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HSE needs to ground its research in the workplace
Stronger unions - Health and safety - Thu 4 May 2017 - 11:54
Unions have long been critical of the failure of the HSE to regulate and enforce on occupational health risks. For instance we have asked
asbestos in the workplace, but none of these have happened. Now that the…
Read in full
Categories: Health and Safety issues
The strength of the economy matters for the public finances
ToUChstone blog - Wed 3 May 2017 - 17:05
Summary: It makes no sense to think about the deficit without thinking about the size and strength of the economy.
A Newsnight report on the public finances last night was illustrated with a chart seemingly showing high spending causing the deficit. It w
since at least 2010.
In the report the chart is puts into words: “the enormous deficit caused by the financial crisis was due to tax receipts falling and – to a mu
“Spending cuts have done most work in closing the deficit”.
But looking at this chart alone confuses effect with cause.
The key point is that spending and revenues are shown as a share of GDP. But what happens to GDP is the critical determinant of public
a share of GDP is fairly stable, because both receipts (the numerator) and the economy (the denominator) collapsed. In contrast, the ex
but more because the GDP denominator collapsed.
A more direct way to look at what is going on is to remove GDP from this analysis and look at receipts, expenditure and the deficit in thei
The first chart (A) shows a standard presentation of revenue, expenditure and the deficit; the second (B – done biggest as it’s the key ch
into transfer expenditures (pensions, benefits, tax credits etc, which can change as a result of changes in the economy as well as a resu
of public sector workers, government procurement of goods and services and government investment). The third chart shows changes in
A: public sector finances – levels, £ billion
B: public sector finances – annual change, £ billion
C: GDP and the deficit – annual change, £ billion
Source: ONS, OBR and TUC calculations
[The public finance figures are presented so that the components add up in an accounting sense. So the deficit on (A) is shown as negat
increases in revenues (yellow) have a positive sign and increases in spending (light and dark green) have a negative sign.]
There are basically four distinct post-crisis episodes

global recession causes public sector finances to collapse
The main change comes in 2008-09 when the deficit widens sharply. This is driven mainly by tax revenues collapsing. Having increased
column turns negative). At the same both transfer and final spending expanded:

Transfers rose following the increased benefit bill as people lost jobs and as tax credit payments rose supporting people in work

Final spending rose as part of the G20 stimulus effort, which was aimed at capital spending and other current spending including scrapp
accounting treatment of these interventions is complex.

Note also that a part of the reduction in taxes followed from the VAT cut from 17½% to 15%, which was in place from start of December
Overall, expenditure grew by an additional £21bn, from an increase of 35bn in 2007-08 to 56bn in 2008-09. In total, the deficit increased
in explaining that change.
In the next year (2009-10) the deficit continued to deteriorate sharply as the recession intensified and likewise the decline in tax revenue

The deficit improves as the economy recovers
Then in 2010-11 the improvement to the deficit (diamond above line) was driven mainly by a sharp turnaround in government revenues.
reversed from January 2010.

Spending cuts hit economy harder than expected
But spending cuts had already kicked in from 2010-11, particularly in final expenditure (with dark green vanishing). As (C) shows, GDP g
2012-13 and transfer spending kicked back in likely also as a result of the deterioration in economic conditions. The sum of the parts was

