Guest Blogpost: Richard Lynch – End This Depression Now!

Paul Krugman, winner of the Nobel Prize in economics, is one of the world’s strongest opponents of the austerity policies which have taken a grip in most western economies since the beginning of the 2007 global recession. He believes that these policies have made recession worse and is an advocate of government spending to jump-start affected economies and secure a rapid, powerful recovery. He says that in the Great Depression (of the 1930s) leaders had an excuse: nobody really understood what was happening or how to fix it.

Today’s leaders don’t have that excuse. We have both the knowledge and the tools to end this suffering. Krugman makes his case in the book End this Depression Now! It costs around £14.99 from good bookshops and you are urged to get a copy now.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

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Guest Blogpost from Richard Lynch: “Do you understand pension auto-enrolment?”

Less than a third of the UK workforce are members of an occupational pension scheme but this will begin to change when the last Labour government’s auto-enrolment scheme  starts to be introduced later  this year. The scheme is being phased in and employers with 120,000 employees or more will be required to begin auto-enrolling workers, aged 22 and above and earning at least £8,105 a year, into a qualifying pension scheme from 1 October 2012.  Smaller employers will have to start auto-enrolling workers in stages between then and June 2015, when employers with fewer than 50 workers will finish the process. Contributions to the pension scheme will come from employers, employees and tax relief, and will start at a very low level (one percent for employers and employees). This will increase gradually until October 2018 when contributions from employers, employees and tax relief will reach a minimum of 8% of earnings.

This is a complex scheme with pitfalls as well as advantages and it is vital that union reps understand it. It is also vital that there is hands-on union involvement in deciding arrangements in companies and organisations, and that reps are able to respond quickly to any attempts to worsen existing pension arrangements or to drive down pay to fund the new scheme.

Labour Research Department’s booklet Workplace pension reform – a practical guide to auto-enrolment can help in this respect. It costs £6.30 and can be obtained from LRD, 78 Blackfriars Road, London SE1 8HF (020 7928 3649) or on-line from www.lrd.org.uk. Get a copy now.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Employment rights roundup

National Minimum Wage rates are to be increased for adult workers and apprentices from 1 October 2012 but current rates are to remain frozen for young workers. The adult rate will be increased by a miserly 11p to £6.19 an hour and the apprentice rate will be increased by an even more miserly 5p to £2.65 an hour. Rates for young workers will remain unchanged, at £4.98 an hour for 18-20 year olds and £3.68 an hour for 16-17 year olds. This means that all workers on the minimum wage will suffer a pay cut in real terms and it is disappointing that the Low Pay Commission (which has union as well as business representation) should have unanimously recommended the new rates. Still, realising that they will never be required to work for such a pittance, must have made the decision easier for Committee members.

State benefit rate changes from 6 April 2012 include: Jobseekers Allowance – up £2.80 a week to £56.25 for under-25s and up £3.50 a week to £71 for over-25s; Statutory Maternity and Paternity Pay – up £6.72 a week to £135.45; Statutory Sick Pay – Up £4.25 a week to £85.85. However Child Tax Credit, which had been available to parents earning up to £41,000 a year, will now be restricted to parents earning up to £26,000 (one child), £32,000 (two children) and £38,000 (three children). Working Tax Credit is also being restricted and couples with children will now have to work 24, rather than 16 hours a week to qualify.

Unfair dismissal protection could be weakened for up to 2.7 million employees following the decision to double (to two years) the qualifying period for making unfair dismissal claims to Employment Tribunals, from 6 April 2012. Even though workers in employment at that date will still be able to make claims after one year’s service, there will be a disproportionate effect on some groups, according to the TUC. These will include women working part time, employees from black and minority ethnic communities and young workers, whose length of service tends to be shorter than for the majority of employees. The coalition argues that watering down unfair dismissal protection will help boost recruitment but the TUC, rightly in our view, believes it will encourage a ‘hire and fire’ culture which will lead to increasing numbers being shown the door.  However, it shouldn’t be forgotten that short-service workers who are dismissed will sometimes be able to make ET claims on issues such as discrimination. A union member I have been representing was recently dismissed after complaining that the manager was being racist towards her. Unable to claim unfair dismissal because of short service, the member made a claim of race discrimination and victimisation (suffering a detriment as a result of complaining about discrimination). That resulted in a decent out of court settlement, despite the fact that an unfair dismissal claim could not be made.

Moving to part time work after maternity is not a legal right in the UK, although there is a right to request it and employers are supposed to give serious consideration to such requests. It is therefore encouraging to note that HSBC has announced that it will now guarantee a part-time role at current title and salary grade, if requested, to all staff returning from maternity or paternity leave. This is believed to be the first time that such a large company has offered this guarantee and it is hoped that it will increase pressure on others to do likewise. HSBC also offers 14 weeks’ maternity leave on full pay (as opposed to the statutory six weeks at 90% of pay) and up to 12 days leave for fertility treatment a year.

