exupéry

On Saturday 8th June in Glasgow , Compass are holding an event to which all are invited to have a conversation about ‘ A Good Society for Scotland’ . We hope that any open minded  people from any political party and none will come along because as we know politics is too important to be left to the politicians.

We have just lived through an age dominated by the ideas of individual consumerism and selfish competition so its perhaps understandable and justifiable that those that disagree with this story of our society have many grievances.

Stating what we don’t want is important and exposing the injustice and failures of current political, social and economic arrangements a foundation for change. 

But for those who want to transform Scotland much more is required. We have to begin to tell a story of a possible Scotland. A Scotland of equality, of meaningful work and pastimes, of more carefree time and greater bonds of fellowship  and friendship.

This is not a utopian idea of a perfect society but a pragmatic approach to a better one . Both to know where Compass points and to build support for a politics of a good society we must begin to convey what it looks and feels like to live in that good Society . Even then this is not enough we have to plan and implement a politics that will move us significantly in that direction. The question of further devolution or full independence is clearly not irrelevant to this discussion and we hope to start to map a way through this divide in Scotland’s left. 

Please come and join us with a range of speakers (including Professor Ruth Lister, Patrick Harvie MSP, Sarah Boyak MSP, Ann Henderson STUC, Katherine Trebeck, Oxfam and many more..)   to stimulate discussion and lots of ways to share your ideas. We need your help in thinking through a good society. 

 Sign up here

  Willie Sullivan

Blanket Ban on Prisoner Voting in Scotland's Referendum - John Scott QC

The trades union movement has been at the forefront of the struggle for basic rights and liberties around the world. Rights that that we have all come to take for granted today. And you continue to challenge injustices to this very day.

The STUC’s A Just Scotland report painted a picture of a country many of us aspire to, regardless of where we stand on the issue of Scotland’s constitutional future. The chapters on equality and human rights, and democracy and citizenship in particular begin to put flesh on the bone of what we mean when we talk about a Scotland that truly values ‘social justice’.

The Howard League for Penal Reform has a long history of campaigning for the rights of those held in custody and for just responses to the causes and consequences of crime.

The Scottish Parliament is currently considering legislation that determines who will get to vote in next year’s independence referendum. This is a first. The franchise for local and general elections is an issue reserved to the Westminster government.

The Scottish Independence Referendum (Franchise) Bill seeks to extend voting rights to 16 and 17 year olds. However, the Bill also bars convicted prisoners from voting in the referendum – something that the Howard League for Penal Reform in Scotland and others have opposed. The Scottish Government has chosen to replicate the UK Government’s blanket ban on prisoner voting. On this issue, we are out of step with other civilised democracies in Europe. The only other European countries with a blanket ban on prisoner voting are Armenia, Bulgaria, Estonia, Georgia, Hungary, Lichtenstein, Russia and San Marino.

Scotland has one of the highest prison populations in Western Europe and our reoffending rates remain stubbornly high. The Scottish Government has accepted that our prisons are full of people many of whom are more troubled than troubling, and they have acknowledged that those held in Scottish prisons are some of the most disadvantaged individuals in our society. Research carried out by former prison governor Roger Houchin in 2005 confirmed that a quarter of all inmates in Scotland’s prisons hailed from just 53 council wards and some of our most deprived communities.

Put simply, prisons are the dumping grounds for the failures of other areas of social policy. I have seen this with relentless regularity in my work as a criminal defence lawyer over the last 26 years.

Most people held in Scottish prisons will re-enter our communities, many after only a short time away, and we need to do what we can to give them a stake in Scottish society. That should include giving them the vote and the sense of civic responsibility that comes with it.

 The anomalies that arise for those in prison on short-term sentences are particularly acute. For instance, in 2011-2, over 10% of custodial sentences handed down were for shoplifting. Are we really saying that these individuals shouldn’t have a say in the future of the country they live in? That they shouldn’t have a say in the future of communities they will return to? That they shouldn’t be encouraged to feel part of society rather than continuing to be excluded from it?

