Marxism In A Total Quality Management Setting Part 1 #GE2015 #TQM #Deming #Marx #KarlMarx #WEDeming

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I have been promising for a while now to write up this case study and here goes.

Attendance management is a major issue for businesses, public sector bodies and voluntary and community sector organisations.  However, of the three sectors, the public sector is the one most often put under the media microscope as to the level of its sick absences.  There is usually a comparison with the private sector that is never other than detrimental to the public sector.

Firstly, I challenge the validity of such comparisons on the grounds that such a crude approach is of little or no value to addressing the issue of attendance management, but it does generate excellent ratings and viewing figures.  Secondly, I would contend that the figures for sick absence in the public sector are more likely than not to be more accurate than those for the private sector.  However, even if the absence levels were similar then that would not be a sufficient argument to not look at how matters might be improved.  Incidentally, when next a media outlet runs an attendance management story check to see if their own organisation’s sick absence record is included in the debate.  I would be very surprised to learn if it is.

The Anglo Saxon Business School of Management approach to tackling sickness absence invariably involves a mix of carrots and sticks.  The balance between carrot and stick varying as much with the ethos of the organisation as it does with the effectiveness of the carrots and sticks being dangled and applied.  The best that may be said for many of these approaches is that they are unlikely to increase the level of sick absences.

The stick approach tends to turn sick absence management into a disciplinary matter thereby brigading it with those who take unauthorised leave.  Quite often such an approach increases stress levels for the absentee and their manager.  Consequently, the level of time off work may increase not fall.  Alternatively, those who feel intimidated by the process and so return to work earlier than they should may not only spread infections to co workers, but also need more time off a few days later to fully recover from their own illness.  Stick policies have a tendency to drive up absence and are toughened to address the increased absence and so on.

The carrot approach is harmless although sometimes demeaning.  Gold stars for good attendance.  An end of financial year letter congratulating one for not having a day off sick for the whole year from the District Manager and similar.  A slightly different approach is to be more proactive, for example by arranging lifestyle checks, providing free gym memberships, courses in time and stress management.  Alas, I never seemed to have the time to put the stress avoidance techniques into practice!  Seriously, if you are suffering from sick organisation syndrome then no amount of yoga or massage sessions are going to make you any less prone to illness.

Sick organisation syndrome brings me neatly to the Royal Mail and the approach they adopted to addressing attendance management about 25 years ago.  RM had recently begun to practice Total Quality Management and felt attendance management was an area on which they might usefully deploy the TQM tools and techniques.  The first aspect of the approach is to determine whether or not you have a problem.  If you do, is the problem partially or totally within your control?  A problem caused, for example solely by the weather is unlikely to be controllable and so may only at best be mitigated rather than resolved.  If the problem is within your grasp to address is it a significant one?  Is it worth spending time and effort on addressing it rather than some other aspect of your business or organisation’s operations?

For RM, they felt they had a problem with levels of attendance management, that it was at least partially something they might influence and that it was a significant issue deserving attention as a matter of priority.  Sick absence affected service levels, customer satisfaction and increased the salary bill through recruitment of casual staff to cover absences.  In addition, absences caused more work for those not off sick and so increased the likelihood of them becoming unwell if their workloads were above the normal level for any significant period of time.  Staff morale is (or should be) very  much of a concern, particularly to those whose business is serving members of the public whether they be patients, passengers or customers.  Take note, TQM works as well in the NHS or a Jobcentre as on the shop floor at Jaguar.  I know, I have seen the improvements made through TQM in Jobcentres, I have been told by TQM clinicians about how it is used to improve care on acute wards and I have seen it in action at Jaguar’s Castle Bromwich plant.

RM decided to use one fairly typical postal district as a starting point for further analysis.  They then gathered together all the sick notes for a given time period and divided them up by type of illness or condition.  They then used a Pareto approach where the piles of notes were set alongside each other with the highest pile on the left descending to the lowest pile on the right.  They then worked through the piles removing those outside of their control such as legs broken on holiday, appendectomies etc.  They were then left with two sizeable piles and some much smaller ones.

The first pile was a collection of foot related conditions.  Some of these cases were diagnosed as trench foot.  The largest number of absences was down to delivery workers being unable to get around on foot.  Some years before, RM had provided each member of staff with two good quality pairs of shoes each year with an expectation that they wear them, unless medically advised not to do so.  One day RM hired some management consultants to identify areas where they might ‘save’ money.  They had recommended withdrawing the business provided shoes.  RM  acted on their recommendation and staff wore whatever they felt was suitable and/or could afford.  Most of the foot related absences were traced back to this saving.  A case of a known unknown.  We know we will save money, but not what the real cost, if any of doing so will be.  The consultants had of course collected their fee and were long gone.  Incidentally, TQM is to many management consultants like garlic is to a vampire.

The second pile was injuries incurred by van drivers, in particular those collecting mail from post boxes.  Many of the injuries were shoulder related.  Further investigation revealed drivers were quite often not wearing their seat belts and/or sliding closed the driver side door.  Consequently, when they braked for any reason they ran the risk of injury.

These two categories of condition made up the bulk of the causes of the absences so remedying them would significantly improve attendance management.  Back came the shoes on the same conditions as before.  The collection drivers were told to wear their seat belts and close the doors, but crucially the timings of their rounds were increased, the number of points from which they collected reduced and more drivers and vans provided.  You will note, I trust, that both solutions require actions by management and staff to be effective.  By the way, trades unions like TQM, because an evidence based approach rarely weakens their arguments.  Moreover, discussing data about which both management and trades unions agree helps to makes negotiation generate more light than heat (or so I have been told).