Parental leave rights should have been improved from 8 March 2012 but the coalition has postponed the improvement. The current rule is that employees with at least a year’s service can take up to 13 weeks’ unpaid leave (in one week units)  for each child, provided the child is under age 5, under 18 if disabled or within five years of placement if adopted. There had been EU agreement that this would rise to 18 weeks but this will not now happen until 2013.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Paying the price for recession and stagnation

It is now four years since the worst global recession for over 70 years began to impact on UK jobs – and working people are still paying a high price for it and for the stagnation which has followed it. During those four years:

  • Unemployment increased by over a million, from 1.61 million to 2.67 million, and is still increasing.
  • 2.68 million people, 10% of those employed at the start of the recession, were made redundant.
  • Underemployment doubled, with the number of people in part-time jobs because they couldn’t find full-time employment rising from 670,000 to a record 1.34 million.
  • Unemployed people made 14 million claims and repeat claims for Jobseeker’s Allowance and received JSA payments which were worth a mere 10% of average full-time earnings.

But it was not just the unemployed and underemployed who lost out, as a recent report from the Chartered Institute of Personnel and Development showed:

  • Two thirds of those who returned to employment after being made redundant found that their pay, on average, was 28% lower than before, and lower still for those who couldn’t find work on the same hours as before.
  • Those who managed to keep their jobs suffered as well because the recession and unemployment resulted in lower pay increases or none at all, and left the average worker £3,000 a year worse off than if pay had increased at pre-recession levels.
  • The cost to employers of making 2.68 million people redundant varied from sector to sector but is estimated to have cost a total of £28.6 billion.
  • And the cost to the economy, in terms of lost output, is estimated to have been at least £87 billion (6% of GDP) and possibly as high as £135 billion (10% of GDP).

All of this shows that it is not just the unemployed who have been paying a high price for the recession in jobs but people in work, many employers and the economy as well. And unless action is taken to get the economy growing again, something which did not feature in the recent budget, we will continue to pay a high price for probably years to come.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost: Richard Lynch on Inflation

There was a further fall in inflation in February, the latest month for which figures are available, but prices are still rising faster than wages and than in competitor economies.

The figures for the year to end February 2012 (with end January figures in brackets) are as follows:

Retail Prices Index (RPI)                                                                –                              3.7% (3.9%)

RPI excluding mortgage interest (RPIX)  –                              3.8% (4.0%)

Consumer Prices Index (CPI)                                      –                              3.4% (3.6%)

The main downward pressure on the RPI came from price rises in motoring expenditure and fuel and light, while the main downward pressure on the CPI came from domestic electricity and gas, recreation, transport and electrical goods.

Nonetheless there were still upward pressures on both the main indices. For the RPI these included: alcohol and tobacco (6.1%), beef (11.6%), lamb (13.2%), pork (9.1%), butter (10.3%), coffee and beverages (13.7%), electricity (10.1%), gas (17.5%) and vehicle tax and insurance (10.9%). Upward pressure on the CPI included increased costs of fuels and lubricants (5.3%), education (5.1%), jewellery, clocks and watches (8.6%) and transport insurance (11.6%).

UK inflation, as measured by the CPI, is now only the seventh highest in the EU but is above the EU average of 3% and the Eurozone average of 2.7%. It is equal to the inflation rate in Italy but is higher than in France and Germany (2.5%), Spain (1.9%), Greece (1.7%) and Sweden (1%). The UK rate is also higher than that in China (3.2%), the US (2.9%), Switzerland (-1.2%) and Japan (0.5%).

Predictions are that inflation will fall further over coming months but these are likely to be affected by the current record high prices for oil, anticipated higher prices for food, and the increase in the price of postage stamps (by 14p to 60p for first class and by 14p to 50p for second class).

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Another bad year for jobs?

Unemployment
Unemployment (Photo credit: born1945)

2011 was a bad year for unemployment and underemployment and, if the latest Labour Market Statistics are any guide, 2012 looks like being at least as bad. These statistics, which mainly cover the three months to end January 2012, show that:

Unemployment was 2.67 million, up 28,000 over the quarter and 148,000 over the past year. The unemployment rate was 8.4% of the economically active population, up 0.1% on the quarter and at a level which was last exceeded in October 1995 (when John Major was Prime Minister).

Unemployment amongst JSA claimants was 1.61 million in February, up 7,200 on the previous month and 162,000 on the previous year. This left the claimant rate at 5%, unchanged from January but up 0.5% on the previous year.

