Fightback RL Newsletter | May 2012

We reproduce the latest newsletter by Richard Lynch below

We’re being taken for fools!

Working people are paying a high price – in lost jobs, collapsing living standards and cutbacks in services and benefits – for the coalition’s austerity programme, which is now entering its third year. That programme is costing us a massive £113 billion in spending cuts and tax rises, but we are told that there is no alternative to it if government debt is to be brought down. We are also told that “there is no money left” and that everybody must make sacrifices for the common good. But why does this not apply to Britain’s super rich, whose wealth is growing as if there had never been a recession and for whom taxes are being cut?

The fact is that Britain is still one of the richest countries in the world (8th richest by some recent estimates) and has no shortage of money. But that money is concentrated in the hands of a small number of very rich individuals, including in the current coalition cabinet where there are 18 millionaires amongst its 29 members, and where their combined wealth is nearly £70 million (according to the consultancy Wealth-X). Amongst the wealthiest are Philip Hammond (£8.2 million), William Hague (£4.8 million), Jeremy Hunt (£4.8 million), George Osborne (£4.5 million) and David Cameron (£3.8 million), although Cameron and his wife apparently stand to inherit a further £25 million in future years. And these are the people who are telling us to tighten our belts in the national interest!

The wealth of the 29 cabinet members equates to what 2,900 workers on the average wage could expect to be paid in a year, but they are not in the same league as the bosses of Britain’s FTSE 100 companies. According to the most recent Directors’ Pay Report from Income Data Services, the average earnings for directors in these companies increased by 49% to £2.7 million in the 2010/11 financial year, while the average earnings of chief executives increased by 43.5% to £3.8 million. Another report, by the High Pay Commission, put average chief executive earnings at £4.9 million and a recent Manifest/MM&K report put the average at £3.8 million.

Even in the past month or so, several chief executives have shown that they are now doing even better than this. For example, Ian Livingstone of BT has been reported as receiving a package of £7.7 million in the past year and Peter Voser of Shell apparently received £10 million. Sir Martin Sorrell of advertising group WPP is reported to be getting a 60% increase to £12.9 million, and this could go up to £29 million if a five year share incentive plan is agreed. Nick Robinson of the on-line fashion house Asos was apparently given a £25 million share payout. And Mick Davis of mining group Xstrata is apparently in line for a £50 million package, provided he agrees to remain with the company for the next three years.

But even these high earners seem somewhat second rate when you look at the wealth of Britain’s 1,000 richest individuals, as detailed in the Sunday Times Rich List. Despite making up a mere 0.003% of the adult population, the combined wealth of this group increased by 4.7% from £395.5 million to £414 million in the past year – the highest figure ever recorded.

The combined wealth of the richest 100 in this group amounted to £231 billion and the combined wealth of the 77 who are billionaires amounted to £201 billion. Even the top 10, headed by steel magnate Lakshi Mittal with £12.7 billion, had wealth totalling £85 billion.

It is hard to understand the enormity of these figures but the following comparisons with the earnings of workers on the national average wage may help:

The wealth of the 10 richest equals the average annual earnings of 3.5 million workers.

The wealth of the 77 billionaires equals the earnings of 8.4 million workers.

The wealth of the richest 100 equals the earnings of 9.5 million workers, and

The wealth of the whole 1,000 equals the annual earnings of 17 million workers, or of almost 60% of the working population in the UK.

And if that doesn’t bring it home to you, look at their wealth in comparison with what the UK produces each year and with what the government spends on defence, education, transport, health, public order and safety, housing and environment, industry, agriculture, employment, training, debt interest, personal social services and social protection etc:

The wealth of the 1,000 equates to around one third of UK Gross Domestic Product (the total value of all goods and services produced during a year), according to Michael Meacher MP. Meacher also points out that the £155 billion by which the wealth of the 1,000 has grown in the past three years would pay off the government’s total deficit and leave £30 billion to spare.

It is 60% of the £683 billion total annual expenditure of the state every year.

It is double the £207 billion spent on social protection (state benefits, state pensions, tax credits etc).

It is three times the £130 billion spent on the NHS and four and a half times the £91 billion spent on education.