Spending cuts are reversed
So policymakers sensibly changed course. With the arrival of Mark Carney at the Bank of England a new monetary policy framework wa
implemented, and spending cuts became (modest) final spending increases from 2013-14 (dark green is back). From then on an (only) m
year through to the present.
Note two things though. The IFS observe in the opening paragraph of their report, the “weakness” of the recovery overall is “striking”. Wh
per head of the population. The IFS show ‘departmental spending per person’ (in 2016-17 prices) has been reduced to £5,460 per perso
Implications
The mood music of the Newsnight piece was that austerity was going to get even tougher to impose in coming years. In some ways the
historical perspective (chart below) and noting that the Conservative government had not been able to make the cuts it championed in th
But really that’s not the point. The conventional wisdom underpinning this analysis is still back to front. Cutting spending did not repair th
supported the economy. Spending on the NHS, on education on public sector salaries is not only desperately needed, it will support the
surpluses on the chart above were recorded over 1948 to 1950. I wonder what they were doing back then?
The post The strength of the economy matters for the public finances appeared first on ToUChstone blog.
The strength of the economy matters for the public finances
ToUChstone - Economy - Wed 3 May 2017 - 17:05
Summary: It makes no sense to think about the deficit without thinking about the size and strength of the economy.
A Newsnight report on the public finances last night was illustrated with a chart seemingly showing high spending causing the deficit. It w
since at least 2010.
In the report the chart is puts into words: “the enormous deficit caused by the financial crisis was due to tax receipts falling and – to a mu
“Spending cuts have done most work in closing the deficit”.
But looking at this chart alone confuses effect with cause.
The key point is that spending and revenues are shown as a share of GDP. But what happens to GDP is the critical determinant of public
a share of GDP is fairly stable, because both receipts (the numerator) and the economy (the denominator) collapsed. In contrast, the ex
but more because the GDP denominator collapsed.
A more direct way to look at what is going on is to remove GDP from this analysis and look at receipts, expenditure and the deficit in thei
The first chart (A) shows a standard presentation of revenue, expenditure and the deficit; the second (B – done biggest as it’s the key ch
into transfer expenditures (pensions, benefits, tax credits etc, which can change as a result of changes in the economy as well as a resu
of public sector workers, government procurement of goods and services and government investment). The third chart shows changes in
A: public sector finances – levels, £ billion
B: public sector finances – annual change, £ billion
C: GDP and the deficit – annual change, £ billion
Source: ONS, OBR and TUC calculations
[The public finance figures are presented so that the components add up in an accounting sense. So the deficit on (A) is shown as negat
increases in revenues (yellow) have a positive sign and increases in spending (light and dark green) have a negative sign.]
There are basically four distinct post-crisis episodes

global recession causes public sector finances to collapse
The main change comes in 2008-09 when the deficit widens sharply. This is driven mainly by tax revenues collapsing. Having increased
column turns negative). At the same both transfer and final spending expanded:

Transfers rose following the increased benefit bill as people lost jobs and as tax credit payments rose supporting people in work

Final spending rose as part of the G20 stimulus effort, which was aimed at capital spending and other current spending including scrapp
accounting treatment of these interventions is complex.

Note also that a part of the reduction in taxes followed from the VAT cut from 17½% to 15%, which was in place from start of December
Overall, expenditure grew by an additional £21bn, from an increase of 35bn in 2007-08 to 56bn in 2008-09. In total, the deficit increased
in explaining that change.
In the next year (2009-10) the deficit continued to deteriorate sharply as the recession intensified and likewise the decline in tax revenue

The deficit improves as the economy recovers
Then in 2010-11 the improvement to the deficit (diamond above line) was driven mainly by a sharp turnaround in government revenues.
reversed from January 2010.

Spending cuts hit economy harder than expected
But spending cuts had already kicked in from 2010-11, particularly in final expenditure (with dark green vanishing). As (C) shows, GDP g
2012-13 and transfer spending kicked back in likely also as a result of the deterioration in economic conditions. The sum of the parts was

