Archive for November, 2011

Budget agreement

So the courtship is over, a new relationship starts now. With Labour and who, you might ask, – the Liberal Democrats. Yes, with the Liberal Democrats in Wales. Why? Because a deal has been done with Labour on the budget.

What is the deal? An extra £20 million for a new Pupil Deprivation Grant, which will stand at £32.04 million in total for 2012/13, to reduce the impact of poverty on educational attainment.

The additional £20 million will be reflected in the Final Budget to be tabled on Tuesday 29 November, and represents a 16.5% increase to the total additional allocation made in the Draft Budget.

The Liberal Democrats have been pushing hard for a deal so that they could creditably go into the local elections with a fig leaf that separates them from the coalition with the Conservatives in Westminster. Their campaign message will be slightly easier to sell now.

Whether the local Labour parties in Swansea, Cardiff and Wrexham welcome this deal is another matter. In these areas they are challenging the Liberal Democrats for control of the councils.

So why not a deal with Plaid Cymru? Well, Plaid Cymru were pushing for £45 million. A price to high for Labour. It also helps Carwyn Jones with his backbenchers who hated the One-Wales agreement with Plaid Cymru. Having a smaller less challenging party on board is much more to their liking.

It can safely be said that an early coalition deal with Plaid Cymru is now very remote. Indeed there is little appetite within Plaid Cymru for a repeat coalition with Labour.They have to decide on their new leader and then the future direction they as a party will take.

As to the budget itself, there will be a vote on the draft budget next week, before finally putting it to bed on 6 December. It all now becomes a bit of a formality with the government having ensured majority support for next years finances.

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From riches to riches

It’s a closed shop and a very effective it is. No, not a trade union but the closed doors of the UK’s Board rooms.

How effective a closed shop it is, was highlighted this week in the High Pay Commission’s final report titled Cheques with Balances: Why tackling high pay is in the national interest.

In commenting on the report the chair of the High Pay Commission Deborah Hargreaves said,

There’s a crisis at the top of British business and it is deeply corrosive to our economy. When pay for senior executives is set behind closed doors, does not reflect company success and is fuelling massive inequality it represents a deep malaise at the very top of our society.

The British people believe in fairness and, at a time of unparalleled austerity, one tiny section of society ’“ the top 0.1% -continues to enjoy huge annual increases in pay awards. Everyone, including each of the main political parties, recognises there is a need to tackle top pay. That’s why we are saying there must be an end to the ‘closed shop’ that sets top pay and that pay packages should be clear, open and published to shareholders and the public.

It couldn’t be put better. The country is facing a strike in the public sector over cuts to pensions, working families in Wales are finding themselves in homeless hostels because what they earn isn’t enough to pay the rent and put food on the table and the long term sick are seeing their benefits cut.

And what of our captain’s of industry? Are they sharing the pain, bearing their share of the burden? Not on your life, they’re all rushing to get their snouts in the trough.The report points the finger at the bosses. Showing them to be a grabbing self serving lot, voting themselves stratospheric pay increases.

Redistribution has certainly taken place, but not from the rich to the poor, quite the opposite, wealth flowed upwards to the top 0.1%.

Coincidently the Office of National Statisitics, yesterday, reported that the gap between the highest and lowest paid had widened considerably. The bottom tenth of earners saw their pay creep up just 0.1% between 2010 and 2011 while the top tenth saw their pay grow 18 times faster.

With inflation running between 4 and 5 per cent many at the lowest end of the scale saw their pay cut in real terms.

The pay of waiters and waitresses ’“ who are mostly part-time workers ’“ fell 11.2% year-on-year to £5,660. Hairdressers’ salaries fell 4.5% to £9,599, while cleaners’ remuneration fell 3.4%. This explains why many are not making ends meet and that there is an increase in the number of homeless.

The industrial unrest we’re about to see in the public sector is surely a reflection and consequence of their pay only going up by an average 0.3% last year. It is less than half the increase of that of the private sector.

At the other end of the scale, chief executives and directors of leading organisations saw an average salary of £112,157, a rise of 15%. The salaries of senior corporate managers also saw a hike up with a substantially increase ’“ up 7.1% year-on-year to £77,679.

Inequality of income is not new, it happened under Labour too. The gap widening in their term of office as they sucked up to tthe City. But, at least, they could claim that when they were in charge, real wages increased in every income group.

Now the choice facing many, is no pay or low pay.

The gap between the four nations is also wide. The median salary in London of £27,560 and in Wales is nearly 30 per cent lower at £19,472 and Northern Ireland’s £18,494, the lowest-earning region of the UK. Average earnings in Scotland were £20,862.

It is a fact that with less cash in the pockets of ordinary people consumer growth takes a hit. And economic recovery? Well it don’t happen. The rich may get the pleasure of a large wad of cash. But it’s only the poor that can spend in such numbers to get a country’s economy moving again. Why is it that politicians never seem to understand this basic fact.

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Easier for bosses to dismiss staff

It’s going to be made a great deal easier for bosses to get rid of their staff if the government get their way. Of course, it’s not a vindictive move against the workers, but done with the best of motives. And the motives? To boost economic growth and cut back on red tape.

What are the changes? The ninty day consultation period that is required by law when twenty or more redundacies are anounced is to be reduced by two thirds to a thirty day period.

After lobbying by business leaders, the number of cases going to employment tribunals will be cut and the qualifying period for workers to be able to claim unfair dismissal will rise from one to two years’ service.

But, there is deadlock between the Conservatives and the Liberal Democrats on the proposal to allow bosses to sack ‘poorly performing’ staff without explanation.

Whilst this particular proposal is on hold because it’s a step to far for the Liberal Democrat, they are going along with the other proposals.

The ideas are contained in a Downing Street review, headed by venture capitalist Adrian Beecroft and a Conservative Party member and donor.

Understandably these changes are opposed by the trade union who say that it’s return to “Victorian employment practices”.

Such proposals will add to the insecurity of workers that are already worried about their jobs because of the general economic downturn. The result will be a general reluctance amongst the work force to go out to spend thus making a dire economic situation a whole lot worse. The last thing required at the moment, is to dent further, consumer confidence.

It is doubtful that the proposals will add a great deal to streamlining business but it will add to the general feeling that this government just doesn’t care about ordinary people. There is a feeling abroad that the Conservative majority in government are working to the agenda of their business chums and the Liberal Democrats are being dragged reluctantly along with this anti-worker agenda.

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