Yet despite all of this, the burden of paying for the first recession, the second recession and the government deficit is falling overwhelmingly on those of us who did nothing to cause the crisis and who can least afford it. But while we are paying more in taxes than ever before, the 50% tax rate for those earning over £150,000 a year is being cut to 45% and Corporation Tax has been cut from 26% to 24% and is due to be cut to 22% in 2014. And this is just continuing the trend of the past 30 years, during which time the gap between rich and poor has grown more quickly than in any other advanced economy (according to the OECD).

We’re being taken for fools and it’s time we did something about it!

 

What Beecroft wants to do to your rights at work

Adrian Beecroft is a venture capitalist, Wonga investor and Tory donor who doesn’t like workers having too many rights and whose coalition-commissioned report on ‘simplifying’ employment legislation was finally published a few weeks ago. That report has aroused a huge amount of controversy and has been criticised by unions, employment lawyers and even some employer organisations and coalition ministers.

And small wonder when you realise that Beecroft wants to:

Abolish all legislation on unfair dismissal, except in cases of discrimination, or allow employers to dismiss anybody without giving a reason and without the employee being able to take them to tribunal, provided they make an enhanced leaving payment.

Reduce the scope of TUPE so that fewer transferring workers are covered and allow terms and conditions of transferred workers who are covered to be harmonised with those of their new employer after one year.

Cut the consultation period for redundancies from 90 days to 30 days in cases where over 100 people are being axed and cut the period further, to as little as five days, when a company is insolvent.

Get rid of the third-party harassment provisions from the Equality Act, so that action can’t be taken against employers who do nothing about customers or suppliers who harass staff. According to Beecroft, the idea that employers can control the actions of third parties in such situations is “naïve in the extreme”. In addition, he believes that the legislation “creates a temptation for employees to conspire with customers to create a harassment situation which might result in substantial financial compensation from their employer”

Exempt small businesses from the obligation to offer pensions to employees under the forthcoming auto-enrolment process, and

Abolish the Agency Workers Regulations.

Some of Beecroft’s proposals have no chance of becoming law (the last two have already been ruled out by the coalition) but others are under active consideration and could be enacted. This would turn the clock back on employment rights at a time when, amongst the world’s 36 most prosperous countries, only workers in the US have fewer employment rights than British workers (according to the Organisation for Economic Co-operation and Development).

 

For example, the coalition is consulting on ‘compensated no-fault dismissals’ (the first proposal above) for the three million people in companies with fewer than 10 employees, even though there is little call from business for such legislation and it will do nothing to increase employment or encourage economic growth. They are also consulting on changing the TUPE rules although, again, there is little call for this. And they seem to be leaning towards reducing redundancy consultation periods and abolishing workers’ rights on third-party harassment. Yet, as the economist David Blanchflower said, there is “absolutely no evidence that sacking people will boost the economy” and, in fact, a more frightened and insecure workforce will result in lower productivity and consumer confidence, making it more difficult for Britain to pull out of recession.

The TUC has launched a campaign against the coalition’s attacks on workers’ rights, under the heading Employee Rights Stop Employment Wrongs. Further details on it are available from www.stopemploymentwrongs.org. It deserves support!

 

Unemployment down due to a surge in part-time work

There was good news in the latest Labour Market Statistics, with the number of people in employment up and the number of unemployed down. But these welcome developments were driven entirely by an increase in part-time employment and the jobs market remains in a precarious state. The numbers out of work also remain higher than they were at the worst point of the 2008/9 recession. The latest figures, which mainly cover the three months to end March 2012, show the following:

The number of people in employment increased by 105,000 over the quarter to reach 29.23 million, giving an employment rate amongst 16-64 year olds of 70.5%. However this increase was totally due to a rise of 118,000 in the number of part-time workers, of whom there are now 7.99 million (the highest figure since comparable records began in 1992).

The number of people working part-time because they could not find a full-time job increased by 73,000 to 1.42 million (the highest figure since 1992). At the same time, the number of people on temporary contracts who want permanent positions increased by 14,000 to 616,000. This brings the total number of underemployed people to more than two million. In addition to this, the number of 16-64 year olds classed as economically inactive, but not included in the unemployment figures, is now 9.25 million.

Unemployment fell by 45,000 over the quarter to reach 2.63 million, or 8.2% of the economically active population. Youth unemployment fell by 17,000 to 1.02 million, giving a youth unemployment rate of 21.9%. However, the number of people unemployed for over a year increased by 27,000 to reach 887,000 (a 16 year high) and the number out of work for over two years increased by 5,000 to reach 428,000. This means that 33.8% of all those out of work are now long-term unemployed.