Spending cuts are reversed
So policymakers sensibly changed course. With the arrival of Mark Carney at the Bank of England a new monetary policy framework wa
implemented, and spending cuts became (modest) final spending increases from 2013-14 (dark green is back). From then on an (only) m
year through to the present.
Note two things though. The IFS observe in the opening paragraph of their report, the “weakness” of the recovery overall is “striking”. Wh
per head of the population. The IFS show ‘departmental spending per person’ (in 2016-17 prices) has been reduced to £5,460 per perso
Implications
The mood music of the Newsnight piece was that austerity was going to get even tougher to impose in coming years. In some ways the
historical perspective (chart below) and noting that the Conservative government had not been able to make the cuts it championed in th
But really that’s not the point. The conventional wisdom underpinning this analysis is still back to front. Cutting spending did not repair th
supported the economy. Spending on the NHS, on education on public sector salaries is not only desperately needed, it will support the
surpluses on the chart above were recorded over 1948 to 1950. I wonder what they were doing back then?
The post The strength of the economy matters for the public finances appeared first on ToUChstone blog.
Categories: Economic Issues
The rail franchise needs more than just a reboot
ToUChstone blog - Wed 3 May 2017 - 16:30
The current system of rail franchising leaves much to be desired. Passenger satisfaction is very uneven, and the system is not well align
state of Rail Franchising in the UK. Since 1998 range of private Train Operating Companies (TOCs) have competed for each rail franchi
performance is decidedly mixed with room for significant improvement. While profits for the rail industry have exceeded expectations whe
for reform of the franchising system, but can’t we think bigger than that?
History of rail franchising
The current system dates from the late 1990s, a time when the future of the rail industry did not look optimistic. Passenger numbers were
The motivation of the franchising system was to minimise the costs of the rail system to the public purse. Since then, passenger rail (as o
Companies (TOCs) has more than tripled from £192m in 1998 to £744m in 2016. The train industry, which used to require a subsidy of £
c. £600m to the Treasury in 2016, equivalent to 2.5% of the Department for Transport’s (DfT) total operating budget.
Passengers might disagree
While the financial performance of the TOCs might have exceeded expectations, the same cannot be said for passenger satisfaction. Th
81% between 2015 and 2016. Satisfaction with individual operators varied wildly, from a low of 65% for Southern, to a high of 97% for H
flawed system in itself.
In addition, it should be borne in mind that the TOCs financial performance is still supported by the tax payer. They are not responsible fo
could obviously not operate, receives substantial tax payer funding. Total government support for the rail industry was £4.8bn for the yea
Flaws in the Franchise
The strong financial performance has set up some pitfalls for the TOCs in the future. Recent bids have been predicated on strong revenu
Such ambitious targets may prove challenging for operators – especially in the context of a slowdown in the rate of growth in rail demand
the financial implications could be significant.
The majority of the industry is concentrated in a small number of large franchises. This leaves the supply of rail services vulnerable to sh
on the financial viability of a TOC.Such high stakes do not encourage sustainable investment and long-term planning from successful TO
This is exacerbated by the fact that the TOCs do not own the physical infrastructure of the rail system. The rolling stock (the physical tra
TOCs bid for right to the revenue from the service (minus whatever premium they have agreed to pay to DfT), to decorate the trains they
car etc.). Some of the larger TOCs are responsible for running some stations, but they do not own them. The TOCs themselves, for all th
improvement and maintenance to the regular process of awarding or renewing a franchise.
This produces the very patchy performance indicated above, and creates a wider failing in the national economy. The railway is a vital as
supply chain. But the process of franchising the railways does not do as much as it could currently contribute to this, as it should. This is
wider economy.
What needs to change?
CfBT have called for the system to be reformed to ensure long-term planning and investment play a bigger role the process of awarding
The Public sector has already proven that it can successfully run a rail service. We only need to look at the success of the East Coast M
the service in public hands could offer a vital revenue stream for the public sector, while providing long-term planning and committed inve
The railways represent a vital economic asset, and provide an essential service for millions. Yet, the planning and investment that would
corporation successfully bids for the franchise.
