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.

Thursday, 24 September 2015

In defence of the Human Rights Act

Abolishing the Human Rights Act would diminish the UK's standing in the eyes of the world, and Scotland should use every means at its disposal to resist these Tory plans.

I was at yesterday's Scottish Government event on human rights in Glasgow at which the First Minister gave one of the best articulations of the case for the Human Rights Act that I have heard for a long time. As Liberty Director Shami Chakrabarti said: 'I've been waiting a long time for a senior politician in power to make a speech like that'.

Nicola Sturgeon argued that repealing the HRA would be a monumental mistake, damage our reputation overseas. There are already countries across the world who are using the UK government's position to justify not implementing human rights decisions, including Egypt and Russia. Winston Churchill, the post war driving force behind universal human rights, would indeed be appalled.

The UK was one of the first to ratify the treaty with cross party support. That support was largely sustained when a Labour Government introduced the Human Rights Act in 1998. I am not always positive about Tony Blair, but this is a legacy we can all be proud of. As Nicola Sturgeon said yesterday, human rights are not always convenient for governments. They are not meant to be, they are there to defend the poor, the vulnerable and the dispossessed.

She gave some very clear commitments on how the Scottish Government will respond. She will claim that the legislation requires a Legislative Consent Motion, which the Scottish Parliament is unlikely to grant. It has been suggested that the UK government may seek to get around this by excluding Scotland. However, she said that there will be no deal at Westminster and under no circumstances will she treat this as an English matter - human rights are universal rights.

She also used human rights as another reason why her government was opposing the Trade Union Bill. The proposals have been criticised by Liberty, Amnesty International and the British Institute of Human Rights who said in a joint statement:

"It is hard to see the aim of this bill as anything but seeking to undermine the rights of all working people. We owe so many of our employment protections to trade unions and we join them in opposing this bill."

I followed this point up in questions asking in what practical ways did she think the Scottish Government and public bodies can use their HRA duties to oppose or not cooperate with the Bill?

The First Minister said they would oppose the Bill, using all their powers and there would be no voluntary cooperation. She also said they would seek to amend the Scotland Act to devolve employment rights to the Scottish Parliament.

The Scottish Government's support for the campaign is very welcome and reflects their approach to industrial relations through the Fair Work Convention. I also agree that employment rights should be devolved although even if Labour changed its position, which I would urge them to do, it still doesn't deliver a Westminster majority. A more practical measure would be to require a Legislative Consent Motion as the First Minister committed to doing for the HRA. The Welsh Government has already led the way on this and I simply don't understand the Scottish Government's unwillingness to explicitly take a similar stance.

We all too often take the human rights we enjoy in this country for granted. Even allowing fringe legal decisions to let the narrative drift away from the essential purpose of the Human Rights Act. The First Minister is to be commended for her strong defence of human rights. The Trade Union Bill will be a test of how far we are all prepared to go to defend our essential liberties.



Tuesday, 22 September 2015

Ruth Davidson should focus her fire on Cameron if she really wants to save the UK

If Ruth Davidson was really concerned about maintaining the UK, she would be better advised having a conversation with David Cameron, rather than moan at Kez Dugdale. He has done more to undermine the union in the last year than the SNP has managed in a lifetime.

So what has Kez done to earn a 'withering response' from Ruth?

Kez said: “I would like to think that people who supported Yes in the referendum and who might have that view again in the future have a home in the Scottish Labour Party. I want people who voted both Yes and No to see that the Labour Party is the vehicle for progressive change in this country, which is why I am completely comfortable and, in fact, would encourage people who have voted Yes in the past to take a look at our party and see that it is changing.”

She also expressed some sympathy with Johann Lamont's view that there should be a free vote on the issue. Kez said: "I’m not going to shut down my party’s renewal and debate because people hold a different position around independence. We should have a democratic debate within our party over the big issues of the day".

That a party should have a debate on such a big issue is hardly a radical development - although I suppose the idea that party members should actually decide policy may feel a bit strange to the Tories!

It is also a sensible political strategy for the Scottish Labour Leader. Not only did many Labour supporters vote Yes, but even many of those who voted No, are not Unionists. They made their mind up on the balance of the arguments and have no deep seated ideological commitment either way. A majority voted No because the case for Yes, primarily on economic grounds, just wasn't good enough.