The number of people unemployed and claiming Jobseeker’s Allowance fell by 1.59 million, giving a claimant count of 4.9%, but this is still 106,000 higher than a year ago.

The number of job vacancies fell by 7,000 to 457,000, which means an average of 5.7 unemployed people are chasing every job vacancy.

The Chartered Institute of Personnel and Development described these latest statistics as ‘odd’ and said that the fall in unemployment could be explained by a surge in part-time odd jobbing. But, it added, ‘the underlying employment situation is worse than at any point in at least the past two decades’.

 

Welcome fall in inflation

There has been a welcome fall in the rate of inflation, with the most recent figures showing the two main indices rising at their lowest rate since December 2009. However, inflation remains high by international standards and prices are still rising faster than pay. The figures for the year to end April 2012 (with end March figures in brackets) are as follows:

Retail Prices Index (RPI) – 3.5% (3.6%)

RPI excluding mortgage interest (RPIX) – 3.5% (3.7%)

Consumer Prices Index (CPI) – 3.0% (3.5%)

The main reason for the significant fall in the CPI was that transport prices rose by less this year than last year, with air transport prices going up by 7.4% compared to 29% last year and sea transport prices going up by 4.2% compared to 22.3% last year. This was mainly due to the timing of Easter, which was earlier this year than last and meant that the high Easter prices of profiteering transport firms had fallen compared to last April, when they were still sky high. According to the Office for National Statistics, this factor alone reduced April’s CPI figure by 0.27%. Prices of alcoholic beverages and tobacco, and of clothing and footwear, also rose by less than last year (partly due to discounting on hard pressed high streets).

The RPI’s lesser fall was partly due to different methodology in collecting transport price figures but also because fuel and light prices increased by 10.6% (15.7% for gas and 8.1% for electricity) and clothing and footwear by 8.7%.

The fall in the CPI was welcomed by the coalition and by most others, but they are now considering ways of changing the price collection methodology to drive down figures even further.

The Consumer Prices Advisory Committee, which includes Treasury and Bank of England representatives, is looking at changing the RPI price collection formulae with a view to bringing the figures closer to those in the lower CPI. It is reported that this could bring down the current RPI figures by as much as 1% but it would have a big impact on RPI-linked pensions and gilts. It is also understood that homeowners’ housing costs are to be introduced into the CPI next year, in a move which the FT predicts will reduce the CPI figure further.

As regards international comparisons, our CPI rate of 3% is now only 9th highest in the EU, but is still above rates in Spain (2%), Germany (2.2%), France (2.4%), the Euro area (2.6%) and the EU as a whole (2.7%). It is also higher than the rate in Switzerland (-1.1%), Japan (0.4%) and the US (2.3%). However it is lower than in China (3.4%) and Italy (3.7%).

 

No ‘Arab Spring’ on pay

April has more pay settlements than any other month but, despite some good increases this year, the month did not see the breakthrough on pay that many of us had hoped. As a result, pay increases are still lagging behind inflation and most working people are facing another year of falling living standards.

The latest median pay settlement figures from the pay research organisations are for the three months to end April 2012 and these (together with figures to end March) are as follows:

Income Data Services (IDS) – 2.8% (3.0%)

Labour Research Department (LRD) – 3.0% (3.0%)

XpertHR (formerly IRS) – 2.0% (2.6%)

IDS said that the fall in settlement figures for the whole economy was due to another round of pay freezes in the public sector. This has increased the proportion of freezes across the economy to 20% from 8% in the previous month. Some of these freezes continue to be in the private sector but two thirds are in the public and voluntary sectors. IDS also said that the proportion of awards which were at or above 4% in April fell to 12% of deals, from 20% in the previous analysis.

LRD’s 3% figure was the same as for each of the three month periods since the start of the year and a major contributory factor to it was the number of long-term, inflation-linked deals in the private sector. These have proven a winner for workers because they are overwhelmingly linked to the RPI rate of inflation, rather than to the lower CPI rate.

XpertHR figures tend to be lower than figures from other organisations and this month’s are particularly low due to being dragged down by the low awards and freezes in the public sector. Nonetheless, they say that 3% was their most common settlement figure with 28% of employers awarding it to their workers.