 As our Parliament debates this issue, the words spoken by late trade union activist Jimmy Reid over four decades ago have lost none of their resonance:

 It's the frustration of ordinary people excluded from the processes of decision-making. The feeling of despair and hopelessness that pervades people who feel with justification that they have no real say in shaping or determining their own destinies.

We at Howard League Scotland want fervently to avoid this issue ending up as the political football that issues of crime frequently become. This benefits no one, not least victims of crime.

This is Scotland’s chance to put down a marker regarding the value it attaches to social justice and human rights. And a chance to send a message to those on the periphery of our society that they have a stake in its future.

 John Scott QC

Chair

Howard League Scotland

www.howardleaguescotland.org.uk

Introductory remarks on the Scottish Parliament Referendum Bill

I was unfortuantely unable to attend an evidence session of the Scottish Parliament Referndum Bill Committee this morning due to illness.  STUC will instead provide written evidence in due course.

But below are the introductory remarks which I submitted in writing.

"STUC is pleased to have the opportunity to give oral evidence to the committee and will provide further written evidence if, following the evidence session, that is appropriate.

STUC’s established position has been to support the use of Section 30 to enable the Scottish Parliament to legislate for a referendum at a time of its choosing; to extend the franchise to 16 and 17 year olds and to provide for an agreed role in the process for the Electoral Commission.   STUC opposed the view that limitations should be placed on the Scottish Parliament’s right to pose multiple questions in the referendum but recognises that the wording of the question presented is clear and fair. STUC is also disappointed that a more open approach to prisoner voting has apparently not been adopted.

Scottish trade unions have traditionally played an active role in Scottish and UK elections either through direct funding relationships with political parties, predominantly the Labour Party, through supporting the campaigns of individual candidates and through non-party election initiatives designed to influence candidates and political parties in pursuit of various policy positions. Around half of trade union members in Scotland are member of unions which pay a political levy to a political party, the other half are members of unions which have traditionally remained neutral in respect of recommending votes for one party or another.

STUC is satisfied that the rules laid down for campaigning and third party campaigning, along with associated spending limits, broadly meet the purpose of allowing fair and free campaigning during the referendum period.  Campaigning prior to this period is clearly less well controlled and there is an obvious potential for any inequality of arms in relation to the funding of campaigns to be manifested in the lead up to rather than during that period.

For its part, STUC decided at is Congress 2013,  that the earliest point at which it would take a final view on the referendum vote would be in April 2014.  This does not preclude individual unions from adopting positions before that date and at a time of their choosing, however a large majority of our affiliated unions have taken a view similar to that of STUC as a whole and seem likely to use the majority of the period running up to the referendum in discussion and consultation rather than campaigning for one outcome or the other.  This approach does not reflect neutrality.  Rather it reflects STUC’s view that its members along with all other voters deserve the opportunity to consider the facts in as informed an environment as can be created. 

STUC has previously voiced its concern that ‘election style’ campaigning at too early stage has, and will continue to, make it more difficult to create the appropriate environment for debate.  STUC is a participant in the Future of Scotland initiative which has consistently made the case for promoting an informed and rationale debate.  STUC’s own contribution to this has been the publication of ‘A Just Scotland – an interim report’ in November 2012 and this document has been used to promote discussion within unions in an atmosphere generally free of rancour.

STUC continues to take a positive view of the 2014 referendum as an opportunity to discuss the ‘kind of Scotland we want to see’ and believes that the next period could provide an opportunity to promote democratic participation and active citizenship.  It is particularly important that the referendum is used to ensure maximum voter registration and that the first voting experience for many young people is a positive one.

There will be understandable tendency amongst the two main campaigns to build local campaign groups and to engage in voter registration amongst those communities of interest who each deem to be likely supporters of their respective positions.  There is also a natural tendency amongst political parties to concentrate efforts on those deemed most likely to vote.   The Parliament, and the respective governments, should do everything reasonable to militate against a situation in which the referendum result is decided by campaign messaging and organisation at the expense of full democratic participation. 