The post The rail franchise needs more than just a reboot appeared first on ToUChstone blog.
The rail franchise needs more than just a reboot
ToUChstone - Public Services - Wed 3 May 2017 - 16:30
The current system of rail franchising leaves much to be desired. Passenger satisfaction is very uneven, and the system is not well align
state of Rail Franchising in the UK. Since 1998 range of private Train Operating Companies (TOCs) have competed for each rail franchi
performance is decidedly mixed with room for significant improvement. While profits for the rail industry have exceeded expectations whe
for reform of the franchising system, but can’t we think bigger than that?
History of rail franchising
The current system dates from the late 1990s, a time when the future of the rail industry did not look optimistic. Passenger numbers were
The motivation of the franchising system was to minimise the costs of the rail system to the public purse. Since then, passenger rail (as o
Companies (TOCs) has more than tripled from £192m in 1998 to £744m in 2016. The train industry, which used to require a subsidy of £
c. £600m to the Treasury in 2016, equivalent to 2.5% of the Department for Transport’s (DfT) total operating budget.
Passengers might disagree
While the financial performance of the TOCs might have exceeded expectations, the same cannot be said for passenger satisfaction. Th
81% between 2015 and 2016. Satisfaction with individual operators varied wildly, from a low of 65% for Southern, to a high of 97% for H
flawed system in itself.
In addition, it should be borne in mind that the TOCs financial performance is still supported by the tax payer. They are not responsible fo
could obviously not operate, receives substantial tax payer funding. Total government support for the rail industry was £4.8bn for the yea
Flaws in the Franchise
The strong financial performance has set up some pitfalls for the TOCs in the future. Recent bids have been predicated on strong revenu
Such ambitious targets may prove challenging for operators – especially in the context of a slowdown in the rate of growth in rail demand
the financial implications could be significant.
The majority of the industry is concentrated in a small number of large franchises. This leaves the supply of rail services vulnerable to sh
on the financial viability of a TOC.Such high stakes do not encourage sustainable investment and long-term planning from successful TO
This is exacerbated by the fact that the TOCs do not own the physical infrastructure of the rail system. The rolling stock (the physical tra
TOCs bid for right to the revenue from the service (minus whatever premium they have agreed to pay to DfT), to decorate the trains they
car etc.). Some of the larger TOCs are responsible for running some stations, but they do not own them. The TOCs themselves, for all th
improvement and maintenance to the regular process of awarding or renewing a franchise.
This produces the very patchy performance indicated above, and creates a wider failing in the national economy. The railway is a vital as
supply chain. But the process of franchising the railways does not do as much as it could currently contribute to this, as it should. This is
wider economy.
What needs to change?
CfBT have called for the system to be reformed to ensure long-term planning and investment play a bigger role the process of awarding
The Public sector has already proven that it can successfully run a rail service. We only need to look at the success of the East Coast M
the service in public hands could offer a vital revenue stream for the public sector, while providing long-term planning and committed inve
The railways represent a vital economic asset, and provide an essential service for millions. Yet, the planning and investment that would
corporation successfully bids for the franchise.
The post The rail franchise needs more than just a reboot appeared first on ToUChstone blog.
Categories: Public Services
Too little too late on teacher retention
ToUChstone blog - Wed 3 May 2017 - 13:57
Yesterday saw the last minute publication of the government response to the inquiry into teacher recruitment and retention undertaken b
published in February, highlighted a number of key issues, including that the increasingly complex range of routes into teaching training
However, the main thrust of the committee’s recommendations centred round its finding that government should put in place a comprehe
efforts trying to increase supply through initial teacher training. This strategy has clearly failed, as evidenced by a number of authoritative
committee’s report points to analysis by the National Audit Office (NAO) showing that between 2011 and 2014 the number of teachers le
more recent years the retention picture would be even more depressing.
Many of the recommendations of the select committee to tackle teacher retention were welcomed by the teaching unions and many othe
pressures are urgent priorities. More specifically, the committee called on government to put in place measures to tackle excessive work
say the teaching unions have been making the case for substantive reforms in these two areas for years, including addressing root caus