Given that as many as a third of SNP voters now put independence way down their list of priorities, there is a real opportunity for a new approach.

That approach goes something like this. Scottish Labour understands the reasons many supporters voted Yes. If another referendum was to happen we would have a debate and members will decide our approach. The leadership will not be committing Labour to any campaign, certainly not a joint one with the Tories. In the meantime, we will argue for stronger devolution and use the powers we have to deliver a fairer Scotland. It's not a total solution to the mess Labour got itself into last year, but it is a decent recovery strategy.

As for Ruth Davidson, she would be better employed using her 'withering' on her boss David Cameron. It was he who decided to play the English nationalist card in the General Election, the EVEL none sense and much more. Policies like austerity and the Trade Union Bill simply drive more and more people living in Scotland into the independence camp. If the UK isn't working for you, why stick with it?

And by the way Ruth, similar arguments apply to the European Union. If Cameron undermines what's left of social Europe, there will be nothing for many of us to be 'positive' about.

Political unions only work if most people feel they have a real stake in them. Ruth Davidson should spend her time explaining to Cameron that he has to govern for more than big business and his hedge fund pals, if he really wants to save the UK.

Friday, 18 September 2015

Dragging university bosses out of the Middle Ages

The university principals’ campaign against the very modest proposals to modernise university governance in Scotland is now bordering on the hysterical.


The Scottish Government’s Higher Education Governance (S) Bill proposes an elected chair of the governing body and two places for trade union representatives. Yes, that’s just about it. These are the devastating plans that will bring our cherished institutions crumbling down – if you believe the hype from Universities Scotland, the HE bosses mouthpiece.


Universities rightfully value their academic freedom and that is not challenged in any way by this bill. In fact, the new definition, if anything, strengthens it. However, this freedom does not exempt them from being governed properly and to be run efficiently and effectively. Better governance of banks could have prevented the collapse of those banks and the ensuing financial crisis and the same is true for charities. There must be independent oversight of how senior management operates in any organisation.


Scottish universities receive a substantial amount of public investment, with budgeted spend of over £4 billion since 2012/13. The public rightly expects the highest standards of governance and accountability to be followed by institutions in Scotland.


The response to these proposals claims that these are radical changes, that the Scottish Government is ending universities independence, that trade union members on boards would not act in the best interests of the institutions and that there is a risk to their charitable status risking millions in philanthropic giving.


These are all nothing short of absurd. A huge range of organisations, including trades unions, are subject to a range of legislation and government oversight. No one believes that the finance industry has been taken over by government because there are rules governing how it operates. There are volumes of company law on how businesses must be run. We have trading standards, environmental health, charity laws, rules surrounding the delivery of energy and telecoms, a charity regulator, utilities and telecoms regulators. Setting out rules for effective governance is not taking over. No one from the Scottish Government will have a role on university governing bodies.


Reclassification by Office of National Statistics (ONS) as a public body is the latest scare story by Universities Scotland. The ONS paper regarding reclassification of further education colleges as public bodies uses universities as a contrast to demonstrate why colleges had been wrongly categorised in the past. It makes it clear why the position of universities is different from colleges and there is nothing in the Bill that relates to those issues. For example, universities have far less government money as a proportion of income and don’t require permission to borrow.


The Scottish Charities Regulator is equally clear about what constitutes a charity and again nothing in this Bill leaves a universities open to a challenge by the regulator. The governing document of the university would have to give ministers the power to “control direct or stop it from carrying out its activities”. It doesn’t.


Universities Scotland had to dig very deep in its objections to trade union representatives – in fact as far back as the 1970’s. It is astonishing that academic leaders can be so unaware of developments in employee engagement. Modern employers understand that employee engagement in running organisations is a very effective way to improve efficiency and effectiveness. Research into partnership working in the NHS indicates just how successful employee involvement is in running large complex organisations.


As Professor Ferdinand von Prondzynski, the head of Robert Gordon University, who led the governance review put it; Scottish universities are inherently conservative institutions which have "survived intact" since the Middle Ages. University bosses have treated their institutions as their personal fiefdoms since medieval times and what they really fear is transparency and accountability.