One other aspect of the TQM approach is that it is scalable so absences felt not worth investigating at a District level might well be worth looking into at an individual office level.  For example, Ms X (no names, no pack drill) worked in a Jobcentre and routinely asked for leave at the last minute and quite often had her requests turned down.  She then frequently went sick for the same period for which she had asked to take as leave.  Ms X is certainly the sort of case that would trigger at least an informal warning.  That it did not do so did nothing for the morale of her co workers.  In addition, Ms X’s husband invariably used to ring in to the office saying she was not well and usually told us precisely what day she would be returning to work.  It never seems to have occurred to either of them that sick leave was not an addition to Ms X’s annual leave entitlement.  Ms X used her sick absences to cover half term holidays and so on.

You did not need to adopt a TQM approach to match Ms X’s absences with school holidays.  However, a TQM approach does create a basis on which responses to absences by different individuals may be made on the basis of their personal circumstances and not in line with a one size fits all policy.  A policy approach that invariably increases absence rather than reducing it.  A flexible policy, sensitively, but firmly applied to all those absentees is good for them, their co workers and those for whom they work.

RM’s variation on Ms X was Mr Y who quite often asked for Thursdays off at short notice.  And mostly he was not allowed the time off.  It became apparent through analysing his (self certified) sick notes that he had a tendency to develop 24 hour bugs for those Thursdays he had wanted to take off, but which he was told he had to work.  And the Wednesday evenings before these Thursdays were co-incidentally those days when the football club he supported were playing an away fixture.

I must stress that the above is not an example of good practice to be slavishly copied by people wanting to reduce the number of sick absences within their organisation.  It is a case study.  A big concern of those who advocate TQM is that people tend to ignore the process by which improvements are made and simply pick the solutions they hope may work for them.  The reason why many management consultants fear TQM is that once you have learnt how to apply the tools and techniques then your need for their services reduces significantly.  You design your own systems and processes to deliver the goods and services that meet the requirements of your service users, customers, patients and passengers.  Moreover, as those requirements change you evolve your systems and processes to address those changes.  TQM accepts, if not embraces the need for continuous process improvement.  The organisation that does not evolve to meet changing customer need dies or at least loses goodwill.

No political party shows much sign of grasping the fact that unless we challenge perceived wisdom, the Anglo Saxon Business Model, then they may make whatever pledges they like, because British management (in whatever sector of the economy) is mostly incapable of making those pledges a reality in a way that will make the electorate feel they have been met.  In particular, both ukip and the Green Party have a touching faith that business as usual (in Whitehall and local government) would deliver their policies effectively and efficiently were they ever to form part of a Government.  Andy Burnham has at least shown signs that he recognises that a TQM approach may be the only way to both shore up the NHS and allow it to develop its services to meet the need of individual patients.

TQM poses a challenge to extremists on both the right and the left.  It says to both groups that a confrontational approach in labour relations is destructive and that an evidence based approach creates common ground between both parties.  It also says that organisations and businesses exist solely to serve their users and customers, because only if they do so will they create value and profits.  It says to many on the right that cuts invariably result in increased costs and to a few on the left that savings may be achieved whilst maintaining and improving service delivery.  Moreover, that savings create headroom within budgets and therefore the answer, in part, to shortages of funding is to make those savings to create that headroom.  Not everything in the public sector may be improved by throwing money at it.

In fact, given the state in which management in both Whitehall and local government are now in, it is unlikely they could make effective use of additional funding until their ability to manage it has been significantly improved.  Those on the left who think the public sector may be turned around on a dime sometimes seem more out of touch with reality than some of ukip’s supporters.  As for the Green Party’s middle class, middle management (quite often salaried public sector) supporters then they strike me as being part of Britain’s management problems rather than the solution to them.  IDS and Universal Credit in practice are what Natalie Bennett and the Basic Income are in theory.  The only difference being that the Green Party is well intentioned.  Note to the Green Party, railways in whatever sector they are should be run in the interests of passengers not the passengers, their workers and the people.  You will see from the above than when RM effectively addressed attendance management they improved customer service and the well being of their staff.

We appear have tried everything else, except an evidence based approach to management.  Time we consigned the Anglo Saxon Business School of Management approach to an industrial heritage museum.  Time we kissed goodbye to the thinking that said Japan was dumping cars at below cost price in the USA, because US car firms could not produce them at the same price and make a profit.  The likes of Toyota could and still do.  Toyota’s big recall a few years back was because they had turned their backs on over half a century of practising TQM.  A senior executive went public, said they had made a mistake and that they were going back to TQM.  Such a statement was a major loss of face.  When US car firms were being ‘dumped’ on their Chief Executive Officers and Presidents had the bare faced cheek to go to Japan (with Bush Senior) to put their case.  Bare faced?  They earnt many times more than their opposite numbers in Japan and yet their companies were not as profitable as those of the competition.  Moreover, their counterparts in Japan only received salaries about 11 or so times as much as their shop floor workers.  In the USA no one would consider themselves valued as a CEO or President, if they were not at least offered more than 11 times as much in salary as their front line staff.

One final point, TQM, because it incorporates a philosophy of Plan, Do, Observe and Act is the closest many of us will ever come to continuous (r)evolution.  Yes, dear reader, TQM is Marxism in a management setting.

Further Reading

William Edwards Deming

Total Quality Management

Total Quality Management (and Ethical Values)

The UK Retail Industry: A Case of (Paying Lip Service to) TQM at Tesco Supermarket?

Five Deming Principles That Help Healthcare Process Improvement

Deming’s Quality Principles: A Health Care Application

Do Doctors Need Deming?

