Autumn statement and Scotland

Not a good day at the office for George Osborne. Up to the dispatch box to tell us that the coalition's main political promise would be broken. The deficit won’t be paid off by the end of this parliament - maybe by 2016-17? Aye that will be right!

Excessive borrowing, the claimed Labour disease, is clearly spreading to the ConDems with £158bn more borrowing over the next four years than it planned a year ago. Cash that won’t even be spent stimulating the economy, instead he will be borrowing to pay for unemployment and lost tax receipts of the newly jobless. The much vaunted growth forecasts have been downgraded by the OBR to just short of another recession.

And what will Scotland get from this dogs breakfast? Well it’s very difficult to see from the 98 pages of the Autumn Statement. Not even a supplementary Barnett consequentials paper on the Treasury website.  The Scotland Office tells us “Scotland will receive an additional £433m in Barnett consequentials for capital projects.” And the revenue consequentials? No one seems to know. Not in the documents. Not in the Scotland Office statement. I understand phone calls from Scottish Government officials to the Treasury have not produced an answer.  So John Swinney is left saying “the Treasury are so far unable to tell so how much our revenue budget is to fall.”  It all gives the impression of a hastily cobbled together plan.

We don’t even get the capital straight away. The nominal figures are £50 million for 2011-12, followed by £68.3 million, £141.9 million and £172.3 million in subsequent years, eventually totalling £432.5 million.

What we do know is there’s plenty of other bad news in the Statement for Scottish workers and their families:

·         Raising the state pension age to 67 by 2026. Further proof you can’t trust this Government on pensions.

·         More public sector job cuts. 710,000 across the UK and that could mean around 70,000 in Scotland

·         A public sector pay cap of 1% for the next two years when inflation is topping 5%. The cumulative effect of 2 yr pay freeze, 2 yr 1% pay cap + pension contributions increase will be a 16.48% pay cut in public sector.

·         Looking at Regional Pay so he can give ungrateful public sector workers in the most deprived regions of England and Scotland a further pay cut.

·         Promised increases in Child Tax Credit abandoned.

·         Creating further job insecurity by undermining employment rights on unfair dismissal, redundancy and TUPE.

·         And if you still have a job you are more likely to die at work when health and safety rules are abandoned.

In essence the UK Government is planning to borrow £billions to keep workers on the dole rather than investing to get people into work and growing the economy. Even those in work will be less willing to spend when they see what’s coming.

On the eve of the probably the largest strike the UK has ever seen – the priorities of this Government are very clear for all to see.

Labour Leadership

Ballot papers will start dropping through members letterboxes this week for the election of a Leader and Deputy Leader of the Scottish Labour Party. This is an important election as it will be the first leadership team to be elected as party leader in Scotland, rather than simply leader of the MSP group. In addition, after last May's election defeat, the Scottish Labour Party leads to take a new direction to win back the support of the electorate.

There are three competent candidates for each post, but I will be supporting Johann Lamont for Leader and Ian Davidson for Deputy.

My reasons are primarily the same for both candidates. The Party needs more than simply a competent front person. We have done with New Labour, the 'what works' presentation above substance politics. We need leaders that imbue Labour values, not simply a smart soundbite.

It is not an accident that almost all the trade unions in Scotland back Johann and Ian. Trade unions don't operate in the political bubble. They represent workers who have made it very clear that they want political leaders who stand up for workers in their current struggles. Johann and Ian are the candidates with a proven track record of promoting Labour values. 

And record is important because it is easy to make promises in an election. Endorsements like Maria Fyfe and senior union women for Ian Davidson shows that he has walked the talk for fair representation in the party. He has been on the marches, the picket lines and taken forward the cause of working people in Parliament. Johann has a similar record on a range of causes and has the backing of respected politicians like Hugh Henry. 

That's not to say that we will agree on everything. I have had many a policy disagreement with both Johann and Ian. Pretty robustly on occasions too! But these have always been tactical differences - I have never doubted their underlying values.

They also understand the need for change. Not just as an easy slogan, but because they understand why we lost support and what we need to do to rebuild trust.

As a senior union official, SEC member and as a former Chair of the Scottish Labour Party I have worked with many politicians, through good times and bad. I can tell you that Johann and Ian are the real thing and that's why I will be voting for them.

Nordic inspiration

Comparisons with Nordic countries are in vogue with the Cabinet Secretary for Education recently extolling the merits of the Swedish free schools. Looking to Scandinavia for public policy inspiration is very worthwhile and the work of Nordic Horizons and others is important in promoting a dialogue. These countries are of similar size and geography to Scotland and share at least some common attitudes and cultural links.



Last week I was giving a presentation to a visiting delegation of Norwegian trade unionists on the Scottish health and social care system. This was a privilege because we usually look to them for inspiration. For example, the Norwegian health service has a much better staffing ratio per head of population than Scotland. They also have a genuinely ‘local’ council structure, serving real communities rather than our historical compromises. Of course their greatest achievement is a more equal society that delivers better outcomes in almost every measure.