MSPs should ignored this hysterical misinformation campaign and bring universities, if only just a wee bit, into the real world.

Tuesday, 15 September 2015

Can more legislation raise care standards?

Effectively tackling harm, abuse and neglect in health and care settings is vitally important, but is more legislation the best way to address this issue?

I was giving evidence to the Scottish Parliament Health Committee today on the Health (Tobacco, Nicotine etc. and Care) (Scotland) Bill. The Bill covers three distinct policy areas: controlling non-medicinal nicotine vapour products (NVPs); tobacco control and smoking on NHS hospital grounds; ill-treatment and wilful neglect; and duty of candour.

UNISON supports the regulation of NVPs on the precautionary principle as we can see the potential risks of these products becoming a gateway to tobacco smoking that has done so much damage to public health. We also support a ban on smoking in hospital grounds.The more controversial proposals relate to legislating for a duty of candour and new criminal offences for ill treatment and wilful neglect.

Care professions generally operate within culture of openness that supports an open discussion of potential harm and the management of risk. It is not clear that a new duty of candour on health and social care services is the best or only way of securing a culture of openness and transparency. It can be argued that consideration should be given to all other avenues for achieving this policy goal. The desired culture change could be secured through guidance, training and improvement support, rather than legislation.

The Bill will certainly create additional costs in excess of the optimistic assumptions in the Bill's financial memorandum. It will increase workload and probably add some bureaucracy that front line staff can do without. IT systems are generally not adequate or joined up to be of much assistance. There will need to be significant training and support.

This legislation could also have unintended consequences. Criminal offences can lead to defensive practice and even a culture of hiding bad practice, rather than the intended transparency. The development of a culture where open and transparent reporting is the norm requires employers to establish clear, no-blame incident reporting systems from which to learn and improve. It is also the case that some definitions in the Bill are less than clear and there is a risk for double or even triple jeopardy, with employment and regulatory procedures.

On the other hand we have to accept that there is inconsistently of approach. Observations made by Healthcare Improvement Scotland has shown that ethical and policy guidance has largely failed on its own to improve rates of disclosure. Research by the Professional Standards Authority outline the impact on health and social care professionals to exposure to stressful situations and heavy workloads, often linked with a requirement to process complicated information and focus on specific goals and targets. This 'stimulus overload‘ is cited as a potential contributor to unreliable implementation of best practice regarding a duty of candour. Normalisation of abnormal events becomes a way of coping with high risk situations.

Legislation can help to change culture although it rarely does so on its own. It will also need leadership, better staffing ratios and proper training and support for staff. All of these are likely to be in short supply with budgets stretched because of austerity. However, the Scottish Government's approach is inconsistent. When we made a similar case for new legislation to protect workers from violence at work, they produced similar arguments against legislation as those who are critical of this Bill. We are at least consistent in recognising the role of legislation!

While the evidence to support legislation in NHS Scotland is thin, it is somewhat stronger in the social care sector. The introduction of commercial contracts has put enormous pressure on staff and managers to cut corners in care. UNISON Scotland's 'It's Time to Care' report highlighted these pressures and they have if anything increased with the introduction of self-directed care. Staff reported that they were not encouraged to report safety or even carer abuse issues, because managers were concerned that they would lose the care package. A recent Employment Tribunal case involving a care manager showed that she was instructed to accept packages even when there were no staff to deliver them.

One reason to welcome the legislation is the emphasis on organisations and not individual practitioners. In remains to be seen how this will work in practice, but it should mean that organisations and their managers recognise their responsibility to provide the necessary support to staff. We have to improve organisational cultures rather than just create a monitoring tool. The remedial and publicity orders in the Bill are useful tools, although we should recognise the internal pressures within commercial organisations to suppress adverse reports.

On balance we believe that legislating for a duty of candour and the new offences could assist in achieving the stated aims. The Bill places important duties on organisations and managers, not just front line staff. However, care services have to be properly funded, otherwise there is a real risk that this Bill will simply result in staff being scapegoated for the system's failings.