Figures from the Office for National Statistics, which show figures for the last three months reported on, compared to figures for the previous year, were more disappointing. Their latest report shows the following for the three months to end March 2012 (with end February figures in brackets):

Average total pay (including bonuses) – 0.6% (1.1%)

Average regular pay (excluding bonuses) – 1.6% (1.6%)

According to ONS, average total pay is now £464 a week and average regular pay is £441 a week. According to LRD, average full-time pay is now £608 a week.

Depending on whichever of the above figures you choose, pay settlements are now trailing RPI inflation (currently 3.5%) by anything from 0.5% to 2.9%. However, finance directors in Britain’s top 100 companies have no such problems. According to IDS, they received a 9.5% increase in pay and bonuses last year and now earn an average of £1.6 million a year each.

 

Employment rights’ roundup

Losing holidays because sickness prevented you taking them during the holiday year is an unfair management practice which is being rapidly brought to an end. Several European and UK court cases have already ruled against it and the government is now considering a change in the law to allow such holidays to be taken in the next holiday year. However a European Court of Justice case (KHS AG v Schulte) has ruled that a 15 month ‘carry over’ period is lawful and it seems likely that the government may have to re-think its 12 month proposal. Any worker who is being denied such ‘carry over’ rights because sickness prevented them taking holidays, should challenge their employer and should stand a good chance of winning. Remember, however, that the law on this issue only applies to statutory holiday entitlement (20 days a year, or 28 days if bank holidays are not given separately).

Working night shifts regularly has long been viewed as being potentially damaging to health but there is now growing evidence that there may be a link between it and greater incidence of breast cancer. This possibility was raised five years ago by the International Agency for Research on Cancer, which found that long-term night work can disrupt melatonin production and disregulate genes involved in tumour development, leading to a higher risk of breast cancer than amongst women who do not work nights. Now, the Danish Cancer Society has published research which found that women who had worked nights at least three times a week for at least six years were twice as likely to have the disease as those who had not. The Health & Safety Executive has now commissioned the Oxford University cancer epidemiology unit to conduct further research on this issue. However, this is unlikely to be completed before the end of 2015.

More than half of employers are planning to allow greater flexibility for their staff during the Olympics, according to a survey from the Chartered Institute of Personnel and Development. Almost a third will allow staff to work more flexibly or to work from home. An equal number will allow events to be viewed on TV at work and a further 11% will allow on-line viewing on work computers. However the Olympics will also place extra demands on workers in some sectors, like public transport, and some 35% of public sector employers are restricting leave during the games.

Poor mental health, which includes stress, anxiety and depression, affects one in four of us at some time during our working lives and is estimated to cost industry £30 billion a year through absence, lost production and recruitment. Yet mental health is difficult to talk about and few employers have strategies for dealing with it and for helping sufferers. ACAS has now produced a new advisory booklet, Promoting positive mental health at work, which union reps, members and sufferers are urged to look up. It can be downloaded from the ACAS website on www.acas.org.uk/index.aspx?articleid=1900.

 

What has equality got to do with health and safety?

A new guide from Labour Research Department, Safety, Health and Equality at Work, makes a very simple but important point: There have been huge changes in the labour market since health and safety regulations were introduced in 1978, with a decline in manufacturing, an increase in service industries and big increases in the numbers of female and ethnic minority workers.

In the light of that, we need to make sure that the health, safety and welfare of everybody in our diverse workforce are being looked after.

This means paying proper attention to issues which affect women more than men, for example stress, upper limb disorders, health and safety during pregnancy and safe travel to and from work. It means paying attention to issues which have a disproportionate effect on black and ethnic minority workers such as bullying, blood disorders which affect certain groups more than others and unsafe working conditions for migrant workers. It means paying attention to the needs of disabled workers, for example to ensuring that risk assessments are disability-proof and that workplace access, layout and emergency procedures take their needs into account. And it means taking into account the needs of young workers, a disproportionate number of whom are injured and killed at work every year, and of LGBT workers who are bullied more than most.

This is not really a revolutionary idea for union reps, safety reps and others because it just says we should be doing our job properly, particularly at a time when the coalition government is doing its best to destroy health and safety protections at work. But the guide, which costs £7.30 from LRD, 78 Blackfriars Road, London SE1 8HF (020 7928 3649 or www.lrd.org.uk), provides a good checklist of the kind of things we should be looking out for and a reminder that we should be recruiting reps and safety reps from all sections of our diverse workforce.

Richard Lynch

9 June 2012

 

FBRL No 33 20120609

We’re being taken for fools!