Selected Articles By Dr Deming

The Deming Institute

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Does #MichaelWhite, #Guardian Know What Grown-up Migration Debate Would Look Like? #RochesterandStrood

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“Downing Street is seeking to respond to the threat from the right from Ukip.  But Cameron also wants to show Tory Eurosceptics he is serious about reform.  They have said in recent weeks that the plan to crack down on benefit tourism showed No 10 was not serious about introducing major reforms because there is relatively little evidence of benefit abuse by EU citizens.”

Barroso warns Cameron that arbitrary migration cap would breach EU law

(Guardian, Sunday 19th October, 2014)

Michael White of the Guardian thinks thatPaul Collier, a distinguished Oxford professor of public policy, a weighty, progressive intellectual of international repute, author of Exodus,” “has thought about” migration “harder than most of us.”

White refers to this article by Collier as an example of Collier’s weighty pondering.  Pondering that at one point refers to assimilation and at a later point, integration.  White may be unaware that these are two very different concepts, not in any way interchangeable and that assimilation is something for which the BNP calls and which, since Doncaster (see ‘Culture’), ukip is demanding too.  I would expect Collier to know the difference and know just how inflammatory calls for assimilation happen to be.

When it come to attitudes towards Social Security, Collier says, “As to diversity, it involves a trade-off: as it increases, variety is enhanced but cohesion reduced.  Variety is good but, unfortunately, as cohesion erodes voters become less willing to support generous welfare programmes.

There is a universal psychological tendency for inconvenient truths to be denigrated, and this is certainly inconvenient for the left. But it is not speculation: I describe some of the supporting research in my book Exodus, and rigorous new experimental research by the Oxford political scientists Sergi Pardos and Jordi Muñoz finds that immigration has just this effect, especially on benefits that are targeted at the poor.”

Firstly, when was there a time in the last forty years or so that the United Kingdom has had “generous welfare programmes”?  Moreover, this is not the United States of America, we do not have welfare programmes.  The word programme is used in the UK in connection with back to work support, for example the fatally flawed Work Programme.

Secondly, attitude surveys going back 30 yerars show that voters have, starting then, become less tolerant of recipients of what many, like the Daily Mail, parts of ukip and IDS, believe to be generous welfare hand outs.  Bizarrely, some of those holding those views are themselves long term beneficiaries of Social Security.  Was there a lot of (im)migration going on in the early 1980s or was Mrs Thatcher ramping up the rhetoric against people signing on?

Thirdly, where is this law of nature that says as diversity increases, variety is enhanced, but cohesion reduced?  Does that not suppose that there was cohesion at the outset?  For the record, for reasons more than simply their discriminatory attitudes, me and mine have precious little in common with ukip’s supporters, except where we were born.  We would, regardless of their views about migration and their attidudes towards the presence of locally born ‘foreigners’, still not be cohering with this group.  We are, for example, opposed to foxhunting.  Bearing the latter in mind, may I observe that I find ukip’s support, from top to bottom, to be unspeakable?  They are a pack of economic and social Luddites.  Let me be frank, I find it hard not to think about them, in the way that they think about migrants, as much as I try not so to do.

As an aside, are migrants from other European Union countries remaining in the United Kingdom indefinitely?  We are using the words, migration and immigration, as meaning the same thing, but an immigrant is someone who arrives with the intention of staying.  Surely we should be using migrant to describe people who behave like migratory birds do?  Surely that is surely a grown up way to debate this issue?  Collier, as shown above, uses the word immigration.  Migrant is, in the mouths of some, becoming anyone who is not white British, period.

White says that, “Unlike most of us, Collier even has a practical remedy for David Cameron as he makes a poor fist of trying to slow down inward migration from Eastern Europe without overtaking Angela Merkel’s patience or the limited imagination of rules-bound Brussels apparatchiks. As another Labour MP whispered to me during the Eastleigh by-election, one reason why would-be migrants of the poorer kind risk freezing at Calais is that Britain’s welfare payments are not all determined by past contributions: “We could change that without EU permission.” ” Collier actually says, “Perhaps it is that, unlike in the rest of Europe, access to our welfare system is not determined by past contributions.”  in other words, Collier has no evidence for his ‘solution’, but White turns it into one!

We may, of course, change how one becomes eligible for Social Security payments without EU permission.  The Coalition started a major round of doing just that on coming to power.  Those changes apply to all seeking to claim, regardless of country of origin.  One might think that Collier and White (sounds like a 1950s department store) had not heard of Personal Independence Payments and Universal Credit.

White should perhaps check Collier’s weighty article of 16th March, 2012, “My fiscal nightmares” wherein Collier says, “A prudent government protects the balance sheet while running a large fiscal deficit. It does so by drastically changing the composition of public spending. Public consumption is massively reduced, concentrating on components that commit spending far into the future. The top priority is therefore to reduce entitlement spending: benefits and pensions.”

Is the current debate providing Collier with cover for arguing again for his top priority?  Collier also buys into the idea that the UK faced, in 2012, the same position as Greece.  I beg to differ and I have got Robert Skidelsky, Professor of Political Economy at Warwick University and the author of the definitive biography of John Maynard Keynes, on my side:

“The national debt is a burden on future generations: This fallacy is repeated so often that it has entered the collective unconscious. The argument is that if the current generation spends more than it earns, the next generation will be forced to earn more than it spends to pay for it.

But this ignores the fact that holders of the very same debt will be among the supposedly burdened future generations. Suppose my children have to pay off the debt to you that I incurred. They will be worse off. But you will be better off. This may be bad for the distribution of wealth and income, because it will enrich the creditor at the expense of the debtor, but there will be no net burden on future generations.