But the “elephant in the room” in this whole debate is the real-terms cut to teachers pay as a result of years of pay restraint and how the
leave the profession. On this key point the government’s response to the committee’s report is simply to reference a couple of statistical
doubt that this analysis and conclusion would be shared by the majority of young people entering the profession and those teachers that
So while the response does include some positive proposals (e.g. relating to tackling excessive workload and supporting more flexible w
that it completely ignores a large part of the jigsaw. Until the full picture is addressed, including how pay levels are impacting on people l
immediate future.
The post Too little too late on teacher retention appeared first on ToUChstone blog.
Too little too late on teacher retention
ToUChstone - Public Services - Wed 3 May 2017 - 13:57
Yesterday saw the last minute publication of the government response to the inquiry into teacher recruitment and retention undertaken b
published in February, highlighted a number of key issues, including that the increasingly complex range of routes into teaching training
However, the main thrust of the committee’s recommendations centred round its finding that government should put in place a comprehe
efforts trying to increase supply through initial teacher training. This strategy has clearly failed, as evidenced by a number of authoritative
committee’s report points to analysis by the National Audit Office (NAO) showing that between 2011 and 2014 the number of teachers le
more recent years the retention picture would be even more depressing.
Many of the recommendations of the select committee to tackle teacher retention were welcomed by the teaching unions and many othe
pressures are urgent priorities. More specifically, the committee called on government to put in place measures to tackle excessive work
say the teaching unions have been making the case for substantive reforms in these two areas for years, including addressing root caus
But the “elephant in the room” in this whole debate is the real-terms cut to teachers pay as a result of years of pay restraint and how the
leave the profession. On this key point the government’s response to the committee’s report is simply to reference a couple of statistical
doubt that this analysis and conclusion would be shared by the majority of young people entering the profession and those teachers that
So while the response does include some positive proposals (e.g. relating to tackling excessive workload and supporting more flexible w
that it completely ignores a large part of the jigsaw. Until the full picture is addressed, including how pay levels are impacting on people l
immediate future.
The post Too little too late on teacher retention appeared first on ToUChstone blog.
Categories: Public Services
Personal Protective Equipment: the right fit for women?
Stronger Union - Wed 3 May 2017 - 13:43
Personal Protective Equipment (PPE) is there to protect workers from potential hazards to their health and safety; it must be used prope
appropriate PPE to carry out their jobs. This is exposing women to several health and safety risks.…
Read in full
Personal Protective Equipment: the right fit for women?
Stronger unions - Health and safety - Wed 3 May 2017 - 13:43
Personal Protective Equipment (PPE) is there to protect workers from potential hazards to their health and safety; it must be used prope
appropriate PPE to carry out their jobs. This is exposing women to several health and safety risks.…
Read in full
Categories: Health and Safety issues
Why insecurity at work doesn’t need to be the new normal
ToUChstone blog - Wed 3 May 2017 - 08:31
New research we’ve published today, commissioned from the National Institute for Economic and Social Research, shows that insecure
The rise and rise of insecure work in the UK is sometimes treated as a natural consequence of technological and social change. The dev
order to reduce costs (and increased the ease for would- be entrepreneurs of setting up on their own), and we’re told that people value th
of employment relationship – whether gig working, self-employment or zero hours contracts and agency work– despite the fact that these
If insecure work is inevitable, we’d expect to see similar trends across advanced economies. After all, Britain is behind the curve on its a
‘robotisation’). So we asked NIESR to research trends in the growth of insecure work across Europe, to see how typical the UK’s experie
In one area we’re a clear outlier. The striking rise in the number of people in self-employment since the recession is the highest anywher
people on this basis doesn’t have something to do with this.
Growth in total self-employment between 2008 and 2015 (EU28)
Source: European Labour Force Survey (2008 and 2015). Age Class: From 20-64 years
The growth in temporary forms of work while less striking is still the third highest within the EU (though it’s important to note that the UK s
major European nations have introduced policy innovations in response to labour market trends in order provide workers in these jobs w