Working people are paying a high price – in lost jobs, collapsing living standards and cutbacks in services and benefits – for the coalition’s austerity programme, which is now entering its third year. That programme is costing us a massive £113 billion in spending cuts and tax rises, but we are told that there is no alternative to it if government debt is to be brought down. We are also told that “there is no money left” and that everybody must make sacrifices for the common good. But why does this not apply to Britain’s super rich, whose wealth is growing as if there had never been a recession and for whom taxes are being cut?

The fact is that Britain is still one of the richest countries in the world (8^th richest by some recent estimates) and has no shortage of money. But that money is concentrated in the hands of a small number of very rich individuals, including in the current coalition cabinet where there are 18 millionaires amongst its 29 members, and where their combined wealth is nearly £70 million (according to the consultancy Wealth-X). Amongst the wealthiest are Philip Hammond (£8.2 million), William Hague (£4.8 million), Jeremy Hunt (£4.8 million), George Osborne (£4.5 million) and David Cameron (£3.8 million), although Cameron and his wife apparently stand to inherit a further £25 million in future years. And these are the people who are telling us to tighten our belts in the national interest!

The wealth of the 29 cabinet members equates to what 2,900 workers on the average wage could expect to be paid in a year, but they are not in the same league as the bosses of Britain’s FTSE 100 companies. According to the most recent Directors’ Pay Report from Income Data Services, the average earnings for directors in these companies increased by 49% to £2.7 million in the 2010/11 financial year, while the average earnings of chief executives increased by 43.5% to £3.8 million. Another report, by the High Pay Commission, put average chief executive earnings at £4.9 million and a recent Manifest/MM&K report put the average at £3.8 million.

Even in the past month or so, several chief executives have shown that they are now doing even better than this. For example, Ian Livingstone of BT has been reported as receiving a package of £7.7 million in the past year and Peter Voser of Shell apparently received £10 million. Sir Martin Sorrell of advertising group WPP is reported to be getting a 60% increase to £12.9 million, and this could go up to £29 million if a five year share incentive plan is agreed. Nick Robinson of the on-line fashion house Asos was apparently given a £25 million share payout. And Mick Davis of mining group Xstrata is apparently in line for a £50 million package, provided he agrees to remain with the company for the next three years.

But even these high earners seem somewhat second rate when you look at the wealth of Britain’s 1,000 richest individuals, as detailed in the Sunday Times Rich List. Despite making up a mere 0.003% of the adult population, the combined wealth of this group increased by 4.7% from £395.5 million to £414 million in the past year – the highest figure ever recorded.

– 2 –

The combined wealth of the richest 100 in this group amounted to £231 billion and the combined wealth of the 77 who are billionaires amounted to £201 billion. Even the top 10, headed by steel magnate Lakshi Mittal with £12.7 billion, had wealth totalling £85 billion.

It is hard to understand the enormity of these figures but the following comparisons with the earnings of workers on the national average wage may help:

• The wealth of the 10 richest equals the average annual earnings of 3.5 million workers.

• The wealth of the 77 billionaires equals the earnings of 8.4 million workers.

• The wealth of the richest 100 equals the earnings of 9.5 million workers, and

• The wealth of the whole 1,000 equals the annual earnings of 17 million workers, or of almost 60% of the working population in the UK.

And if that doesn’t bring it home to you, look at their wealth in comparison with what the UK produces each year and with what the government spends on defence, education, transport, health, public order and safety, housing and environment, industry, agriculture, employment, training, debt interest, personal social services and social protection etc:

• The wealth of the 1,000 equates to around one third of UK Gross Domestic Product (the total value of all goods and services produced during a year), according to Michael Meacher MP. Meacher also points out that the £155 billion by which the wealth of the 1,000 has grown in the past three years would pay off the government’s total deficit and leave £30 billion to spare.

• It is 60% of the £683 billion total annual expenditure of the state every year.

• It is double the £207 billion spent on social protection (state benefits, state pensions, tax credits etc).

• It is three times the £130 billion spent on the NHS and four and a half times the £91 billion spent on education.

Yet despite all of this, the burden of paying for the first recession, the second recession and the government deficit is falling overwhelmingly on those of us who did nothing to cause the crisis and who can least afford it. But while we are paying more in taxes than ever before, the 50% tax rate for those earning over £150,000 a year is being cut to 45% and Corporation Tax has been cut from 26% to 24% and is due to be cut to 22% in 2014. And this is just continuing the trend of the past 30 years, during which time the gap between rich and poor has grown more quickly than in any other advanced economy (according to the OECD).