STUC recently met with a range of interested parties to consider the issue of participation and active citizenship in the context of the independence referendum.  The participants agreed the following statement which will reflected in the evidence which the committee receives.

“Recently a number of representatives from the third sector, academia, and other interested parties discussed the need to increase voter participation in the run-up to the independence referendum in September 2014. 

With low turnout in Scotland (2012’s local authority elections having a turnout of just 39%), and the Electoral Commission’s research showing that young, urban, mobile and BME people regularly fail to register to vote, more needs to be done to engage the whole of Scotland in the debate and process for the upcoming referendum.

We believe it is essential that all communities of geography, interest and background are given the relevant resources to hold informed discussions about the referendum in a bottom-up, participatory manner.  The establishment, funding and resourcing of community champions (local people who can facilitate dialogue in a neutral way) is essential. 

Academics also require the space to facilitate the sharing of evidence-based knowledge across Scotland for all, and media – especially local media – must be properly resourced to enable an informed debate to take place.

Overall, the group believes that the Scottish and UK Governments should act to ensure:

• a well-resourced voter registration campaign, aimed at ensuring that those who traditionally don’t vote are able to do so at the referendum.

• the widespread availability of objective information on what will happen post-referendum, suitable for all voters to understand, so that all parts of Scottish society understand what a ‘yes’ or a ‘no’ vote will mean for them in practical terms.

• concerted effort to reach ‘hard-to-reach’ groups by resourcing communities, schools, academia and relevant media to raise and debate the issues relating to the referendum, so that all parts of Scottish society feel informed and engaged.

The referendum will see the people of Scotland make one of the most important decisions that Scotland has seen in recent years. We all have a moral duty to ensure that as many people as possible participate in it in an informed way – building democracy for now and the future, and ensuring that the fate of Scotland is truly decided by all who live here. ”

Campaigning against the Bedroom Tax

It’s going to be a very warm June whatever the weather.

There was a ‘wait and see’ moment on April 1st of this year following the formal introduction of the hated ‘bedroom tax’. Would the opposition subside following combination of last minute climb downs and the reality of the legislation passing?

The early indications are that this will not be the case. The Scottish media, particularly the Daily Record is reporting, almost daily, stories of individuals and families affected and accounts of heavy handed eviction notices (some no doubt as a consequence of bad bureaucracy rather than political intent).

This is the fuel which will ensure that the campaigning momentum continues. New local groups are being formed almost daily and there is a coming together of a whole number of campaigning organisations, trade unions and equality groups committed to continue the fight.

There is no single organisation which can or should claim to represent all the campaigning interests or to have a monopoly on ideas for the best tactics. The No2Bedroom Tax campaign has played a key role in circulating information and seeding local campaigns. It played a massive role in the March 30th Demo in Glasgow and has also been active in bringing together local groups across the UK in discussing future co-ordinated action. The Scottish Anti-Bedroom Tax Federation has brought together a number of local groups, particularly of the west coast, and some trade union branches to form a structure. Its founding statement can be found here and its public face heavily focuses on physical opposition to evictions - more of which later. Some of the biggest anti-bedroom tax meetings have been organised by the mainstream political parties Labour and SNP. Add to this the high profile campaigning activities of Govan Law Centre and of Shelter Scotland not to mention skilled political activists such as Citizen Smart (see his Youtube Bedroom Tax song here) and Mary Lockhart and the ingredients for a broad based campaign are obviously present.

There are of course differences of approach. These can be separated into four broad strands although many groups and individuals would support pursing more than one.

Defeating the Bedroom Tax at Westminster through repeal either during the current parliamentary term or post 2015.
Many things can happen over the next two years. The Coalition remains weak and Liberals are deeply uncomfortable about the tax and about their current electoral prospects. A continuing campaign across the UK and targeted at specific MPs is a must.

