Welcome to my Blog

I am a semi-retired former Scottish trade union policy wonk, now working on a range of projects. All views are my own, not any of the organisations I work with. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Saturday, 29 October 2011

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.

Friday, 28 October 2011

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.

Monday, 24 October 2011

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.

Friday, 21 October 2011

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.

Wednesday, 12 October 2011

Pensions Ballot

UNISON members in Scotland are beginning to receive ballot papers asking them to vote for industrial action to protect their pensions. The ballot closes on 3 November 2011.

As the lead negotiator for pensions in Scotland I have been closely involved in this issue and have met many members in meetings across Scotland. Pensions can be a complicated but the key issues are relatively straightforward. The issue is made more complex in Scotland because we have separate pension schemes that are regulated by Scottish Ministers. Primary pensions legislation is reserved to UK Ministers.

Firstly, UK ministers want to increase pension contributions by 3.2% of pay on average. That's nearly a 50% increase. Scottish Ministers are passing this increase on to NHS staff because their budget will be docked if they don't. They could have used the additional efficiency savings delivered by staff  to pay for this, but decided not to. They are not increasing contributions for those staff covered by the local government scheme (LGPS) because their budget is not affected by the changes in England.

The most important point to understand is that not one penny of the money raised goes into pension schemes. It is simply a cash grab by the Treasury. The NHS schemes across the UK are £2bn in surplus each year and the Scottish LGPS funds are very healthy. UK Ministers keep saying that people are living longer so we need to pay more. Yes we are, although not as long in Scotland, which sadly is one of the reasons our funds are in better shape. But longevity is covered by agreements reached as recently as 1998 and 1999 in Scotland that allow for contributions to rise to cover real cost increases like this.

Secondly, we have recommendations from Lord Hutton that will mean staff working longer for less pension. Now some staff want to work longer and others have little choice because their retirement income in insufficient. £4,000 p.a. is the average local government pension. However, a blanket retirement age does not reflect the wide range of jobs covered by these pension schemes. A normal public service career was 40 years. Now that will eventually be going up to 50 years, and probably longer. Just think of the range of public service staff you engage with and reflect if 68 is reasonable for all of them.

Like much of Lord Hutton's report it is not the recommendations that are wrong but rather UK Ministers adding to them. He recommended a move from final salary to career average schemes. Now you can make a case for career average schemes, but UK ministers are using this as an opportunity to cut the value of pensions. Almost all the options they have tabled involve accrual rates that would result in smaller pensions on retirement.

It is the case that Scottish Ministers have not taken a position on the Hutton recommendations and the UK add ons. We have asked for assurances on these points, but have not received them as yet. However, we have seen a letter from the Treasury to Scottish Ministers on this point. That letter strongly implies that UK Ministers are planning to use their reserved powers to impose changes on Scotland. 

Thirdly, UK Ministers have imposed cuts in all Scottish pension schemes by changing the indexing of pensions from the RPI to the CPI. This will result in an average 15% cut in retirement pensions. You pay into a scheme all your life only to see it cut when you come to claim it. If this was a private company you could sue for breach of contract.

So these are the three main reasons for the current dispute. For our members in the NHS the issues are immediate and clear - pay more, work longer, get less. For LGPS members the issues are longer term. But of course pensions are a long term investment and this ballot is about protecting those long term benefits. 

Public service workers in Scotland are suffering from a pay freeze, attacks on terms and conditions, cuts in services and jobs. Our members understand that this attack on their pensions is the final straw. Enough is enough.

I have been a trade union negotiator for more than thirty years. You have to make judgements about when the people you are negotiating with are serious about reaching agreement. UK ministers are clearly in the business of taking money from our members and handing back an even poorer pension in return.

We will of course use every avenue to reach a negotiated agreement. But now is the time to support those negotiations with a big YES vote in this ballot.


Friday, 7 October 2011

Public service reform and the workforce

I was speaking at the Holyrood conference today - Roadmap for Change: Making Christie a Reality. A very good turnout for one of the better conferences on this issue.

My comments focused on workforce aspects of reform. Given the staff intensive nature of public services you might think that the workforce would be a key feature of government strategies. Sadly this has been far from the case over the years, with the workforce being an afterthought in a related HR strategy.