In France, workers can only be on a fixed-term contract for 18 months, and Germany has introduced a maximum hiring period of 18 mon

Zero-hours contracts do not exist in many EU countries and are strongly regulated in others (e.g. Netherlands, Italy, Germany), but only
shift, and to provide regular hours when the worker reaches a certain number of weekly hours over a given period.
And while it’s often claimed that a lack of security is the price UK workers pay for our record employment rates, it’s striking that Germany
employment growth outpace that of the UK.
Growth in total employment between 2008 and 2015 (EU28)
Source: European Labour Force Survey (2008 2015). Age Class: From 20-64 years
The report shows that policy matters – and that how governments choose to react to attempts by employers to minimise their costs can m
The election provides a perfect opportunity for politicians of all parties to show that the UK can catch up in terms of its efforts to provide b

Ban zero-hours contracts: people working regular hours should have a right to a guaranteed-hours contract.

Give people on variable-hours contracts a right to overtime pay for hours outside of their contracts.

Give all workers to have a right to a written statement of terms, conditions and working hours, from day one.

Ensure everyone at work to get the same rights as an employee, unless the employer can show that they are genuinely self-employed.

Guarantee agency workers the going rate for the job, on an equal basis with directly-employed workers.
The post Why insecurity at work doesn’t need to be the new normal appeared first on ToUChstone blog.
Why insecurity at work doesn’t need to be the new normal
ToUChstone - Economy - Wed 3 May 2017 - 08:31
New research we’ve published today, commissioned from the National Institute for Economic and Social Research, shows that insecure
The rise and rise of insecure work in the UK is sometimes treated as a natural consequence of technological and social change. The dev
order to reduce costs (and increased the ease for would- be entrepreneurs of setting up on their own), and we’re told that people value th
of employment relationship – whether gig working, self-employment or zero hours contracts and agency work– despite the fact that these
If insecure work is inevitable, we’d expect to see similar trends across advanced economies. After all, Britain is behind the curve on its a
‘robotisation’). So we asked NIESR to research trends in the growth of insecure work across Europe, to see how typical the UK’s experie
In one area we’re a clear outlier. The striking rise in the number of people in self-employment since the recession is the highest anywher
people on this basis doesn’t have something to do with this.
Growth in total self-employment between 2008 and 2015 (EU28)
Source: European Labour Force Survey (2008 and 2015). Age Class: From 20-64 years
The growth in temporary forms of work while less striking is still the third highest within the EU (though it’s important to note that the UK s
major European nations have introduced policy innovations in response to labour market trends in order provide workers in these jobs w

In France, workers can only be on a fixed-term contract for 18 months, and Germany has introduced a maximum hiring period of 18 mon

Zero-hours contracts do not exist in many EU countries and are strongly regulated in others (e.g. Netherlands, Italy, Germany), but only
shift, and to provide regular hours when the worker reaches a certain number of weekly hours over a given period.
And while it’s often claimed that a lack of security is the price UK workers pay for our record employment rates, it’s striking that Germany
employment growth outpace that of the UK.
Growth in total employment between 2008 and 2015 (EU28)
Source: European Labour Force Survey (2008 2015). Age Class: From 20-64 years
The report shows that policy matters – and that how governments choose to react to attempts by employers to minimise their costs can m
The election provides a perfect opportunity for politicians of all parties to show that the UK can catch up in terms of its efforts to provide b

Ban zero-hours contracts: people working regular hours should have a right to a guaranteed-hours contract.