Scottish Parliament action to prevent evictions through Bedroom Tax and provide financial support.
Legislation could be introduced as proposed by Govan Law Centre to ensure that there would be no evictions for Bedroom Tax arrears. Of course this would not top debt mounting up or prevent local authorities and housing providers from pursuing debt through other means but it would mean no-one losing their house. It would be problematic for housing associations in particular with respect to their revenue streams. Shelter has proposed that any such action should also be supported with Scottish Government funding to obviate the impact on personal debt and housing provider funds. Alternatively, a probably most persuasively, the Scottish Government could supplement the Discretionary Housing Payment funding provided by Westminster to expand to all those hit with the Bedroom tax, the support they need to avoid arrears.

Council ‘No Evictions’ policies

The First Minister has announced that all SNP led councils will not evict during the first year and a number of other councils have said the same including Edinburgh. Others have more nuanced policies which imply that every other route and then some will be pursued before eviction is sought. The limits of these policies are partially in relation to time (what happens next year) and also are only of any use to council house tenants. For instance GHA residents in Scotland’s largest city are are helped not a jot by such policies.

Physical opposition to evictions

Although there should be a lively and fear free debate about what action should be taken if and when individual tenants face eviction, I believe that the concentration by some on this tactic is a mistake. Even in the worst case scenario, and not withstanding some of the ridiculous resort to threat of some housing providers, mass evictions are unlikely any time soon. Successfully opposing evictions through court action, winning policies at housing provider level or through civil disobedience will not remove debt. As indicated above, there are a whole range of campaigning aims to be pursued to avoid the crisis of evictions through Bedroom Tax.

What happens next?

On June 1st the Anti-Bedroom Tax Federation has called a demonstration in Glasgow. The latest information is that it will be a rally rather than a march and speakers have still to be announced.

On June 8th a demonstration has been organised outside Tory Party conference in Perth

On June 26th the Petitions Committee of the Scottish Petition will consider the Govan Law Centre petition. A lobby is expected.

And watch out for STUC campaigning activities on austerity in last week of June. This will include a major bedroom tax event – details soon ...

What's happening in Scotland's local labour markets?

Not usually one for bold predictions, I hereby declare a strong belief that political reaction to the new labour market statistics for Scotland (published by ONS at 9.30am tomorrow morning) will be shrill and unenlightening. Cherries  will be picked, scarcely deserved credit claimed and/or unwarranted blame apportioned. Such is life on the third Wednesday of the month. It’s all as inevitable as it is crushingly tedious.

The monthly bunfight is predicated on Labour Force Survey data for employment, unemployment and inactivity. The LFS sample size for Scotland is approximately 5,800 households a year. I’ve blogged recently about the Scottish Government’s use of experimental LFS data for which the sample size is considerably smaller.

Unfortunately it’s not widely known that the Scottish Government funds ONS to boost the sample size for Scotland each year to 20,000 households. These data are then combined with similar boosts to the English and Welsh LFS in the Annual Population Survey. The APS therefore provides a more accurate and detailed picture of the Scottish labour market albeit one that lags the latest (non-boosted) statistics that will be published tomorrow.

The Scottish Government draws on the APS to publish an excellent annual report ‘Local Area Labour Markets in Scotland’. This is something of a pioneering study which led the way in shedding light on rising underemployment some time before ONS caught up.  So it’s a crying shame that the latest edition published on 8 May (covering 2012 APS) was, as far as I can tell, completely ignored by the Scottish media for it provides a much fuller picture of the reality of the labour market as confronted by real people in real communities than the monthly ONS release.

What does the 2013 report tell us?

• The 2008-2013 mini depression has exacerbated long-standing regional inequalities. The report bravely concedes that progress towards the Scottish Government’s cohesion target has reversed: between 2011 and 2012, the gap in employment rates between the three local authorities with the highest employment rates and the three local authorities with the lowest employment rates increased by 2.8 percentage points from 16.3 to 19.1 percentage points. The poor performance of Glasgow (see below) had a relatively severe impact on the overall rate of the 3 worst areas due to its size.

• Some welcome progress on employment growth over the year was insufficient to compensate for the damage done over the past five years: just over half of local authority areas saw an increase in their employment rates over the year, while all but two local authorities (North and South Lanarkshire due to significant increases of 4.1% and 4.3% respectively in the saw female employment rate) reductions between 2008 and 2012.