The Christie Commission report and the Scottish Government response is different. They make the workforce central to reform. The workforce is one of the four 'pillars' of Scottish Government reform plans.

Of course we shouldn't get too starry eyed about  this. There couldn't be a more difficult time to engage the workforce. A pay freeze, 21,000 job losses, undermining terms and conditions and of course the current attack on pensions. Public service workers didn't cause the crisis but they are paying the price.

Those staff who are left are being spread more thinly trying to deliver services. So it is important that there is some focus on their needs. Christie recommendations included:
  • Strengthening the public service ethos
  • Workforce development
  • Involvement in designing and improving their jobs
  • Improving the level of autonomy and empowerment
There are two contrasting approaches to workforce involvement in public service reform in Scotland today. A consultant led, top down, one size fits all approach - what I would describe as "one I prepared earlier". The other is a bottom up design of services involving staff and service users. The Systems Thinking approach championed by John Seddon is a good example of this. The former is exemplified by back office factory shared service solutions. Ironically the very approach championed by the sponsor of today's conference - Deloittes. Although interestingly it didn't appear in their presentation!

The bottom up approach can be implemented locally, but other issues need a national approach. These include:
  • A common competency framework
  • Interdisciplinary training
  • Partnership industrial relations
  • Job security
  • National frameworks on procurement, organisational change, pay and pensions.
Change is always difficult but involving the workforce and their trade unions at an early stage is essential to effective change management. There are good examples of this in Scotland, but as in other aspects of reform - others have a long way to travel.

Tuesday, 4 October 2011

Climate change

I was speaking at the STUC Climate Change Conference in Edinburgh today. My theme was Climate change: from law to action.

For the benefit of the climate change deniers I started with a brief recap of the climate change science evidence. The Guardian does a great interactive guide. For Scotland it means our temperatures have risen in every season over the past 40 years, we are 20% wetter with a shorter snow season and fewer frosts. So Scotland gets a bit warmer - not many complaints likely over that! However, it also means an increase in extreme weather events like heat, drought and rainfall, plus a sea level rise of between 10-18cm by 2050. This all has serious consequences for public services, markets, business and health.

For these reasons Scotland has adopted the strongest climate change legislation in the world. Targets to cut emissions by 42% by 2020 and 80% by 2050, together with annual targets of at least 3% per year. These targets are backed up by mitigation and adaptation strategies and a commitment to sustainable development. All public bodies have a duty to tackle climate change by assessing their impact and influence, taking action and measuring progress. Sadly the guidance is a bit weak with no statutory reporting and a very top down approach.

This is why we need to keep campaigning. Scotland is fortunate in having a powerful campaigning coalition on this issue in Stop Climate Chaos Scotland with a collective membership of 2 million. Targets are fine but they are beyond normal political cycles. So we need further steps on issues like green procurement, energy efficiency, transport and just transition strategies. The recent Spending Review prioritised roads over public transport and housing. So we need to keep Government on its toes. Targets are being met, but that is more due to the economic downturn than practical action to tackle climate change.

Next year's local government elections is a good opportunity to put some focus on local actions to tackle climate change. Too many  councils put the Climate Challenge plaque on the wall and do little else. They should all build emission cuts into their Single Outcome Agreements and the work of their Community Planning Partnerships. They should have local targets and adaption strategies that they report on annually. Sustainable development education should be undertaken in all schools together with Food for Good policies in all catering facilities. Waste management and energy conservation should be part of these strategies together with support for public transport, cycling, pedestrian facilities and access to land.

All public bodies and employers should recognise that more than half of all emissions are work related. Workplaces produce ten times as much waste as we do in our homes. That's why engaging workers in climate change is essential. Heroic leadership is not enough. Unions like UNISON have Green Workplace strategies that can help raise awareness and take important practical steps. Workers engaged in these strategies are also more likely to take them into our communities and the home. It can also cut waste at a time when the public pound is being stretched beyond breaking point.

So strong legislation with ambitious targets is great. But let's not get complacent. We need practical actions to deliver these commitments and really tackle the most serious threat to the planet.