Give people on variable-hours contracts a right to overtime pay for hours outside of their contracts.

Give all workers to have a right to a written statement of terms, conditions and working hours, from day one.

Ensure everyone at work to get the same rights as an employee, unless the employer can show that they are genuinely self-employed.

Guarantee agency workers the going rate for the job, on an equal basis with directly-employed workers.
The post Why insecurity at work doesn’t need to be the new normal appeared first on ToUChstone blog.
Categories: Economic Issues
We need to stop the financialisation of justice
ToUChstone - International - Tue 2 May 2017 - 10:17
The campaigns against TTIP and CETA – EU trade deals with the US and Canada – have raised public awareness of the dangers of the
deals which allows international companies to sue governments for threats to their future profits.
However, where unions and civil society groups see a threat to democracy, financial institutions from hedge funds to insurers have spott
millions, funders are able to secure a large share of eventual awards, which can run to hundreds of millions and even billions. As ISDS c
This is known as ‘third party funding’, referred to by one prominent international arbitrator as a ‘gambler’s nirvana’. And the explosion of t
2009 and 2015 – spells a whole manner of trouble for the public interest, the public purse, and the rule of law.
Third party funding enables companies to launch ISDS claims at low or no risk, and thereby more credibly wield the threat of an ISDS cla
UK oil company Rockhopper which announced this March that it was using ISDS to sue Italy over its ban on oil exploration within 12 mile
Rockhopper is receiving third party funding to cover its legal costs.
From Costa Rica to Colombia to Bolivia, third party funding has underwritten ISDS claims related to mining ‘investments’ associated with
governments.
But the deep pockets of third party funders are not mirrored in the budgets of developing country governments, which bear the brunt of IS
may simply cave in to company demands and drop public interest policies rather than risk the time and expense of a legal fight.
Meanwhile, those governments that do defend their policies face an ever growing number of ISDS claims against them. Given the low pr
awards) third party funders have an incentive to inflate the number of cases in which they have a stake in order to effectively spread thei
last five years compared to the five years before – correlates with the boom in third party financing.
Alarmingly, a stake in an ISDS claim is increasingly being treated as a derivative that can be marketised like any other – bought, sold or
as part of a sophisticated secondary market in claims.
It should come as no surprise that lawyers are asking if third party funding is ‘the best thing since sliced bread’.
But the Trade Justice Movement – a coalition of civil society groups and trade unions –answer this with a resounding ‘no’.
We are campaigning for ISDS and all its variants – like the Investment Court System in the EU-Canada deal – to be written out of existin
party funding of ISDS cases.
Only this will prevent international investors from profiteering from a system that undermines workers’ rights, the environment and democ
The post We need to stop the financialisation of justice appeared first on ToUChstone blog.
Categories: International Issues
We need to stop the financialisation of justice
ToUChstone blog - Tue 2 May 2017 - 10:17
The campaigns against TTIP and CETA – EU trade deals with the US and Canada – have raised public awareness of the dangers of the
deals which allows international companies to sue governments for threats to their future profits.
However, where unions and civil society groups see a threat to democracy, financial institutions from hedge funds to insurers have spott
millions, funders are able to secure a large share of eventual awards, which can run to hundreds of millions and even billions. As ISDS c
This is known as ‘third party funding’, referred to by one prominent international arbitrator as a ‘gambler’s nirvana’. And the explosion of t
2009 and 2015 – spells a whole manner of trouble for the public interest, the public purse, and the rule of law.
Third party funding enables companies to launch ISDS claims at low or no risk, and thereby more credibly wield the threat of an ISDS cla
UK oil company Rockhopper which announced this March that it was using ISDS to sue Italy over its ban on oil exploration within 12 mile
Rockhopper is receiving third party funding to cover its legal costs.
From Costa Rica to Colombia to Bolivia, third party funding has underwritten ISDS claims related to mining ‘investments’ associated with
governments.
But the deep pockets of third party funders are not mirrored in the budgets of developing country governments, which bear the brunt of IS
may simply cave in to company demands and drop public interest policies rather than risk the time and expense of a legal fight.
Meanwhile, those governments that do defend their policies face an ever growing number of ISDS claims against them. Given the low pr
awards) third party funders have an incentive to inflate the number of cases in which they have a stake in order to effectively spread thei
last five years compared to the five years before – correlates with the boom in third party financing.
Alarmingly, a stake in an ISDS claim is increasingly being treated as a derivative that can be marketised like any other – bought, sold or
as part of a sophisticated secondary market in claims.
It should come as no surprise that lawyers are asking if third party funding is ‘the best thing since sliced bread’.
But the Trade Justice Movement – a coalition of civil society groups and trade unions –answer this with a resounding ‘no’.
We are campaigning for ISDS and all its variants – like the Investment Court System in the EU-Canada deal – to be written out of existin
party funding of ISDS cases.
Only this will prevent international investors from profiteering from a system that undermines workers’ rights, the environment and democ
The post We need to stop the financialisation of justice appeared first on ToUChstone blog.
How the tax system is driving people into insecure work in unexpected ways
ToUChstone blog - Tue 2 May 2017 - 08:31
I work for the Low Incomes Tax Reform Group, a group of tax and welfare rights specialists with expertise in the tax and related welfare
credits and interactions with other means-tested benefits. A good number of the problems have arisen in the context of non-standard ‘fle
What we are seeing in our work supports other evidence and research (including the TUC’s) showing that the numbers of people in such
Insurance contributions reform might help reverse this trend, correspondence we receive into our mailbox from workers exposes that, in
We wanted to share this insight to help inform the debate and because, in our experience, reforms which tackle only part of the problem
Zero hours contracts
It is well established that there are incentives for employers to keep a worker’s hours low (or indeed to split up previously full time jobs in
in at £157 week. This equates to 20 hours @ the National Living Wage (NLW).
Putting National Insurance (NIC) on an annual and cumulative basis, as has been widely discussed, might help remove some of the attra
those on low pay with multiple jobs to build a National Insurance contributions record), but it does not address the fact that there are othe
For example, if I am an employer and I only offer 15 hours a week at the NLW (meaning earnings of less than £113), I can potentially av