Monday, 14 September 2015

Why the Trade Union Bill is especially wrong in Scotland

The Trade Union Bill weakens our voice at work, and weakens our campaigning voice. It undermines the right to strike, union organisation and aims to make it harder for unions to win a fairer deal at work.

The Bill receives its Second Reading at Westminster today. It will:
·      undermine the right to strike for better pay and conditions or against unfair treatment
·      threaten freedom of speech, with new restrictions on protests and pickets
·      allow employers to use agency temps to replace striking workers
·      introduce new red tape that makes it harder for unions to run political campaigns
·      Reduce the rights of union reps in the workplace, making it harder for them to represent their members
·      Make it more difficult to join a trade union by ending check off/DOCAS agreements.

The Trade Union Bill has been described even by employer organisations as an outdated response. That is particularly true in post-devolution Scotland.

One of the early actions of the first devolved Labour-Liberal coalition was a Memorandum of Understanding between the trade unions and the Scottish Government, which has led – through different iterations – to the Scottish Government’s new Fair Work Convention. The Working Together report describes how Scotland’s industrial relations has taken a different direction, particularly in the public sector, the main target of this legislation. I highlighted the growing differences recently in an article in the Scotsman and in more detail in the Policy Now journal.

While industrial relations is a reserved matter to Westminster, sections of this Bill, particularly those dealing with check off/DOCAS and facility time, explicitly interfere in devolved issues of public administration. We have therefore argued that the Bill requires the support of devolved parliaments. The Scottish and Welsh governments support this position.

Scottish public bodies are also required under the Public Sector Equality Duty to have due regard to the need to eliminate discrimination in the area of employment. In an embarrassing error, UK government officials posted a final draft of the Bill’s equality assessment that shows that officials have serious doubts about the lack of evidence to support government assertions.

The Scotland Act also requires that human rights must be respected and realised at all levels of governance in Scotland. The Trade Union Bill breaches a number of the articles in the European Convention on Human Rights and in particular ILO conventions that the UK has signed up to. The human rights aspects have also been criticised by Liberty, Amnesty International and the British Institute of Human Rights. UNISON’s General Secretary, Dave Prentis, covers the sinister surveillance issues at Left Foot Forward.

The campaign against the Trade Union Bill has received broad political support across Scotland. Both the SNP and Scottish Labour oppose the Bill. Almost all of Scotland’s MPs will oppose the Bill today.

Scottish councils and other public bodies are starting to recognise the impact this will have on their industrial relations culture. Renfrewshire and Glasgow councils have tabled strong motions opposing the Bill and others are considering similar positions.

Both party leaders in Scotland have made the link between the Bill and the Tory approach to the workplace generally. They support the idea that employees working together for better wages, terms and conditions makes for a more productive workforce – good for business and good for society. This is a point well articulated by Will Hutton the former Director of the Work Foundation and leading academics. Vince Cable has described the Bill as ‘vindictive’ and even senior Tory MP, David Davis, has described the picketing proposals as like something out of Franco’s dictatorship in Spain.

Today’s debate, is an early stage in the parliamentary process. Our main focus has to be explaining to our members and the wider public that this grubby piece of legislation will not only damage workers rights, but it undermines good workplace relations and the economy.

Saturday, 12 September 2015

What would Keir Hardie say - Jez We Did?

The campaign that led to the election of Jeremy Corbyn has many resonances with the life and work of James Keir Hardie. Like Corbyn, he sought to present an understanding of socialism that was accessible to working people.

To commemorate the centenary of Keir Hardie’s death, Luath Press has published a book, ‘What Would Keir Hardie Say? It aims to highlight aspects of Hardie’s life and work and to draw from them relevance to the present day. Eleven authors have contributed chapters, including myself, and the new leader of the Labour Party, Jeremy Corbyn. They cover his guiding principles, campaigns, Home Rule and how he made his mark.

Keir Hardie was a man of action, or as he described himself, ‘above all an agitator’. He described his mission as ‘to stir up a divine discontent with wrong’. However, this doesn’t mean he had no guiding principles. Richard Leonard explores these through his writings and Bob Holman points to his temperance and his Christianity. Jeremy Corbyn’s chapter highlights a third principle, internationalism, and from that his opposition to colonialism and war.