• Glasgow saw the largest decrease in employment rate…down 4.1% to 59.7%, while its employment level decreased by 15,500…over the year Glasgow has seen a large shift out of employment into inactivity (with the level of inactive students aged 16-24 up around 11,000 over this period).

• Perhaps surprisingly, the male employment rate decreased from 75.1% to 74.6% while the female employment rate increased slightly from 66.5% to 66.8%.

• The youth employment rate (16-24 year olds) in Scotland decreased by 1.4% over the year, from 54.6% in 2011 to 53.2% in 2012. A total of 16 local authorities (including Glasgow and Edinburgh) saw an decrease in their youth employment rate, whilst over the same period the remaining 16 saw increases. The youth unemployment rate (16-24) in Scotland was 20.7%, 0.2 percentage points lower than the rate in the UK. The rate in Scotland has increased by 7.1 percentage points since 2008, higher than the increase of 5.9 percentage points in the UK over the same period. There is nothing in this report to support the Scottish Government's proposition that youth unemployment has fallen by a third over the past year.

• The number of people in full-time work continues to decline: in 2012 73.2% of people in employment were working full-time, compared to 73,6% in 2011 and 76.2% in 2008. Over the year the percentage of people in full time work has decreased in 17 local authorities and since 2008 has decreased in 28 local authorities.

• The increase in underemployment slowed in 2012: there were 243,000 workers underemployed (ie willing to work more hours), an increase of 2,600 over the year and 68,900 since the start of the recession in 2008. The underemployment rate (those underemployed as a proportion of all aged 16+ in employment) in 2012 was 10.0%, up 0.1% over the year and 3.0% since 2008. Underemployment levels are highest amongst part-time female and full-time male workers.

• At the start of the recession in 2008, 268,500 (10.6%) of the 16+ workforce were self employed. By 2012 the level of those self-employed had increased to 301,700 (12.2%), an increase of 33,200 with around 60% of the increase due to a rise in self-employed males. Those working part-time made up 85% of the total rise in self-employment in Scotland in 2012. The level of 16+ employees has decreased from 2,242,600 in 2008 to  2,145,700; a decrease of 96,900.

• The report provides no comfort to those looking for signs of rebalancing: since 2008, there have been statistically significant changes in the proportions employed within ‘manufacturing’ (down 1.6%), ‘construction’ (down 2.3%), and ‘banking, finance and insurance’ (up 2.2%).

• Private sector job growth between 2011-2012 (10,600) did not fully compensate for public sector job losses of 13,900 – the paper does not break these jobs down into FT/PT etc.

• In 2012 33,000 (13.3%) of 16-19 year olds were not in education, employment or training. The level of NEET had increased by 1,000 (0.9 percentage point) since 2011.

• Just under 48% (101,600) of all unemployed people in Scotland have been unemployed for less than 6 months, while just under 33% (70,100) have been unemployed for 12 months or more.

• The unemployed rate for disabled people (for those aged 16-64) in Scotland rose by 1.2% over the year to 12.6% with the level increasing by 4,000 to 50,500.

• In 2012, 25.4% of all people in Scotland aged 16-64 who were inactive wanted to work, compared to 24.6% in 2011.

What do we learn from the above? Things were grim in 2012 and unless the improvement reflected in the last couple of ONS monthly releases is maintained and built upon through the whole of this year, 2014's Local Area Labour Markets report is unlikely to be much of an improvement.

 

 

Scottish Government Banking Strategy: some early thoughts

Earlier today, the Scottish Government published ‘Sustainable, Responsible Banking: a strategy for Scotland’ the purpose of which is to ‘set out what Scottish Ministers consider to be the key principles of a sustainable, responsible and healthy banking sector in Scotland’.

 

It’s a disappointing paper. Some fundamental issues are dealt with in a very flimsy manner or, worse, ignored altogether. The paper is imbued with a worrying naivety (‘in the wake of the crisis, the attitudes of consumers, UK and EU regulators and the banks themselves have changed’) and a level of optimism about the benefits of greater competition that might kindly be described as unjustified.  