Youth unemployment was 1.04 million, up 16,000 over the three months to end January and equivalent to 22.5% of economically active 16-24 year olds. However, separate figures showed that the unemployment rate for black youth has been rising at almost twice that for white youth and that unemployment amongst young black men has risen from 28.8% to 55.9% in the past three years.

Underemployment also increased with the number of people working part-time because they couldn’t find full-time jobs up 110,000 to 1.3 million, the highest figure since comparable records began in 1992.

On the slightly less negative side, there was a fall in long-term unemployment – by 12,000 in the number of those unemployed for over a year and by 25,000 in those unemployed for over two years. However this still left 855,000 in the former category and 405,000 in the latter. There was also a fall in the economically inactive rate for 16-64 year olds not working but not included in the unemployment figures. Numbers in this group fell by 27,000 to 9.3 million, giving an inactivity rate of 23.1%. However, the fall was largely due to the effects of a government campaign which contributed to cutting the number of people in the long-term sick category by 67,000 to 2.09 million. In addition to this, the number of job vacancies increased by 15,000 to 473,000 but this still left an average of 5.6 unemployed people chasing every vacancy.

Unfortunately these crumbs of good news appear unlikely to presage a downturn in unemployment, as the economy is still flat-lining, consumer spending and business investment are at historically low levels, companies are still going bust and the recent budget did little to change the situation. The public sector, which cut 270,000 jobs last year, is also continuing to make cutbacks and recent Office for Budget Responsibility projections indicate that a total of 700,000 jobs will have gone by 2015 and 880,000 by 2017. There is also likely to be a post-Olympics jobs cull in certain sectors, including in Balfour Beatty where an estimated 1,500 jobs are believed to be at risk.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: “A windfall for the rich and we’re paying for it!”

The March budget was delivered at a time when the economy is stagnating, output is still below 2008 levels, public and private investment is falling and unemployment and poverty levels are rising. Yet the coalition picked this time to give a windfall to the richest people in the country by announcing a tax cut of from 50p to 45p in the pound for earnings over £150,000 a year. And the people who will have to pay for it include pensioners and some of the poorest families in the country.

The windfall is worth an estimated £3 billion to the 300,000 highest earners in the UK – an average tax cut of around £10,000 a year or over £40,000 a year to the 14,000 members of the group who earn over a million pounds a year. Amongst the people who will benefit from it are Barclays’ Bob Diamond (whose 2011 package was worth £25 million), Reckitt Benckiser’s Bart Brecht (£12.1 million), Shell’s Peter Voser (£10 million plus), Barclays Rich Ricci (£10 million), FT-owner Pearsons’ Marjorie Scardino (£9.6 million), HSBC’s Stuart Gulliver (£7.1 million) and GlaxoSmithKline’s Andrew Witty (£6.7 million). The Chief Executives of FTSE 100 companies (average £4.2 million) will also benefit handsomely, as will many members of the coalition cabinet, including David Cameron who is expected to be in line for a £3,000 saving.

Companies will also benefit from the budget as a result of the decision to cut corporation tax from 26% to 24% but this is unlikely to interest companies like Amazon, which had UK sales of over £7 billion in the last three years and apparently paid no UK corporation tax at all!

But it is working people and those who can least afford it who will be expected to pay for this windfall to the super rich. They will include 4.4 million over 65s who will be £83 a year worse off on average because of Osborne’s ‘granny tax’ and people who become pensioners from next April, many of whom will be £285 a year worse off because more of their pension will be taxed. People getting tax credits will be penalised as well, due to the main element of working tax credit being frozen and eligibility criteria being changed for working and child tax credit. One result of this could be that as many as 850,000 families on modest and middle incomes could lose all of their child tax credit, worth around £545 a year. And around 212,000 working couples earning less than £17,000 a year could lose all of their working tax credit if they are unable to increase their working hours. This could mean a loss of over £3,000 a year and would be a disaster for some of the poorest working families in the country.

Labour was right to describe the changes to tax and benefits as one of the most ruthless assaults on the finances of low and middle income earners ever seen. And Ed Milliband was right to launch a savage attack on the Chancellor’s proposals on budget day. But Labour needs to show more leadership and organise a far more aggressive campaign against the coalition’s inept handling of the economy, bias towards the super rich and attacks on working peoples’ interests. The Unions also need to show more leadership and all of us need to stop agonising and start organising in our own workplaces and communities as well. Austerity for the poor is not the answer to Britain’s problems! We need to reject it and fight back!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: How has work changed in the past 60 years?