The principle is exactly the same when the holders of the national debt are foreigners (as with Greece), though the political opposition to repayment will be much greater.”

Post-crash economics: some common fallacies about austerity

As we hold our own debt, we have a vested interest in not calling it in lest we bring down our economy, down around our ears.  I am assuming Collier is not necessarily a Keynesian when it comes to National Debt?

Whatever else Collier may be, he seems to know as much about Social Security systems both here and elsewhere in Europe as the Mayor of Calais.  You may still be able to claim some benefits if you travel or move abroad, or if you are already living abroad.  What you’re entitled to depends on where you are going and how long for.  This is where you, as a United Kingdom citizen, can claim benefits:

European Economic Area (EEA) countries

The following countries have benefits arrangements with the UK:

  • Austria
  • Belgium
  • Bulgaria
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Iceland
  • Ireland
  • Italy
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Romania
  • Slovakia
  • Slovenia
  • Spain
  • Sweden

Switzerland is not a member of the EEA but is treated as an EEA country for certain benefits.

Other countries with UK benefits arrangements

The following countries have social security agreements with the UK:

  • Barbados
  • Bermuda
  • Bosnia and Herzegovina
  • Canada
  • Channel Islands
  • Macedonia
  • Israel
  • Jamaica
  • Kosovo
  • Mauritius
  • Montenegro
  • New Zealand
  • the Philippines
  • Serbia
  • Turkey
  • USA

Let us not forget moving or retiring abroad and, of course that you have the right to live and work in any European Economic Area (EEA) country, if you are a UK citizen.

For the record, Collier and White, no one is assessed for entitlement to tax credits on the basis of National Insurance Contributions, regardless of where they come from within the EEA, including the UK.

I have already written in some depth about the Social Security contributory principle here so please treat that post as an addendum to this one.  I would add that making changes to our own systems in order to seek to deny non contributory Social Security to migrants would be costly, particularly if the aim were to run, for example, three types of Jobseeker’s Allowance (Contribution Based, Income Based and Migrant Income/Contribution Based) alongside each other.  There would be even greater potential for under and over payments and, arguably more potential for fraud amongst people receiving MICB JSA.  Not forgetting, of course, that JSAPS and ESAPs are sinking as Universal Credit grinds to a halt on the slipway.

I have spoken to Michael White via Twitter about means testing the free bus passes for old people.  He was waxing lyrical about means testing entitlement to the pass saving money, apart from the fact he had no evidence from a Social and Economic Cost Benefit Allowance to prove his point, he was blithely unaware of the costs involved in means testing.  Costs that would have to be offset against any savings.  He nearly went all Mcvey over me, along the lines of when she said that, although the bedroom tax was not saving money, it was a matter of principle to carry on with it.

Collier says, “The economic consequences of a” migration “pause would be negligible as long as students were exempted.”  Unsurprisingly, someone nestling in the groves of academe does not want those groves denied of any income, whether home grown or from abroad.  Good to see though that Collier, like I, value students from abroad studying here, but I expect that we will reap significant benefits from their, hopefully, happy time here at some future date and not in the here and now.  Where is Collier’s evidence, given his concern with the here and now, that migrant students are a benefit to UK plc whilst studying here? More of a benefit, say, than migrants working and paying Income Tax and National Insurance whilst they work here?

Also, I have news for Collier and White, there is, once again, a skills shortage in the construction industry:

Bricklayers’ boom highlights ‘skills timebomb’ in UK construction industry

SMEs: is enough being done to tackle the UK’s skills shortage?

Skills shortage fears temper surge in UK construction

Construction sector skills shortage blamed for holding back housebuilding

Kipper Williams on the construction skills shortage

I would like to make a couple of points with regards to the first two articles.  “As builders take on new work, a shortage of skilled tradespeople has allowed subcontractors to ramp up their hourly rates” (first article).  The Polish plumber and his friend, the bricklayer will be stepping in to take up some of the slack, one presumes.  A colleague of mine in the mid 2000s had an uncle working in the building industry in the east of England.  His relative said that the British bricklayers were good, they could put up a brick wall, leaving a space for a gate, perfectly well.  The Poles were better, they could build a brick arch over the gap between the two walls.  The British had been trained by the UK taxpayer to NVQ2 and the poles to NVQ3 by the Polish taxpayer.

Did ukip have to import that out of work Irish actor to appear in a poster, posing as a bricklayer, because British bricklayers did not share ukip’s stance and/or were too busy?  If you are a bricklayer and out of work at this time may I suggest, tactfully, that it is because no one thinks you are employable?  Moreover, that if there were no migrants you would still be at the back of the queue? I would go so far as to say that there is an overlap between that tiny minority of UK residents defrauding the UK Social Security system and ukip’s unemployed supporters.  They have been presenting themselves at the door during party canvassing exercises in the same way they used to down at the Jobcentre.  We know who you are, chaps, because some of you are the real (not Daily Mail) scroungers we used to sanction back in the day.  There is a certain irony in that ukip, one group of whose supporters favour going further thah IDS, is being supported by another group that would be the main target of their version of the War on Welfare!

Colier says, “It would be salutary for business to find that it had to train the existing workforce rather than poach trained workers from poorer countries: what is good for business is not necessarily good for the rest of us.”  Good to know he remembers some basic labour market economics, except British companies have a century old tradition (pre dating our entry into the EU) of poaching from each other.  In addition, Enoch Powell, when Minister of Health in the late 1950s was actively recruiting medical staff from the Caribbean to work in the NHS.  And, London Transport recruited Afro-Caribbean people to work on the Underground and the buses.