The energy generated by the Labour leadership campaign was remarkable in our time. However, when you read of the numerous meetings and travels of Keir Hardie, you have to marvel at his commitment to so many causes. William Knox describes his trade union activity and his central contribution in bringing the trade union and socialist movements together with the formation of the Scottish Labour Party, the ILP and then the Labour Party. Barry Winter points to the challenges Hardie faced, many of which resonate today

On one issue he was way ahead of his time, women’s suffrage. Fran Abrams explores why it was so central to him, despite the opposition of many in the labour movement

My own chapter covers the topical issue of Hardie’s support for Home Rule. Despite the attempts by some nationalists to adopt Hardie, it is clear that his Home Rule was a reflection of the Liberal tradition he was part of. As he moved away from that tradition to socialism, even Home Rule became less of a priority. Hardie was a socialist, not a unionist or a nationalist.

The final chapters of the book cover how Hardie made his mark. Cathy Jamieson covers his impact in Ayrshire, his home despite his many travels. John Callow, who has recently edited a new version of Hardie’s ‘From Serfdom to Socialism’, covers his period as the MP for West Ham. Owen Smith does the same for his time as the MP for Merthyr Tydfil in South Wales

Finally, Melissa Benn pulls together the strands of Hardie’s principles and campaigns. While he championed popular causes, he wasn’t afraid to challenge mainstream thinking. Again, some clear resonance with the Corbyn campaign today. As Pauline Bryan concludes in her introduction, "this leadership election will leave a legacy of a type of politics that is closer to that promoted by Keir Hardie than we have seen for generations."

The book is available, from Luath Press, in all good bookshops, and a few bad ones! There is a fringe meeting on the book at the Labour Party conference and book launch at Waterstones in Sauchiehall St, Glasgow on Thursday 24 September 2015 starting at 7pm. The Keir Hardie Society will also be holding a fringe event at the Scottish Labour Party conference in October.

(Yes, that is a Union Jack on his wall at home)


Wednesday, 9 September 2015

Corbyn's energy policy is not a throwback to the 1980's

Jeremy Corbyn's energy policy proposals have caused some excitement in the sector, even if those reacting haven't always read it properly.

The headlines scream that Jeremy Corbyn is in favour of the "big six" energy firms being taken into public ownership. They usually miss the caveat "in some form".

He explained: "You can do it by majority shareholding; you can do it by increased share sales, which are then bought by the government in order to give a controlling interest". This would eventually lead to nationalising the six companies: British Gas, SSE, Eon, Npower, Scottish Power and EDF Energy, and also the national grid. Or as Corbyn put it, "I would want the public ownership of the gas and the National Grid . . .I would personally wish that the big six were under public control, or public ownership in some form."

His energy policy proposals are much wider than just public ownership. These are his Ten Energy Pledges

1) My over-arching commitment will be for Britain to take the lead in developing the clean Energy Economy of the future.

2) As leader I would establish an Energy Commission to draft a fundamental shift in UK energy thinking.

3) The Commission will be tasked to produce a route-map into tomorrow’s ‘smart energy’ systems that will:

• Deliver more, but consume less

• Use clean energy before dirty

• Put energy saving before more consumption

• Use smart technologies to run localised storage, balancing and distribution mechanisms

• Shift the costs of grid access and grid balancing from clean energy to dirty

• Be open, democratic, sustainable and accountable (in ways that today’s market is not).

4) The Commission will be charged with bringing new partners into energy policy making. These will include local authorities, communities, energy co-operatives, and ‘smart’ technology companies that are already working on tomorrow’s ‘virtual’ power systems and new energy thinking.

5) As leader I will conduct a root and branch review of energy market subsidies; moving away from the notion of everlasting hand-outs; instead, using public support as ‘transition funding’ that transforms Britain’s energy infrastructure.

6) I will expect the energy industry, not the public, to meet the costs of their own clean-up.

7) I will look to re-define of the roles of Ofgem, National Grid and the Competition and Markets Authority, to promote a more genuinely open, competitive and sustainable energy market; one in which there are more players and more clean energy choices than we have today.

8) I will examine ways to allow communities to be owners of local energy systems, with the right (as in other parts of Europe) to have first use of the energy they generate themselves.