We’re being taken for fools and it’s time we did something about it!

What Beecroft wants to do to your rights at work

Adrian Beecroft is a venture capitalist, Wonga investor and Tory donor who doesn’t like workers having too many rights and whose coalition-commissioned report on ‘simplifying’ employment legislation was finally published a few weeks ago. That report has aroused a huge amount of controversy and has been criticised by unions, employment lawyers and even some employer organisations and coalition ministers.

And small wonder when you realise that Beecroft wants to:

• Abolish all legislation on unfair dismissal, except in cases of discrimination, or allow employers to dismiss anybody without giving a reason and without the employee being able to take them to tribunal, provided they make an enhanced leaving payment.

– 3 –

• Reduce the scope of TUPE so that fewer transferring workers are covered and allow terms and conditions of transferred workers who are covered to be harmonised with those of their new employer after one year.

• Cut the consultation period for redundancies from 90 days to 30 days in cases where over 100 people are being axed and cut the period further, to as little as five days, when a company is insolvent.

• Get rid of the third-party harassment provisions from the Equality Act, so that action can’t be taken against employers who do nothing about customers or suppliers who harass staff. According to Beecroft, the idea that employers can control the actions of third parties in such situations is “naïve in the extreme”. In addition, he believes that the legislation “creates a temptation for employees to conspire with customers to create a harassment situation which might result in substantial financial compensation from their employer”

• Exempt small businesses from the obligation to offer pensions to employees under the forthcoming auto-enrolment process, and

• Abolish the Agency Workers Regulations.

Some of Beecroft’s proposals have no chance of becoming law (the last two have already been ruled out by the coalition) but others are under active consideration and could be enacted. This would turn the clock back on employment rights at a time when, amongst the world’s 36 most prosperous countries, only workers in the US have fewer employment rights than British workers (according to the Organisation for Economic Co-operation and Development).

For example, the coalition is consulting on ‘compensated no-fault dismissals’ (the first proposal above) for the three million people in companies with fewer than 10 employees, even though there is little call from business for such legislation and it will do nothing to increase employment or encourage economic growth. They are also consulting on changing the TUPE rules although, again, there is little call for this. And they seem to be leaning towards reducing redundancy consultation periods and abolishing workers’ rights on third-party harassment. Yet, as the economist David Blanchflower said, there is “absolutely no evidence that sacking people will boost the economy” and, in fact, a more frightened and insecure workforce will result in lower productivity and consumer confidence, making it more difficult for Britain to pull out of recession.

The TUC has launched a campaign against the coalition’s attacks on workers’ rights, under the heading Employee Rights Stop Employment Wrongs. Further details on it are available from www.stopemploymentwrongs.org. It deserves support!

Unemployment down due to a surge in part-time work

There was good news in the latest Labour Market Statistics, with the number of people in employment up and the number of unemployed down. But these welcome developments were driven entirely by an increase in part-time employment and the jobs market remains in a precarious state. The numbers out of work also remain higher than they were at the worst point of the 2008/9 recession. The latest figures, which mainly cover the three months to end March 2012, show the following:

The number of people in employment increased by 105,000 over the quarter to reach 29.23 million, giving an employment rate amongst 16-64 year olds of 70.5%. However this increase was totally due to a rise of 118,000 in the number of part-time workers, of whom there are now 7.99 million (the highest figure since comparable records began in 1992).

– 4 –

The number of people working part-time because they could not find a full-time job increased by 73,000 to 1.42 million (the highest figure since 1992). At the same time, the number of people on temporary contracts who want permanent positions increased by 14,000 to 616,000. This brings the total number of underemployed people to more than two million. In addition to this, the number of 16-64 year olds classed as economically inactive, but not included in the unemployment figures, is now 9.25 million.

Unemployment fell by 45,000 over the quarter to reach 2.63 million, or 8.2% of the economically active population. Youth unemployment fell by 17,000 to 1.02 million, giving a youth unemployment rate of 21.9%. However, the number of people unemployed for over a year increased by 27,000 to reach 887,000 (a 16 year high) and the number out of work for over two years increased by 5,000 to reach 428,000. This means that 33.8% of all those out of work are now long-term unemployed.

The number of people unemployed and claiming Jobseeker’s Allowance fell by 1.59 million, giving a claimant count of 4.9%, but this is still 106,000 higher than a year ago.