Amusingly, Collier, desirous of reducing migration to save the public finances, forgets that too often employers expect the taxpayer to train their existing workforce.  Meanwhile, whilst we await the Second Coming of Learning and Development and many British companies renouncing their devotion to ‘tried and tested’ Anglo Saxon business methods, the cost of building projects, many funded by the taxpayer will rise and rise.  And that is without factoring in the labour market impact of major construction projects like HS2.  And, every time we go into a recession, the first thing businesses usually cut is their learning and development budgets.

“The skills shortage problem is not unique to the UK.  Federation of Small Businesses national chairman, John Allan, says, “Many businesses across Europe are struggling to fill vacancies with appropriately trained staff.  The problem can’t be addressed until the education system does a better job of preparing young people for the world of work.” ” (second article).  Translation, there are increasing  job opportunities opening up for UK residents elsewhere in the EEA.  As an aside, I must find the Guardian article, wherein a careers adviser of 30 year’s standing remarked that employers at the start of his career had been saying, “The problem can’t be addressed until the education system does a better job of preparing young people for the world of work!”  Plus ça change, plus c’est la même chose, Collier and White?

Michael, I am up for a grown-up debate on migration.  May be we may have one when you stop throwing out lines like, “Neither the right’s “crowding out” complaint about competition for low-skilled jobs (my Labour friend’s complaint too), nor the left’s “good for growth and tax receipts” scenario – shared by the City and big business – has much real evidence to support it.”  Comment is free, but facts are sacred, but not to the point where they must never be deployed, surely?  Where is your evidence to disprove either or both assertions?

Back in 2005, well before all this talk of swamping kicked in, there were 600 Cuban nurses working at the Queen Elizabeth Hospital in Birmingham.  Why?  Because of the demographic time bomb.  An aging population means an aging workforce.  ukip’s pensioner supporters are going to need to accept the fact that a migrant may be the only person available to clean up their sick in their care home? We are not talking about people elbowing others out of the way for jobs.  After all, migrants are rarely of pension age so they will in part compensate for the fall in the number of people in the working age population and, by paying tax, contribute towards the cost of the pensions of elderly people, including ukip supporting pensioners.

Collier of course says, “There is a good case for confronting their delusions and racism, and countering the misleading drizzle of anti-immigrant anecdotes, but this would not make them accepting of continued high immigration.”  How about, no migrant, no pension?  I think that might be the kind of sound bite that would hit home on the doorstep.

I was at a meeting with the QE Human Resources staff about six or so years ago.  A senior nurse recruiter said we have projected that very soon the NHS will need to recruit 50% of all school leavers to maintain its current staffing level.  Recessions come, recessions go and demographic changes remain relatively unaffected.  Of coursed, tightening public sector pension entitlement and raising the state pension age may go some way to responding to this issue.  however, actuaries have predicted that for every year working over 60, teachers reduce their life expectancy.  If they retire at 65 they run a significant risk of dying within a year.  I suspect neither Collier nor White expect to find themselves working to a point where it affects their life expectancy in such a dramatic way.

Michael, Collier is proposing that we engage in managing decline rather than take advantage of the benefits to UK plc of exploiting the opportunities presented by free movement of labour.  Opportunities for jobseekers happy to work abroad and vice versa.

By the way, Michael, that graduate you mentioned herein, “At one point in those 17 years a Labour MP, now dead, said to me: ”How can my young, unskilled constituents hope to compete for jobs with bilingual and highly-motivated foreign graduates?” It was a good point and I think of it every time I buy a beer or a coffee from one of those young graduates.”  Was he or she fluent in English?  Does it follow that he or she is at least bilingual?  That lots of tourists come to London (and Birmingham) and that having skilled, versatile staff who speak good English is good for the tourist industry (and UK plc)?  And if tourism spend increases then jobs growth results?  Have either you or Collier heard of the Multiplier Effect (see page 58)?  Incidentally, I am a Treasury standard Green Book Appraiser.

Might it not be a bad idea, if we helped “those (stereotypical) young, unskilled constituents to learn” a few other languages so they might look for work elsewhere in the EU?  Also, Michael, most employers do not look for vocational qualifications before recruiting so perhaps we should not be so quick to describe these stereotypes as lacking in soft skills?  And while we are on the subject of Europe, business and jobs why not read this post.

May be I am getting a bit cynical, but Paul Collier seems to be setting out to follow the trail blazed by Goodwin and Ford of Revolt on the Right Fame.  What they know about psephology and political campaigning, he seems to know about labour market economics and the UK Social Security system, but they are still making a mint out of ukip (and migration).  Migration is certainly improving the income of some people!

ukip Out To Worsen Conditions Of Temporary (Farm) Workers!

Migrants Price Local People Out Of Agricultural Jobs?

#ukip Out To Worsen Conditions Of UK Born Temporary (Farm) Workers! #GE2015 #RaceForNumber10

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In his often-quoted speech in 1909 on Second Reading of the Bill (that became the Trade Boards Act 1909), Winston Churchill, then President of the Board of Trade, explained that the Boards were necessary to ensure that workers received a living wage in industries where the bargaining strength of employers greatly outweighed that of employees:

“It is a serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate that evil ……………. Where in the great staple trades in the country you have a powerful organisation on both sides, where you have responsible leaders able to bind their constituents to their decision, where that organisation is conjoint with an automatic scale of wages or arrangements for avoiding a deadlock by means of arbitration, there you have a healthy bargaining which increases the competitive power of the industry, enforces a progressive standard of life and the productive scale, and continually weaves capital and labour more closely together. But where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes the trade up as a second string, his feebleness and ignorance generally renders the worker an easy prey to the tyranny of the masters and middle-men, only a step higher up the ladder than the worker, and held in the same relentless grip of forces – where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration.”