 

The STUC will publish a full response in due course but here are my early thoughts on some specific issues:

1     Key sector?

The strategy implicitly accepts the approach whereby banking, as part of ‘Financial and Business Services’ is treated a priority or ‘growth’ sector by the Scottish Government. Publication of the banking strategy should have provided an opportunity to state what has been apparent since 2007: chasing growth in banking as an end in itself is a mugs game.

 

A too large banking sector absorbs resources (e.g. engineers, mathematicians etc) that could be more productively deployed elsewhere. It contributes to higher inequality, destabilises the wider economy and exerts a degree of political influence that cannot be reconciled with a healthy democracy.

 

Debating whether an independent Scotland could have coped with the crisis of 2008 is ultimately pretty pointless. The pressing issue is surely what needs to be done to avoid future crises under any constitutional scenario.  This requires Government to measure success in banking not by the sector’s output but whether banks are fulfilling their fundamental purpose of allocating capital efficiently.

 

2     Too big to fail, too complex to manage

 

The strategy doesn’t address issues of scale which, to put it mildly, is something of an oversight. As was surely proved beyond all reasonable doubt by the crisis, large financial conglomerates are very dangerous entities. They enjoy an implicit public subsidy which hands them a major competitive advantage over smaller players. (Again) they hoover up resources and exert a nefarious political influence. Boards are unwilling or unable to exert effective oversight. Executives don’t understand the businesses they purport to run.

 

So here was an opportunity to state categorically that serious structural as well as regulatory change is required to make the system safer and more efficient. The opportunity was flunked.

 

3    Competition

Scotland’s banking sector is highly concentrated; more so since the crisis enforced consolidation. Therefore support for greater competition has never been stronger. Proposals include liberalising entry conditions and reducing switching costs. Interestingly other barriers to entry such as the remuneration of executives (the strategy doesn’t address remuneration) are not mentioned.

 

The recent LSE Growth Commission (UK) report argued that increased competition would have a variety of benefits:

 

"It would encourage banks to seek out profitable lending opportunities more assiduously. It could also stimulate relationship lending as retail banks focus on more mundane finance rather than ‘casino’ activities”.

 

But how well does the competitive mechanism function in the retail banking market and would more players necessarily lead to the benefits described above? Many have their doubts. Here’s the economist Roger Bootle (no socialist he) in ‘The Trouble with Markets’ his excellent book on the crisis:

 

 “At the retail end of financial services, despite the appearance given of a large number of providers, because of asymmetries of information and opacity in charging structures, most services are provided in a non-competitive way, again, with the result that the interests of the ultimate customer – the retail client – are not properly reflected through the system. Across much of the financial sector there is a tendency to regard retail customers as helpless victims, there to be exploited, rather than as business partners from the satisfaction of whose needs derives the justification for profit. More milchcow than market”.

If ‘asymmetries of information and opacity in charging structures’ persist then the supposed benefits of greater competition will not be realised even if more players enter the market.

4     Workers

The strategy includes a section on ‘professionalism and standards’ which, as the title suggests, is very tightly focused on the qualifications and professional accreditation of senior staff.

There is no mention of the retail counter staff or call sector worker; workers who in the recent past have suffered redundancy or the intensification of performance management regimes. Banks are no longer a good place to work. The golden rule of Scottish and UK economic development policymaking is once again strictly adhered to: do or say nothing which might possibly be perceived as infringing on managerial prerogative.

5    Restoring Trust

Consider this:

“The banks want to change the public’s often negative perception of them and they recognise that the only way to do that is to prove to their customers that the desire to change is genuine and that it is for the long term. That is a hugely important step and one that deserves to be supported”.

I can only say that that this is not the world in which I live.

6    Scottish Business Development Bank

The strategy includes a laudable proposal for the Scottish Investment Bank to evolve into a Scottish Business Development Bank. Although not presented in these terms, this is clearly an attempt to overcome a long standing and extremely serious structural problem in the Scottish economy: the failure of the financial sector to support productive, growing and innovative businesses with patient and committed capital.