This visit was one of a number of similar trips by Norwegian unions to Scotland in recent years. They are concerned that market principles are invading their public services, largely based on the English model promoted in the New Labour years and taken to new lows by the ConDems. They come to Scotland to learn how another small country has taken a different path of public service reform based on cooperation not competition. I was able to give them an historical overview and update them on the work of the Christie Commission that again sets a very different course from other parts of the UK.

Interestingly, they were less than impressed by the Swedish free schools and pointed to recent studies that question how effective they have been. The number of low performing pupils has increased since the free school system was introduced. They regard this as a good example of how market principles are undermining the success of the Nordic approach in creating and maintaining a more equal society. It is equality that makes the difference and this is reflected in UK studies that show that school systems are less important than social class determining positive education outcomes.

I would therefore look to Finland instead of Sweden where they combine the highest levels of attainment in the OECD‟s Programme for International Student Assessment (PISA) and have “high and consistent performance standards across the entire education system”. It is important to note though that Finnish success in world education rankings is not just about their school model. It is a country that values social cohesiveness. Finns pay relatively high taxes which provide the money for high quality services which all contribute to the well being of their children.

So while we should continue to take inspiration from Scandinavia, we should remember that some developments there are driven by the same neo-liberal policies that have caused so much damage in the rest of Europe. I wonder if Mike Russell would be as keen on free schools if he fully appreciated the link to the English market reforms? Well he might, but the rest of us should be more wary.

Politics of Pensions

I was speaking at a fringe meeting on pensions at today's Scottish Labour Party conference. Thanks to CfS for organising it.

I have previously explained why we are balloting members on pensions. In essence most of our members across the UK are being asked to pay more, work longer and get a smaller pension. As today was a political event, I focused on the politics of pensions.

Let's start with the Hutton report on public service pensions. Now in fairness to Lord Hutton there are a number of positive points in his report. In particular he buried the myth of the 'gold plated' pension, promoted by Nick Clegg, and argued for bringing private sector pensions up, rather than bringing everyone down. Other recommendations on governance and the factual analysis that shows pension costs declining have been helpful. Other issues like the 50% increase in contributions were formulated by the UK Government, not John Hutton.

However, I still wonder why he took the job. He was after all in the Cabinet that reached a UK deal on public service pensions in 2007/8. He then said he thought that deal did not go far enough and it was better he did the review that the usual Tory place person. Sadly, this is a classic New Labour approach to politics. Little grasp of political values and a 'what works' approach to policy. Little grasp of the political context that the Tories would use pensions as part of their ideological attack on public services. The report was also laced with other New Labour mantras, including ending access to public service pension schemes for workers who are privatised. Plurality of public service provision is more important than decent pensions.

So what about the current Labour leadership. Well I might not have agreed with Ed Miliband's position on the civil service dispute in June, but I could at least understand it. Negotiate before striking is what we do all the time. However, that is no longer the position. No reasonable observer could fail to recognise that we have been attempting to negotiate for months with a government that is simply not interested in meaningful negotiations. Ed did make the right decision in joining the TUC march in London and he should now make the correct call here if the trade unions take action on 30 November. Labour needs to be seen on the side of workers who are only seeking to protect their hard earned pensions. I was very pleased to hear all the candidates for Leader and Deputy Leader at the hustings this afternoon support the pensions justice case and give their backing to the ballot.

And the SNP position? Well unlike the UK government they couldn't blame the previous administration, because they were in power when the pensions deals were done in 2008. John Swinney's signature is on the LGPS (Scotland) agreement and I don't believe he wanted to backtrack, he is in my view a man who sticks by his word. He also well understood that whatever the temptation to levy unecssary contribution increases on workers covered by the LGPS scheme, this would rightly be viewed as a Scottish pensions tax. To do the same for the other schemes would have taken a significant chunk out of his declining budget, so he decided to bow to Westminster. He could have used the very large, and unbudgeted, surplus in efficiency savings. However, I believe politics took over here and the Scottish Government took the political calculation that they could spend the money to greater political effect elsewhere and blame the increase on Westminster.

So public service pensions is first and foremost a dispute with governments over an essential term and condition of service. Our members pay significant and growing pension contributions for their retirement. They do the proper thing in providing for them and their families. Unlike many private sector bosses who expect the state to pick up the bill while they profit and pay themselves massive pensions.

But it also has a very clear political context. It is part of the ConDem coalition's ideological attack on public services, reflecting their political values. For the SNP it is an opportunity to say again that it would all be fine if we were independent. The Labour leadership also has to stand up and be counted as being on the side of workers in struggle. No New Labour style woolly words or equivocation on this one Ed. Millions of workers expect better.

Top Pay Scandal

I was a guest on the BBC's 'Call Kaye' programme this morning discussing the 49% increase in directors pay. Rightly, there was a lot of anger at this outrageous abuse of power. I almost felt sorry for David Watt from IoD Scotland who usually gets wheeled out to defend the indefensible.