The 1909 Act was the first national minimum wage legislation in Britain.  Churchill’s Boards were superseded by Wages Councils established under the Wages Council Act 1945.  Legislation introduced by a Liberal Government, built upon by a Labour Government leading to, amongst other things, the Agricultural Wages Act 1948.  The Wages Councils consisted of representatives from both sides of industry, together with independent members. They had the power to set detailed minimum rates of pay, including shift premia, for different age groups and types of worker as well as complex holiday entitlements relating to length of service.

At their peak, in 1953, (under a Conservative Government headed by Winston Churchill) there were 66 Wages Councils, covering about 3.5 million workers.

In March 1985, the Conservative Government, as part of its policy of deregulating the labour market, published a Consultation Paper which proposed that the Wages Councils should either be abolished altogether or radically reformed. There was considerable opposition to outright abolition, from employers as well as employees, and the Government opted for radical reform.

The Wages Act 1986 preserved the 26 Councils (down from 27 in 1981) then in existence but prevented any new ones from being established. It removed young workers under the age of 21 from the scope of the Wages Councils altogether and ended the Councils’ power to set minimum holiday entitlements, separate pay rates for different occupations, and premium rates for unsocial hours or shift work. As a result, Wages Councils were only able to set a minimum hourly basic rate; a minimum overtime rate; the number of hours after which overtime must be paid; and a daily limit on the amount an employer could charge for any living accommodation he provided. Employers who failed to pay these rates were liable to a fine and for arrears of wages underpaid. The law was enforced by Wages Inspectors employed by the Department of Employment, but their numbers were cut during the 1980s and early 1990s and they adopted a policy of ensuring that minimum rates were paid by persuasion rather than coercion. Prosecution was rare, despite many instances of underpayment.

In December 1988, the Government once again issued a Consultation Paper which suggested that the Councils should be abolished. The response did not reveal enormous support for abolition even from employers’ organisations; and, in March 1990, Michael Howard, then Secretary of State for Employment, announced that he had decided not to proceed with abolition “for the present”.

It remained Conservative policy that Wages Councils should have “no permanent place in the labour market.”  Although the Conservative Manifesto for the 1992 Election did not mention abolition, the Trade Union Reform and Employment Rights Bill, published on 5 November 1992, contained legislation repealing the Wages Councils altogether. Section 35 of the Act, which abolished the Councils, came into effect on 30 August 1993.

The only remaining area in which a minimum wage was enshrined in law after 30 August 1993 was agriculture. The Agricultural Wages Board, as indicated above, was established under separate legislation, the Agricultural Wages Act 1948. The government had considered abolishing this too, but, in the face of opposition from both sides of the agricultural industry, it backed down.

William Waldegrave, Secretary of State for Agriculture, announcing this decision, said, “It is clear from the responses to consultation that there is wide acceptance, from both sides of the agricultural industry of the present arrangements. We do not therefore currently intend to change the existing statutory framework. However, since the Government believe that statutory wage fixing arrangements can introduce flexibilities which prevent rather than encourage job creation, we shall continue to keep the future existence of the AWB under close review.”

After the Wages Councils were abolished, there was growing evidence of jobs being offered below the old minimum rates and little evidence of increased employment in the deregulated industries. For example, a Low Pay Network study, “After the Safety Net”, analysed almost 6,000 jobs offered at Jobcentres in the catering, retailing, clothing manufacturing and hairdressing sectors in April and May 1994. Over a third of the jobs on offer paid less than the old Wages Council rate uprated by inflation. In retailing, the figure was over 50%. The network also found a net loss of 18,000 jobs recorded in the retail and catering sectors between September 1993 and March 1994, despite the removal of minimum wages.

See Research Note 92/75 on “Wages Councils”, Research Note 92/95 on the “Trade Union Reform and Employment Rights Bill 1992/3” and Research Paper 95/7 “A Minimum Wage”.

Between 1993 and the introduction of the NMW, only the AWB set pay rates for any group of workers in the UK work force.  The NMW when enacted covered many more workers than the Wages Councils, but did not replace the AWB which continued to set rates above those set by the NMW.

Of course, ukip, unlike all the other major political parties has yet to commit to increases in the National Minimum Wage and/or call for employers to pay the Living Wage.  In fact, ukip has yet to say whether or not it stands by its previous view that the NMW should be repealed.

ukip has said it will repeal the Agency Workers Directive (see Employment and Small Businesses) that, enacted in UK law as the Agency Workers Regulations 2010, seeks to level the playing field between temporary/agency workers and permanent employees.

I guess ukip thinks all the working people for whom they claim to speak, including agricultural workers, are in permanent employment?  In addition, on taking power, ukip would review all legislation and regulations from the EU and remove those which hamper British prosperity and competitiveness (see Protecting Jobs and Increasing Prosperity).

Given ukip’s commitment to repeal the Agency Workers Directive, is it not reasonable to assume that other employment legislation, including Health and Safety laws will be repealed so as not to hamper British prosperity and competitiveness?

Check out my next blog post to learn why I have made particular reference above to the Agricultural Wages Board!

PS Municipal regulation of wage levels began in some towns in 1524 and I do not think, were he alive today, that Churchill would be a member of ukip.

#WOW #ukip Supports #BenefitCap? Why? #GE2015 #ESA #WCA #JSA #PIP #DLA #IS #BedroomTax #ThanetSouth

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“UKIP supports a simplified, streamlined welfare system and a benefit cap.”