There is a lot of talk at present about how life in Britain has changed over the past 60 years – but how has work changed? The Chartered Institute of Personnel and Development (CIPD) looked at this recently and, amongst other things, found the following:

  • The working age employment rate for men has fallen from 96% to 75% and has risen from 46% to 66% for women.
  • The proportion of people working part-time has increased from 4% to 25%.
  • The number of people in manufacturing jobs has fallen from 8.7 million to 2.5 million. However, the proportion of people in managerial, professional and technical jobs has risen from 25% to 44%, while the proportion in sales and customer services has risen from 6% to 16%.
  • Trade union membership has fallen from 9.5 million (40% of workers) to 6.5 million (26%), while the number of people in personnel (HR) has risen by 2,000% from 20,000 to 400,000.

One wonders how far the last two statistics go in explaining the many problems facing people at work in Britain today.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Employment rights’ roundup

Unfair dismissal – Employees currently have to be with an employer for one year before they can make a claim for unfair dismissal to an employment tribunal, but this qualifying period is increasing to two years with effect from 6 April 2012. However it is important to note that there are transitional arrangements which mean that anybody whose period of continuous employment began before the above date will still be able to make a claim after one year’s service. Employees who begin work on or after 6 April 2012 will have to work for two years before they can submit a claim.

Employment law consultations are taking place on a number of proposed legislative changes at present, including on further changes to unfair dismissal legislation, redundancy consultation periods and TUPE. George Osborne, Minister for Misery, has been urging employers to support proposals which will allow small businesses to get rid of staff under a compensated no-fault dismissal law, without the risk of being taken to an employment tribunal. If enacted, this will allow unscrupulous employers to fire staff almost at will and will significantly reduce the rights of the 13.8 million people who work in Britain’s 4.5 million small businesses. There are also consultations under way on reducing the 90-day consultation period which applies when it is proposed to make 100 or more employees redundant. And there are proposals to reduce transfer of engagement rights by making it easier for employers to cut pay and conditions after a TUPE transfer has taken place. The TUC fears that this proposal, if enacted, will lead to even more outsourcing and will erode the terms and conditions of already low-paid service sector staff, including in cleaning and catering.

Accident reporting is to be made easier for employers from 6 April 2012 when changes are made to RIDDOR (the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations). Incidents currently have to be reported to the Health & Safety Executive when a worker is unfit for normal work for over three days following an accident. That period is now being increased to over seven days, which safety’ campaigners fear is sending the wrong message to employers about the importance of the incidents/injuries in question.

Criminal records – Changes are being proposed to the Rehabilitation of Offenders Act which will mean that fewer ex-offenders will have to report spent convictions to employers when applying for work. The new proposals mean that community service orders will be considered spent after one year (rather than four at present). Custody sentences of up to six months will be considered spent two and a half years after leaving prison (rather than seven), custody sentences of six months to two and a half years will be spent six and a half years after leaving (rather than 10) and sentences of between two and a half and four years will be spent after 11 years (rather than never, as applies now).  Custody sentences of over four years will still always have to be declared, as will convictions for people who want to work with children.

Bullies beware – A scientist has won an employment tribunal award of almost £30,000, for constructive and unfair dismissal, after he faced a ‘barrage of shouting’ and unpleasant and derogatory treatment from a professor in Manchester University. This is yet another reminder to those in authority that they must treat people at work with dignity and respect.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Unemployment figures are still dreadful

The latest Labour Market Statistics, which mainly cover the three month period to end December 2011, provide more bad news on jobs and suggest that there is worse to come.

Overall unemployment increased by 48,000 to 2.67 million over the quarter, giving an unemployment rate of 8.4%. The figure for the number unemployed was 179,000 higher than a year earlier and included 860,000 who have been out of work for over 12 months. The number unemployed for two years or more was 423,000 over the same period.

Male unemployment increased by 16,000 to 1.55 million and female unemployment increased by 32,000 to 1.23 million. Youth unemployment increased by 22,000 to 1.04 million, giving an unemployment rate for 16-24 year olds of 22.2%.

unemployment
unemployment (Photo credit: Sean MacEntee)

The number of people working part-time because they could not find a full-time job increased by 83,000 to 1.35 million over the quarter, the highest figure since comparable records began 20 years ago.

The number of ‘economically inactive’ people fell by 78,000 to 9.29 million, giving an economic inactivity rate of 23.1%. (Economically inactive people are 16-64 year olds who are not working but who are not included in the unemployment figures because they had not been looking for work over the previous four weeks and were not available to start work within the following two weeks. They include the long-term sick, home makers, early retirees and those who have simply given up trying to find work.)

The number of Jobseeker’s Allowance claimants increased by 6,900 in January 2012 to 1.6 million, giving a claimant count of 5%.

The number of job vacancies increased by 11,000 to 476,000 in the three months to October 2011, but this still left an average of over 5.6 unemployment people chasing every vacancy.

According to the Financial Times, most economists expect unemployment to rise further over the coming months, with many predicting a peak of 2.8 or 2.9 million.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.