But the proposal is messy and confused, lacking in detail and ambition. It fails to mention that innovation is currently heavily penalised by banks (for perceived higher risk) and that supporting such activity should be the primary purpose of such an institution. Another opportunity missed. Give us something like this instead?

7     Diversity

On the day that the full extent of the Cooperative Bank’s problems were revealed, it’s good that the strategy promotes the value of alternative business models and different forms of ownership. The expanded role that credit unions could play in providing services to customers that banks have hitherto refused to service is also highlighted.

But the strategy has nothing substantial to say about how a greater role for such institutions might be achieved. This isn’t something that can be wished into happening.

 

This leads on to the final issue: what can be achieved at Scottish level under current or new constitutional arrangements? The strategy states that ‘independence would allow Scotland access to the necessary levers to encourage a responsible, sustainable banking sector that better meet the needs of the Scottish people, that enhances Scotland’s competitive advantage and that better enables us to address the economic challenges facing us’.  

 

At the moment nothing can be achieved at Scottish level to reform banking. But it’s not immediately clear to me that the macroeconomic framework proposed by the FiscalCommission would provide any additional levers in this respect under independence. Scotland and the UK would be in a banking union with whole UK institutions in charge of oversight. It remains to be seen whether other important responsibilities – e.g. corporate governance – will be exercised on a whole UK basis. 

 

If nothing else, maybe publication of this strategy will provoke a debate about the future of banking in Scotland that might force the Scottish Government to address these issues head on in the white paper if not before. I hope so.

 

Stephen Boyd - STUC

So much for the Robens Vision for Health and Safety

Guest Blog by Kevin Rowan, Head of the TUC's Organisation and Services Department

When the Health and Safety Executive was set up, almost forty years ago, it was considered important that it had the confidence of both employers and employees and rightly so. For that reason the Health and Safety Commission was set up to agree any new regulations. There were three worker representatives (proposed by the TUC), three employers representatives (proposed by employers’ groups) and up to three others. No decision could be made without the support of both employers and employee representatives. This meant that any changes to health and safety law were seen to have come about by consensus, achieved through a common purpose of improving health and safety in the workplace.

This system has survived almost intact, although there have been some changes. When the Commission was replaced with a Board the membership was expanded from a maximum of 9 to 11, although the three worker and three employer representatives remained. Also in recent years decisions have been made which did not have the support of both sides of industry, such as the decision to exempt some self-employed people from health and safety laws.

However, the tri-partite principle remained and, as a result, unions at least felt they had a voice after all the law still required the Secretary of State to consult with “bodies representing employee interests” before appointing the three employee board members, and each of these three were active trade unionists supported by the TUC.

Earlier this year there was a vacancy for one of these seats. The TUC supported a candidate who has huge respect within the trade union movement; Matt Wrack, the General Secretary of the Fire Brigades Union. Matt is a member of the General Council of the TUC and has a wealth of experience in safety issues. He also has strong links with the world of work.

Last month the Government announced that they were going to appoint someone else. They did so without any meaningful consultation with the TUC, or any union bodies. They hand-picked a retired union general secretary who had not been nominated by a single union (even his own previous union).

Now this is not about the individuals, it is about who can decide who represents workers. If the government can decide this without any discussion with trade unions then it makes a mockery of the whole process. As Hugh Muir pointed out in the Guardian, they could just as easily appoint Norman Tebbit, after all, he was in a union once.

The decision not to appoint Matt Wrack shows exactly what the Government wants, which is a compliant board there to administer the organisation and make sure it delivers what the government wants. It wants to smother any independence and any challenge.

As a result we will end up with a board of professional committee-members, something the Nolan Principles on public life were designed to avoid. The TUC has always nominated people who still have a strong and current link with the world of work. If you look at the present board, with the exception of the TUC nominees, all the other ordinary members of the board of the HSE are either retired or semi-retired consultants. I somehow doubt that this is what Robens* intended when he recommended a tri-partite HSE.