Welfare and Childcare

ukip says, “More detailed announcements will be made in the run up to the 2015 General Election.”

Will those detailed announcements clarify if these policy ideas are no longer under serious consideration?

“Roll the mass of existing benefits into simpler categories, while ensuring every UK citizen receives a simple, non-means tested ‘Basic Cash Benefit’ (BCB)

Roll key benefits – such as Jobseeker’s Allowance, Incapacity Benefit and Student Maintenance Grant – into a single, flat-rate BCB set at the same weekly rate as Jobseeker’s Allowance or Income Support.  For students, the BCB will be termed ‘Student Vouchers’ or ‘Training Vouchers’

Allow part-time and temporary workers to continue claiming BCB until their wages reach UKIP’s proposed £11,500 personal allowance so they can take jobs without being heavily penalised by the system

Merge Child Benefit, the Child Trust Fund, Child Tax Credits and the Education Maintenance Allowance into an enhanced Child Benefit, payable for each of the first three children in a family (as of October 2014 now only the first two children in a family)

Merge Early Years’ Funding, Sure Start, the childcare element of Working Tax Credit and the tax relief on Employer Nursery Vouchers into a flat-rate, non-means tested ‘Nursery Voucher’ to cover approximately half the cost of a full-time nursery place.”

From Welfare to Workfare
A Welfare Policy for an Independent Britain
A Policy Statement
January 2010

Up until now ukip has kept under tight wraps any suggestion that these policy ideas are, at least, not still under serious consideration.  A policy to oppose (not repeal) the Bedroom Tax and some vague assertions do not a comprehensive Social Security policy make.  In addition, the simplistic Income Tax cut for people on the National Minimum Wage (earning more than their current Income Tax Allowance), that ukip thinks will benefit all those in that position, is a clear sign that ukip has next to no understanding about how our tax and Social Security systems interact, often to the disadvantage of those in work on low incomes.  Often, people in work have to claim Social Security to even receive the same level of income as they would if they were not in work.

ukip’s enthusiasm for non means tested payments would mean more higher income taxpayers having a much bigger share of the Social Security budget than now and some of those on lower incomes receiving a great deal less than they currently do, both directly and indirectly.  Even David Cameron would be eligible to receive a BCB.

I take it no one in ukip has heard of ESA?  That its recipients are split into two groups and that, under these proposals, those entering the Support Group in the future would be receiving less money than those in the group now.  I am assuming that they would not apply their proposed changes retrospectively.

ukip needs to learn that a policy to oppose (not repeal) the Bedroom Tax will be perceived as no more than a cynical ploy to garner votes unless ukip comes up with more detailed Social Security policy than in is contained in its Doncaster statements.  In addition, am I right to think that this statement is a bit ambiguous:

“UKIP opposes the bedroom tax because it operates unfairly, penalising those who are unable to find alternative accommodation and taking insufficient account of the needs of families and the disabled.”

and that, if the tax were operated fairly (in ukip’s opinion) then ukip’s opposition to the tax would turn into support?

I mean why not just say ukip would repeal the Bedroom Tax (full stop)?

Oh (and before I forget) I hope ukip now understands the widespread opposition to Workfare, that 50% of people in receipt of Housing Benefit are in work, that most of the other claimants are pensioners and people on ESA and that the money for Council Tax Benefit is only ring-fenced for pensioners.

“Require those on benefits – starting with Housing and Council Tax Benefit recipients in private rented homes – to take part in council-run local community projects called ‘Workfare’ schemes. The schemes will be in addition to council jobs”

One might almost think that ukip’s Social Security ‘experts’ are not as expert as they think and have possibly never had recourse to claim Social Security.  If they want to design a new system to help people to move from Social Security into paid work, may I suggest they Google Benefit Trap?  It is obvious they and their supporters have not heard of the trap, given their touching faith in the idea that cutting the Income Tax paid by those on the National Minimum Wage will make all of those currently paying Income Tax no worse off than they are now, if not better.

I have news for ukip, not even Iain Duncan Smith would touch your Social Security ideas with a barge pole and that really is saying something!

#ukip, @MarkReckless, #NigelFarage, #NMW & Tax ‘Cuts’ #RochesterandStrood #RochesterStrood

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Nigel Farage recently announced that he would take all those on the National Minimum Wage out of Income Tax. On the surface that sounds like a bold move. On the surface.

From 1st October this year, the hourly rate for someone on the NMW will be £6.50 per hour.  If that someone works 40 hours per week, 52 weeks of the year then that works out at £13,520 per year.  Their personal tax allowance will be £10,000 so they only pay Income Tax at 20% on £3,520.  The amount paid works out at £704 or £13.54 per week.  Certainly not to be sniffed at, but hardly the largesse that one might first think.

However, Value Added Tax is levied at 20% and, if those benefiting from Farage’s tax cut spend all or most of that £13.54 per week then they are receiving with one hand and paying most, if not all back to the Treasury with the other.  VAT, being a regressive tax, bears down most on those with the lowest incomes, because, more likely than not, they will spend every extra pound that they receive, unlike those higher up the income scale.

It would also seem that some ukippers (on Twitter at least) think that VAT is levied purely to pay our annual EU subscription and so it too may be scrapped.  True, it is a requirement of membership, but the money raised by it in the United Kingdom is well in excess of that needed to pay our sub.  As a consequence, we will not be scrapping VAT any time soon, if ever, given Farage’s proposed (costed?) spending plans to date. Moreover, Farage recognises that we get £7 back from every £10 we pay into the EU and plans to continue (at the moment) with maintaining that 70% of EU spend, but not via Brussels.