The number of job vacancies fell by 7,000 to 457,000, which means an average of 5.7 unemployed people are chasing every job vacancy.

The Chartered Institute of Personnel and Development described these latest statistics as ‘odd’ and said that the fall in unemployment could be explained by a surge in part-time odd jobbing. But, it added, ‘the underlying employment situation is worse than at any point in at least the past two decades’.

Welcome fall in inflation

There has been a welcome fall in the rate of inflation, with the most recent figures showing the two main indices rising at their lowest rate since December 2009. However, inflation remains high by international standards and prices are still rising faster than pay. The figures for the year to end April 2012 (with end March figures in brackets) are as follows:

Retail Prices Index (RPI) – 3.5% (3.6%)

RPI excluding mortgage interest (RPIX) – 3.5% (3.7%)

Consumer Prices Index (CPI) – 3.0% (3.5%)

The main reason for the significant fall in the CPI was that transport prices rose by less this year than last year, with air transport prices going up by 7.4% compared to 29% last year and sea transport prices going up by 4.2% compared to 22.3% last year. This was mainly due to the timing of Easter, which was earlier this year than last and meant that the high Easter prices of profiteering transport firms had fallen compared to last April, when they were still sky high. According to the Office for National Statistics, this factor alone reduced April’s CPI figure by 0.27%. Prices of alcoholic beverages and tobacco, and of clothing and footwear, also rose by less than last year (partly due to discounting on hard pressed high streets).

The RPI’s lesser fall was partly due to different methodology in collecting transport price figures but also because fuel and light prices increased by 10.6% (15.7% for gas and 8.1% for electricity) and clothing and footwear by 8.7%.

The fall in the CPI was welcomed by the coalition and by most others, but they are now considering ways of changing the price collection methodology to drive down figures even further.

– 5 –

The Consumer Prices Advisory Committee, which includes Treasury and Bank of England representatives, is looking at changing the RPI price collection formulae with a view to bringing the figures closer to those in the lower CPI. It is reported that this could bring down the current RPI figures by as much as 1% but it would have a big impact on RPI-linked pensions and gilts. It is also understood that homeowners’ housing costs are to be introduced into the CPI next year, in a move which the FT predicts will reduce the CPI figure further.

As regards international comparisons, our CPI rate of 3% is now only 9th highest in the EU, but is still above rates in Spain (2%), Germany (2.2%), France (2.4%), the Euro area (2.6%) and the EU as a whole (2.7%). It is also higher than the rate in Switzerland (-1.1%), Japan (0.4%) and the US (2.3%). However it is lower than in China (3.4%) and Italy (3.7%).

No ‘Arab Spring’ on pay

April has more pay settlements than any other month but, despite some good increases this year, the month did not see the breakthrough on pay that many of us had hoped. As a result, pay increases are still lagging behind inflation and most working people are facing another year of falling living standards.

The latest median pay settlement figures from the pay research organisations are for the three months to end April 2012 and these (together with figures to end March) are as follows:

Income Data Services (IDS) – 2.8% (3.0%)

Labour Research Department (LRD) – 3.0% (3.0%)

XpertHR (formerly IRS) – 2.0% (2.6%)

IDS said that the fall in settlement figures for the whole economy was due to another round of pay freezes in the public sector. This has increased the proportion of freezes across the economy to 20% from 8% in the previous month. Some of these freezes continue to be in the private sector but two thirds are in the public and voluntary sectors. IDS also said that the proportion of awards which were at or above 4% in April fell to 12% of deals, from 20% in the previous analysis.

LRD’s 3% figure was the same as for each of the three month periods since the start of the year and a major contributory factor to it was the number of long-term, inflation-linked deals in the private sector. These have proven a winner for workers because they are overwhelmingly linked to the RPI rate of inflation, rather than to the lower CPI rate.

XpertHR figures tend to be lower than figures from other organisations and this month’s are particularly low due to being dragged down by the low awards and freezes in the public sector. Nonetheless, they say that 3% was their most common settlement figure with 28% of employers awarding it to their workers.

Figures from the Office for National Statistics, which show figures for the last three months reported on, compared to figures for the previous year, were more disappointing. Their latest report shows the following for the three months to end March 2012 (with end February figures in brackets):

Average total pay (including bonuses) – 0.6% (1.1%)

Average regular pay (excluding bonuses) – 1.6% (1.6%)

According to ONS, average total pay is now £464 a week and average regular pay is £441 a week. According to LRD, average full-time pay is now £608 a week.