9) We must socialise our energy supply and move toward breaking-up the failing energy cartel. Instead, I want to look at the role of the state as guarantor of last resort; with more direct responsibility for the nation’s back-up generation, high voltage grid and interconnectors; directly ensuring that Britain’s ‘lights never go out’.

10) I would commit Britain to binding international climate change commitments; making national targets, local ones too, and devolving both the necessary powers and duties to meet these obligations.

We can see from these pledges that far from being a Morrisonian model, he is talking about a much more decentralised energy system, engaging communities and local authorities.

Stephen Hall writing in The Conversation, gives us a sympathetic view of the proposals.

He argues that this is, "no aggressive nationalisation plan. What it is, is a manifesto for a more decentralised and democratically accountable system, inspired more by present-day Germany than 1980s Britain."

Hall gives us four reasons to suspect his plan is more revolution than 1980's throwback.

Introducing genuine competition. "Competition" in the UK energy market has left consumers bamboozled. His plan would encourage consumers to buy energy from municipal utilities or co-operatives. Some new consumer options are being seen in the UK. For example Nottingham City Council has set up its own energy company with a name that sends a clear message: Robin Hood Energy.

Help for smaller energy startups. The current grid setup creates barriers to innovation and is holding back new technologies. There is no technical reason why you shouldn’t be able to choose to buy energy from local sources. By creating local energy markets, smaller but still viable businesses can flourish.

Cheap access to green investment. The proposals commit to pursue energy investment through a National Investment Bank. While this model has seen success in Germany, what is less well understood is how important citizen banks (that we don't have in the UK) have been in deploying this investment. Hall argues that it will be important to deliver this investment through the right institutions at the right level so citizen investment can complement state finance.

Democratising the energy sector. Essentially more citizen influence over the energy system – and not just through supposed consumer "choice". There are good Danish and North American examples of this.

Hall concludes:

"It is clear from the manifesto that the energy policies of the Corbyn camp are anything but a throwback to monolithic state utilities. There is potential for more competition through more diverse energy business models, a clear willingness to make space for smart energy innovation, a call for different approaches to energy system finance, and a platform for more plural approaches to energy governance. Whether or not the reader agrees with these proposals, it should be clear that they are not "old solutions to old problems", but provocative responses to increasingly urgent challenges."

A more critical analysis comes from former the shadow energy minister, Tom Greatrex, in Utility Week.

He highlights some apparent inconsistencies in the proposals, but concludes that this is a calculated political strategy, he said; "Jeremy Corbyn’s statements about re-opening pits in South Wales might seem inconsistent with the document his campaign produced, but appealing simultaneously to Greenpeace members and former mining communities is a calculated move. As crude and simplistic as it might be, it also helps Corbyn justify his longstanding opposition to nuclear power and dismiss its low carbon baseload merits."

However, even Tom accepts that the idea of nationalising utilities is popular with the public, he said: "This isn’t a surprise to energy companies, well aware that part of the recent legacy of rising bills, confusing tariffs and poor customer service is a nostalgia for public ownership."

He also points out that the wider proposals are working with the grain of progressive energy policy. Widening ownership, more suppliers, a more competitive market, re-cast regulation, community energy, localised storage and demand management, local authorities and consortiums developing smart power systems - is a combination of previous Labour policy, an acceleration of what is happening as technology has advanced and the challenges large utilities face already.

As with much of the hysterical media reaction to Jeremy Corbyn's campaign, his energy proposals are certainly not a throwback to the 1980's. Yes, they are radical, but they are intended to offer practical, modern solutions to long standing problems. I might not agree with everything in the proposals, but it is refreshing to find a politician who is prepared to promote radical, and popular, solutions that rattle the vested commercial interests.


Monday, 7 September 2015

Workers of the world unite to save your pensions!

Workers pensions across the world are facing similar challenges and we need to learn and act together.

I was at the 2015 Workers Capital Conference today, meeting with union pension negotiators and trustees from across the world. There is great best practice that we need to learn from, but also recognise that funds are invested internationally. We are investing in each other's communities and economies. Pension funds own half of the assets in the world and we should act collectively.