This may seem like sour grapes from the TUC after we did not get our own way, but that is far from the truth. Of course, we understand that the Secretary of State has the final decision, but if the HSE Chair and DWP minister want to maintain trust in the HSE, the onus is on them to show that they have listened to the voice of working people and that the successful candidate carries our confidence.

We care about the HSE, and more importantly we care about health and safety. It was recognised 40 years ago that the most effective regime was one which involved collaboration and tri-partitism. Ditching that model means that the HSE will lose all its independence and become simply a blunt instrument for politicians to use to push through their own short-term agendas, as we are seeing at the moment on issues such as regulation, inspection and enforcement.

The losers will not be the TUC, but the credibility of the government’s claim to have an independent HSE and ultimately the workers whose lives and health will be put at risk.

*Lord Robens produced the report that led to the creation of the HSE.

How is overseas aid for Bangladesh spent?

Not on improving health and safety and workers rights but on television shows appears to be the answer.

The death toll following the Rana Plaza collapse in Bangladesh on the 24th April has now risen to 912.  Latest news report from Bangladesh show that, in a separate incident, a further 8 Bangladeshi people have lost their lives in a fire in another Bangladeshi garment factory in the Mirpur industrial district in Dhaka after being overcome by toxic fumes from burning acrylic clothing. But for the fact that the workforce had gone home the death toll from this latest incident could have been far greater.

These 920 deaths, with more likely from the Rana Plaza tragedy, follow an earlier fire in November when 112 workers lost their lives in another garment factory fire in Tazreen.

The loss of 1024 workers in little more than six months is a disgrace and prompted the STUC to have a look at where UK aid for Bangladesh is spent.

An article in the Sunday Telegraph on the 11th November last year questioned where the Department for International Development was investing aid in Bangladesh.

Investment to aid international development in Bangladesh included:

• £5 million for a Question Time-style show and £546,000 for a phone line announcing what debates are coming up in the country’s legislature.
• £21.2 million on a road maintenance project, later pulled due to “fiduciary irregularities” after it emerged that less than 10 per cent of the funding had been spent on roads.
• £22.7 million to bail out debt-laden state-owned businesses. 
• £13.1 million on training 1,700 civil servants to “develop and deliver pro-poor policy and practice”.

Not one penny seems to have been spent on improving the lives of Bangladeshi workers.  The United Kingdom Government has maintained a silence on this issue, a fact that is hardly surprising given their attacks on workers rights including our well established health and safety regulation and enforcement body, the HSE.

Since the Rana Plaza tragedy, the Bangladesh Government has apparently closed 18 garment factories due to safety concerns.  However Bangladesh reportedly has around 5 million people working in the garment industry in 5000 factories. Those workers are mainly women with many being rural migrants, seeking employment in this low wage industry in order to escape the abject poverty associated with rural life in Bangladesh.

Closing 18 factories out of 5000 would suggest that conditions in these 18 factories were appalling but the workers will have lost their jobs and their livelihoods.  Some may say that this is a price worth paying but we are not in their shoes.  The answer has to be a safer garment industry with higher wages, providing a better standard of living for Bangladeshi workers.

Bangladesh marked this years May Day with demands for improved health and safety, a fitting demand to mark May Day, our day and a day for workers throughout the world.  The United Kingdom Government could ensure that further needless loss of life is prevented by ensuring at least some of this overseas aid is spent on protecting workers. The should also be pressing United Kingdom retailers to provide funding for health and safety initiatives to protect lives and improve the health and wellbeing of garment workers in Bangladesh.

Current talks are taking place between retails and the Bangladeshi Garment Manufacturers and Exporters Association. Any body arising from these talks will not be independent, it will only deliver what the industry wants and will continue to be driven by what the retailer's buyers are willing to pay for the products.

The United Kingdom Government and those of other European countries have to take a lead and work with international trade unions and NGOs to develop an independent fire and health saefty inspectorate for the industry along the lines suggested in the Bangladesh Fire and Safety Agreement.    This will save lives.

It may mean that we pay more for our clothes but surely that is a price worth paying.