My opening point was that a time when our members are suffering a pay freeze and attacks on their pensions, they would welcome a pay rise in line with inflation - 5%, never mind 50%. These directors are same people who want to end unfair dismissal rights and cut workers pay and pensions in the public and private sector. They have no shame as they get together to award each other pay, bonuses and massive pensions.

I also had the opportunity to correct some myths.

• There is no real link here with performance. CEO pay has quadrupled in the last ten years, while share prices have fallen.
• No they won't be poached by overseas companies. Only one FTSE 100 CEO has been poached in this way in past 5 years, and that was by another UK company. 60% of appointments are internal and turnover is only 6% - half the national average.
• They won't move overseas. We were told a few weeks ago that banks will move to the Cayman Islands. Well I would like to see their taxpayers finance the next bailout.

A number of callers referred to the culture of short termism and that is a contributory factor. But this is also a failure of moral leadership. Between 1949 and 1979 top pay actually fell as a proportion national income. After 1979 it has been going in the opposite direction. The post war generation of leaders has been replaced by greed and avarice. Individualism and wealth, the Thatcher values, have been promoted over any sense of fairness or decency. CEO's now earn 145 times average wages. If we continue as we are that will rise to 214 times average wages by 2020.

So what are the solutions. Capping wages, possibly as a multiplier of the lowest pay would be one solution. Progressive taxation is another. The High Pay Commission is looking at some structural solutions including:

Transparency: more publicly available information and meaningful disclosure.

     Accountability: how pay at the top can be made more accountable through reforms of the Remuneration Committees and the inclusion of other stakeholders.

Fairness: The British public have a deep and ingrained sense of what is fair. When it comes to pay at the top, this is fundamentally about playing by the rules. Need reforms that could engage greater fairness in relation to pay.

It is that last point I would finish on. This isn't just an issue for the companies concerned and their shareholders. It is an issue that affects us all. We know that more equal societies to better on almost every measure. Top Directors pay is an important part of the drift towards a less equal society in the UK, and we are paying a big price for not tackling this issue.

Health & Safety Week

This is European Health and Safety Week when we seek to raise awareness of workplace health and safety.

This year's events take place against the background of the UK Government slashing the budget of the Health and Safety Executive and planning to dilute existing legislation to remove the allegedly "unfair burden" on business. We have heard plenty of similar nonesense from Euro sceptic Tory MPs today. When they talk about the burden of EU regulation, they mean issues like health and safety. After the banking collapse you would have thought MPs would have learnt some lessons about the importance of regulation.



The minister concerned has been keen to meet with representatives of big business. However, he has repeatedly snubbed the families of those killed due to employer negligence. The campaign group FACK accuses the minister of downplaying the cost of health and safety failures while inflating the cost to business of compliance with safety laws.

They write: "Your answer to a parliamentary question from Ian Lavery MP in June put the cost of health and safety failures at £20 billion per year. This is the bottom end of a £20-£31.8 billion HSE estimate, based on 10-year-old prices, but does not include the cost of cancers and other long latency work-related conditions which would add another £20 billion at least. What you do not explain is that the negligent employers who fail to take health and safety seriously and comply with the law bear less than 25 per cent of the cost of their actions, exporting the 75 per cent of £40-£50bn cost per year on to the whole economy - a tax on good employers and all of us alike."

More than 1.2 million people currently at work have health problems caused by their jobs. The problem is not just bad employers using health and safety as an excuse but the UK government using safety myths as a reason for cutting back on regulation, enforcement and guidance.

The Wednesday of European Health and Safety Week has been designated "National Inspection Day" when all safety representatives are asked to inspect their workplace. This not only helps make our workplaces safer , but also raises awareness of safety at work. Given the direction of travel of the UK Government on safety, we will need to redouble our efforts to safeguard the workplace.

Local government reform

I was speaking at our fringe meeting at the SNP conference today. The theme was public service reform. I set out the key recommendations of the Christie Commission and the Scottish Government's response, in the context of the major challenges facing Scotland's public services. I then focused on the implications for local government.

There is legitimate concern over the future of local government. Services are going away from local democratic control including police, fire and possibly social care. In addition we have services being transferred to a variety of trusts and other arms length organisations. Plus some privatisation initiatives. This has major implications for the remaining services and creates a confused pattern of service delivery. Unless action is taken we are heading for a 19th Century service delivery model that local government was established to sort out.

There is also a clamour for council mergers on the premise that economies of scale will be achieved. I questioned this premise. There is no evidence that larger councils are more efficient or more effective. They are also more remote from local communities. We should remember that Scotland has the smallest number of councils and councillors per head of population in Europe. Far from being over governed, our councils are already large by international standards.

So the position of local government is hardly secure. However, the reform agenda also has opportunities for local government. The key recommendation in the Christie Commission report is local integration of services through community planning. Councils have an opportunity to lead this process and become the leader of public services in each community. A less publicised Christie recommendation was the development of a 'single public authority' model. The island authorities are already seriously looking at this option and it could have wider application.

So local government needs to speak out strongly with politicians, staff and users making the case for strong democratically accountable councils. Projecting a new vision into the public service reform debate.