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Depending on whichever of the above figures you choose, pay settlements are now trailing RPI inflation (currently 3.5%) by anything from 0.5% to 2.9%. However, finance directors in Britain’s top 100 companies have no such problems. According to IDS, they received a 9.5% increase in pay and bonuses last year and now earn an average of £1.6 million a year each.

Employment rights’ roundup

Losing holidays because sickness prevented you taking them during the holiday year is an unfair management practice which is being rapidly brought to an end. Several European and UK court cases have already ruled against it and the government is now considering a change in the law to allow such holidays to be taken in the next holiday year. However a European Court of Justice case (KHS AG v Schulte) has ruled that a 15 month ‘carry over’ period is lawful and it seems likely that the government may have to re-think its 12 month proposal. Any worker who is being denied such ‘carry over’ rights because sickness prevented them taking holidays, should challenge their employer and should stand a good chance of winning. Remember, however, that the law on this issue only applies to statutory holiday entitlement (20 days a year, or 28 days if bank holidays are not given separately).

Working night shifts regularly has long been viewed as being potentially damaging to health but there is now growing evidence that there may be a link between it and greater incidence of breast cancer. This possibility was raised five years ago by the International Agency for Research on Cancer, which found that long-term night work can disrupt melatonin production and disregulate genes involved in tumour development, leading to a higher risk of breast cancer than amongst women who do not work nights. Now, the Danish Cancer Society has published research which found that women who had worked nights at least three times a week for at least six years were twice as likely to have the disease as those who had not. The Health & Safety Executive has now commissioned the Oxford University cancer epidemiology unit to conduct further research on this issue. However, this is unlikely to be completed before the end of 2015.

More than half of employers are planning to allow greater flexibility for their staff during the Olympics, according to a survey from the Chartered Institute of Personnel and Development. Almost a third will allow staff to work more flexibly or to work from home. An equal number will allow events to be viewed on TV at work and a further 11% will allow on-line viewing on work computers. However the Olympics will also place extra demands on workers in some sectors, like public transport, and some 35% of public sector employers are restricting leave during the games.

Poor mental health, which includes stress, anxiety and depression, affects one in four of us at some time during our working lives and is estimated to cost industry £30 billion a year through absence, lost production and recruitment. Yet mental health is difficult to talk about and few employers have strategies for dealing with it and for helping sufferers. ACAS has now produced a new advisory booklet, Promoting positive mental health at work, which union reps, members and sufferers are urged to look up. It can be downloaded from the ACAS website on www.acas.org.uk/index.aspx?articleid=1900.

What has equality got to do with health and safety?

A new guide from Labour Research Department, Safety, Health and Equality at Work, makes a very simple but important point: There have been huge changes in the labour market since health and safety regulations were introduced in 1978, with a decline in manufacturing, an increase in service industries and big increases in the numbers of female and ethnic minority workers.

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In the light of that, we need to make sure that the health, safety and welfare of everybody in our diverse workforce are being looked after.

This means paying proper attention to issues which affect women more than men, for example stress, upper limb disorders, health and safety during pregnancy and safe travel to and from work. It means paying attention to issues which have a disproportionate effect on black and ethnic minority workers such as bullying, blood disorders which affect certain groups more than others and unsafe working conditions for migrant workers. It means paying attention to the needs of disabled workers, for example to ensuring that risk assessments are disability-proof and that workplace access, layout and emergency procedures take their needs into account. And it means taking into account the needs of young workers, a disproportionate number of whom are injured and killed at work every year, and of LGBT workers who are bullied more than most.

This is not really a revolutionary idea for union reps, safety reps and others because it just says we should be doing our job properly, particularly at a time when the coalition government is doing its best to destroy health and safety protections at work. But the guide, which costs £7.30 from LRD, 78 Blackfriars Road, London SE1 8HF (020 7928 3649 or www.lrd.org.uk), provides a good checklist of the kind of things we should be looking out for and a reminder that we should be recruiting reps and safety reps from all sections of our diverse workforce.

Richard Lynch

9 June 2012

FBRL No 33 20120609

This entry was posted on June 13, 2012 at 11:44 and is filed under Front page 2, movement newsletters. You can follow any responses to this entry through the RSS 2.0 feed.