The hourly rate for the NMW that I have quoted above is for those aged 21 and over.  The rate for those aged between 18 and 20, inclusive, is £5.13 per hour or £10,670.40 per year.  The amount of Income Tax paid being is £134.08.  If Farage makes good on his promise the cut amounts to a pay increase of £2.58 per week for 18 to 20 year olds.

The NMW hourly rate for those aged under 18 is £3.79 (or £7,883.20 per year) and for apprentices is £2.73 per hour (or £5,678.40 per year).  Neither group would, of course, benefit from Farage’s tax change.  The rate for apprentices is for those aged 16 to 18 and those aged 19 or over who are in their first year of their apprenticeship.  All other apprentices are entitled to the National Minimum Wage for their age.

I am not holding my breath as to whether Farage would raise the NMW for those not benefiting from his taking those on the hourly higher rates out of the range of Income Tax.  Elsewhere in the ukip forest, influential members of ukip want to see the NMW scrapped.  One assumes this is not so employers may pay more per hour.  There are some benighted individuals who think the NMW keeps wages low.  Perhaps it does, but do they seriously want to go back to the days before its introduction?

Also, you will have noticed that if you work 29 and a half hours per week, at £6.50 per hour for 52 weeks, then you already pay no Income Tax and, if you work 37 and a half hours per week, at £5.13 per hour for 52 weeks, then you too already pay no Income Tax. Who is more likely than not to work less than 40 hours per week for 52 weeks per year? Women, often in part time jobs; Black and Ethnic Minorities; People With Disabilities; anyone in part time work; people with casual contracts and those on zero hours contracts. Oh, and those white working class (left behind) males flocking to ukip to be shorn like sheep whose fleeces are more than ready for the clippers.

It has been estimated that taking all those out of the NMW out of tax will cost £13 billion per year.  We have no idea where that money will come from, although as mentioned above, it may well be partly, if not almost completely recouped through VAT. And I have not added in the revenue accruing from purchases on which other imposts are levied, for example alcohol and tobacco.

Look at in another way, though.  Farage would lose £13 billion of tax revenue per year were his proposal implemented and yet the resulting benefits per person on NMW would be modest, to say the least.  There are, therefore, a lot of low paid people in the United Kingdom.  If Farage really wanted to make a real difference to their lives, he would be lecturing his mates in the City, ukip’s big business backers and its members who are business people, like many of its MEPs, on the need for business to raise the pay of their workers.  Instead, he is once more revealed as all style and no substance.

May be not, though. Join up the dots.  You have taken everyone on the NMW out of paying Income Tax so why do you need the NMW and big government?  You may scrap the NMW and promise to increase the 20% starting rate and the 40% starting rate every year by the Cost Price Index.  I assume you will not wish to be overly generous by increasing it by the Retail Price Index?

We now have a policy that will be music to the ears of libertarians, like Douglas Carswell; business people with no sense of corporate social responsibility and the Hard Right of the Tory Party.  Without the NMW there will be nothing to stop paying new recruits less than now as well as freezing pay for current staff and possibly even reducing it.  And, increasing the 20% and 40% starting rates benefits those paying Income Tax at the highest rate the most.  And there you were thinking a tax cut for the low paid was born out of pure altruism.  Think again?

ukip, the party of the left behind? ukip, the party of the low paid working man (and sometimes working woman)? ukip, the party that cares for the plight of the young?

No! Not when Farage wants to cut the top rate of tax from 45% to 40%.

Now you know who will benefit from Farage’s tax cuts.  People nothing like you, me and most of the electorate. Certainly not those whose pay is currently guaranteed by the NMW.

Need 100,000 #WOW Signatures To Make #IDS, #McVey & #DWP #DWProud!

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What are e-petitions?

e-petitions are an easy, personal way for you to influence government and Parliament in the UK.  You can create an e-petition about anything that the government is responsible for and if it gets at least 100,000 signatures, it will be considered for debate in the House of Commons.  You can find more information about how the House of Commons deals with e-petitions on the Backbench Business Committee website:

1. PIP should be scrapped.  Petition No 61694.  Ends 3/3/15

2. ATOS appeal upheld not go again. Petition No. 59544 191 signatures Ends 22/1/15

3. ATOS & Tribunal Service money to GPs.  Petition No 60046.  Ends 5/2/15

4. DWP show common sense over terminal/degenerate illness.  Petition No 61319.  Ends 24/2/15

5. Disabled people UK Welfare reforms suspended. Petition No 66608.  Ends 20/6/15

6. Make WCA Realistic.  Petition No 66404.  Ends 16/6/15

7. Abolish mandatory reconsideration.  Petition No 57915.  Ends 5/12/14

8. Stop Ian Duncan Smith Rolling out Prepaid Benefit Cards.  Petition No 70218.  Ends 30/3/15

9. Stop charge for Appeals.  Petition No 61504. Signatures 26. Ends 27/2/15

10. Abolish Universal Credit. Petition No 58428. Ends 30/12/14

11. Stop discrimination transfer DLA/PIP.  Petition No 66447.  Ends 16/12/14

12. End JSA Sanctions.  Petition No 57087.  Ends 14/11/14

13. ATOS WCA Abolish.  Petition No 55159.  Ends 23/9/14

14. GP power to veto WCA decision.  Petition No 64071.  Ends 22/4/15

15. Stop abolition assessment rate.  Petition No. 58266.  Ends 13/12/14

16. Benefit sanctions inquiry.  Petition No. 58217.  Ends 13/12/14

17. “Lies, Damn Lies, IDS and The DWP; STOP Spinning Statistics” #ImpeachDWP #NOWPetition