The first session looked at the role of trustees and shareholder activism.

The Californian teachers pension fund had some good advice for union pension trustees. They distilled these into seven effective ways of working.

  • No place for fear. Don't be intimidated by the experts and hand over your fiduciary duty to the 'money people'.
  • Stay curious. Be inquisitive and don't be afraid to ask questions.
  • Be unwaveringly ethical. Remain true to those you represent. Without this funds are vulnerable to manipulation.
  • Think objectively. Not enough to know what to do, be ready and willing to share views.
  • Work hard. Read the materials, understand best practice. But recognise there is never enough time to do everything.
  • Keep focused. Money managers are skilled at distracting trustees.
  • Listen first. Speak less and listen more. Intervene at the right moment, don't just follow the money managers.

The Dutch pension fund ABP talked about shareholder activism. Examples included tackling poor labour conditions for textile workers in Bangladesh and Burma. Lack of safety standards and resolving the 'leukaemia dispute' at Samsung. Anti-union practices at Walmart. The latter resulted in four years of work before divesting. Their strategy involves intense dialogue, asking key questions and site visits. Sanctions included voted against directors remuneration and finally divestment, but only when all else fails. All of this is much more robust than the sort of ESG engagement advisors in Scotland pursue.

The U.S. Bakers union have a similar strategy through their capital stewardship programme. Part of their organising department because they see this work as building the union. Companies with good governance perform better, particularly those who treat their workforce fairly. They work with other funds collaboratively to target specific issues and sectors, particularly retail companies. An example of their engagement was the retail firm GAP, promoting a living wage and a good jobs strategy.

While there were different views on priorities, there were some common issues. Infrastructure investment to boost the economy (but not PPP), climate change and workers rights are probably the three main ones and there was support for some broad common goals. Pension funds are long term investors and there was an interesting debate about the pace of change funds should expect from the companies they invest in. Fiduciary duty shouldn't be a barrier to achieving common union goals.

The second session looked at pension fund management and transaction costs. The best approach is the Dutch model who have a level of understanding and transparency that we should aim for. Scottish funds have very little grasp of the true transaction costs of their equity investments. The Dutch now have legislation regulating this approach and this includes an asset management contract that is reducing costs.

Unsurprisingly, commercial asset managers in the UK resist this approach - even those who can do it in The Netherlands, because they have to! There is no good reason for telling us what something costs - if they can't tell you don't buy their services!

We probably only know about one third of the real costs. They are much higher than we think, probably three times higher at least. This matters when pension funds are under financial pressure. When resources are tight we should look closely at costs. It is also a fiduciary duty on trustees to know the true costs of their scheme, so they save contributions, not pay for profits.

Cutting costs is best done by bringing services in house. The top performing LGPS schemes in the UK are largely delivered by in house teams, cutting out the rent seekers. Active fund management is an illusion to fool us into trading that makes huge profits for the asset managers and hedge funds. It was interesting to hear that even New York public pension funds are coming to the same conclusion about active fund management.

The lessons for Scotland are that we should introduce systems that make real costs transparent, bring services in house, and largely get out of active fund management. Another lesson is that size matters and we should pool assets.

A lot of these issues appear complex to the average union trustee. But the value of today's conference is the sharing of information and developing common approaches. There are few more important issues than our member's pensions and there is much to do.

Tuesday, 1 September 2015

Scottish Government Programme 2015-16

The Scottish Government’s final programme for this parliament is a modest affair in terms of legislation, while seeking to address administratively some recent criticisms of its performance in education, policing and the NHS.

The new bills of most interest to UNISON members include:

Abusive Behaviour and Sexual Harm Bill. Creates a new statutory domestic abuse aggravator and a new offence of sharing private intimate material. It will also enhance protections for victims of harassment. This follows similar action in England and Wales on ‘revenge porn’ and should be welcomed.

Budget Bill. The spending review will be truncated this year as the Scottish Government decides to await the UK ‘autumn’ statement. While the shorter consultation has been criticised by some, I think it’s sensible to see the whole picture, particularly at a time when the UK government are again cutting spending. It would be helpful if the UK government returned to a genuine autumn statement,  rather than what is now a winter one.

Burial and Cremation Bill. This will implement the Bonomy Commission recommendations on the cremation of infants and children with new regulation and inspection arrangements for crematoria, burial authorities and the funeral industry.

Lobbying Bill. This aims to improve public awareness of lobbying activity and will introduce a register of lobbying activity. It was Neil Findlay MSP’s members bill that the government took over. As he said in parliament today, the late introduction indicates a certain lack of enthusiasm for it.

Private Tenancies Bill. Introduces a Scottish Private Rented Tenancy and removes the 'no-fault' ground for repossession, meaning a landlord can no longer ask a tenant to leave simply because the fixed-term has ended. There will be some protection for tenants against excessive rent increases, including the ability to introduce local rent controls for rent pressure areas. We will need to see the detail, but it looks as if it will fall short of the calls in the ‘Living Rent’ campaign and elsewhere for stronger action on rent increases.

There will also be a Bill proposing a five-year term for the next parliament to avoid a clash with UK elections.

Not all government action requires legislation and the programme includes administrative action. Apart from the usual rhetoric, elements are clearly aimed at diffusing criticism of the government’s performance.

A National Improvement Framework for Scottish Education is the government’s response to the education debate on attainment. The key proposal is a new system of national, standardised assessment of children in P1, P4, P7 and S3, covering literacy and numeracy. The EIS have welcomed the fact that this is not the English league table approach and local tests are already in place in most areas. It is less clear if this really will make much difference in improving educational attainment that is much more about poverty than school tests. The government’s wider plans such as work with disadvantaged parents and library membership, may contribute just as much.

The childcare hours entitlement is to be increased to 1140 hours a year by 2020. While greater resource is welcome, we really need to think bigger as set out in the UNISON Scotland childcare charter.

The challenges facing Police Scotland are to be addressed through a review of national and local police governance. In addition, they will implement the recommendations of the HMICS review of call handling and statutory guidance on police stop and search. Cynics might well say that a review is the Scottish Government’s standard response to difficult issues and the claim that reform has “made policing in Scotland more accountable both locally and nationally” is not credible. As I said last week, the resignation of the Chief Constable and the SPA Chair is an opportunity for a proper look at Police Scotland. It remains to be seen if this is a serious review or just a cosmetic exercise. Scottish Labour’s own review will be helpful in keeping up the pressure.

There will be a new National Clinical Strategy for the NHS following on from the current ‘national debate’. Again, largely process at this stage and it remains to be seen if the government is willing to take difficult decisions about the location of services. Establishing an independent national officer to review the handling of whistleblowing cases aims to strengthen the whistleblowing arrangements for NHS Scotland staff. New investment is also to be targeted on child and adolescent mental health services in response to recent concerns. The section on social care is really disappointing. It simply doesn’t set out the radical action needed to deal with crumbling local services.

Local government gets scant mention in the programme. In fairness, big issues like reform of local taxation await the report of the Commission established to develop a cross party consensus. Yet another review of planning to ‘streamline etc’ will be greeted wearily by planning staff.

When further powers are devolved the Government will introduce a Social Security Bill to mitigate the impact of UK Government welfare cuts and abolish the bedroom tax. There is also a welcome commitment to abolish Employment Tribunal fees.

While there is nothing specific on the Trade Union Bill, ministers have said that facility time and check off is the prerogative of Scottish Ministers. The Scottish Labour leader supported this view and urged the government to demand a Legislative Consent Motion on these aspects of the Bill. As I said at the STUC conference last week, this is vital if we are to get these issues shifted to Holyrood and take practical action.  She also made some strong points about the role of trade unions and the right to strike. This is an issue that many politicians duck, but she made a clear linkage between that right and not just better pay and conditions, but better public services. I covered related issues in my article in today’s Scotsman.

Kezia Dugdale’s response to the programme was measured and avoided the oppositionalism of her predecessors. She highlighted the weaknesses in the government’s record, given the length of time they have been in office, but supported sensible measures. The key message was that we should move on from complaining about what we can’t do, to being ambitious about what we can do.

Overall, no big surprises in this programme. There is a welcome consensus on many practical issues and probably a clearer indication of the battle lines in next year’s Scottish Parliament elections.