having to pay Statutory Sick Pay – currently payable at around £89 a week (for a maximum of 28 weeks) which, since April 2014, is not r

having to pay parental payments, e.g. Statutory Maternity Pay –much if not all of which is reclaimable from the Government, but paymen
which were introduced from April 2015 – the technical guidance is 66 pages long and there are possible penalties of up to £3,000 if I get

having to pay any contributions into my workers’ pension scheme which I have had to set up for them under the auto enrolment program
then 3%, in April 2018 and April 2019 respectively;

having to register as an employer with HMRC or operate a payroll at all, if I manage to keep all my workers’ pay at under £113 per week
system which, since 2013, has required me to submit pay and tax information about my employee to HMRC every time I pay them (rathe
Self-employment
In terms of factors that pull (or push) workers into self-employment, clearly the more beneficial NIC treatment of the self-employed is a ‘c
unwary or desperate. Closer alignment of the NIC treatment between employees and self-employed could help reduce the drive towards
low-paid, genuinely self-employed, workers and how such impacts could be mitigated.
However such a move would do nothing about other differences in treatment that potentially contribute to the self-employment ‘problem’
employees cannot. This, perhaps counter intuitively (until very recently), has proved lucrative due to the Flat Rate Scheme (FRS).
Let me explain. Under the FRS, a self-employed business charges VAT on its taxable supplies at 20% but instead of paying over this ‘ou
then the business gets to keep 10% of the VAT they have collected for themselves. This is theoretically to compensate them for input tax
employed businesses whose trade consists mainly of the provision of their labour will have suffered little, if any, such input tax. The FRS
or, as is likely, the intermediary who is helping them ‘manage’ their VAT registration for a bite of the cherry!
From April 2017, a self-employed person deemed to be a “limited cost trader” should apply a new rate of 16.5% instead of applying a low
have yet to see whether these new rules will have the intended effect or whether any means of getting around them will be found.
Agency workers
No discussion of non-standard work would be complete without a mention of agency workers.
Agency workers historically were called upon as an additional labour resource. These days it seems that businesses are bringing in agen
the bulk of the workforce, for example as in the case of Sports Direct.
One of the reasons for this is that agency workers (if they work under a special type of contract called an overarching contract or ‘umbrel
‘temporary workplace’ rules (swapping taxable salary for tax and NIC free expenses reimbursements also saves the employer 13.8% Na
that contracts can be negotiated at lower prices and means that agency workers are a very attractive option for end clients.
HMRC take the view that these umbrella arrangements are using the temporary workplace rules in a way that was not intended. Further,
through their ordinary compliance and enforcement activity. New rules were introduced from April 2016 which were supposed to restrict r
worker is NOT under the supervision, direction or control of any person). But, with apparently little fear of HMRC, many umbrella compan
basis as before. They are also managing to avoid some other new rules from April 2016 which restrict their ability to process expenses, t
Even if measures were introduced which managed to address zero hour contract/false self-employment issues in the round, this option w
get a handle on the still thriving agency worker industry as part of any effort to regularise the insecure employment landscape – only suc
The post How the tax system is driving people into insecure work in unexpected ways appeared first on ToUChstone blog.
How the tax system is driving people into insecure work in unexpected ways
ToUChstone - Society and Welfare - Tue 2 May 2017 - 08:31
I work for the Low Incomes Tax Reform Group, a group of tax and welfare rights specialists with expertise in the tax and related welfare
credits and interactions with other means-tested benefits. A good number of the problems have arisen in the context of non-standard ‘fle
What we are seeing in our work supports other evidence and research (including the TUC’s) showing that the numbers of people in such
Insurance contributions reform might help reverse this trend, correspondence we receive into our mailbox from workers exposes that, in
We wanted to share this insight to help inform the debate and because, in our experience, reforms which tackle only part of the problem
Zero hours contracts
It is well established that there are incentives for employers to keep a worker’s hours low (or indeed to split up previously full time jobs in
in at £157 week. This equates to 20 hours @ the National Living Wage (NLW).
Putting National Insurance (NIC) on an annual and cumulative basis, as has been widely discussed, might help remove some of the attra
those on low pay with multiple jobs to build a National Insurance contributions record), but it does not address the fact that there are othe
For example, if I am an employer and I only offer 15 hours a week at the NLW (meaning earnings of less than £113), I can potentially av

having to pay Statutory Sick Pay – currently payable at around £89 a week (for a maximum of 28 weeks) which, since April 2014, is not r

having to pay parental payments, e.g. Statutory Maternity Pay –much if not all of which is reclaimable from the Government, but paymen
which were introduced from April 2015 – the technical guidance is 66 pages long and there are possible penalties of up to £3,000 if I get

having to pay any contributions into my workers’ pension scheme which I have had to set up for them under the auto enrolment program
then 3%, in April 2018 and April 2019 respectively;

having to register as an employer with HMRC or operate a payroll at all, if I manage to keep all my workers’ pay at under £113 per week
system which, since 2013, has required me to submit pay and tax information about my employee to HMRC every time I pay them (rathe
Self-employment
In terms of factors that pull (or push) workers into self-employment, clearly the more beneficial NIC treatment of the self-employed is a ‘c
unwary or desperate. Closer alignment of the NIC treatment between employees and self-employed could help reduce the drive towards
low-paid, genuinely self-employed, workers and how such impacts could be mitigated.
However such a move would do nothing about other differences in treatment that potentially contribute to the self-employment ‘problem’
employees cannot. This, perhaps counter intuitively (until very recently), has proved lucrative due to the Flat Rate Scheme (FRS).
Let me explain. Under the FRS, a self-employed business charges VAT on its taxable supplies at 20% but instead of paying over this ‘ou
then the business gets to keep 10% of the VAT they have collected for themselves. This is theoretically to compensate them for input tax
employed businesses whose trade consists mainly of the provision of their labour will have suffered little, if any, such input tax. The FRS
or, as is likely, the intermediary who is helping them ‘manage’ their VAT registration for a bite of the cherry!
From April 2017, a self-employed person deemed to be a “limited cost trader” should apply a new rate of 16.5% instead of applying a low
have yet to see whether these new rules will have the intended effect or whether any means of getting around them will be found.
Agency workers
No discussion of non-standard work would be complete without a mention of agency workers.
Agency workers historically were called upon as an additional labour resource. These days it seems that businesses are bringing in agen
the bulk of the workforce, for example as in the case of Sports Direct.
One of the reasons for this is that agency workers (if they work under a special type of contract called an overarching contract or ‘umbrel
‘temporary workplace’ rules (swapping taxable salary for tax and NIC free expenses reimbursements also saves the employer 13.8% Na
that contracts can be negotiated at lower prices and means that agency workers are a very attractive option for end clients.
HMRC take the view that these umbrella arrangements are using the temporary workplace rules in a way that was not intended. Further,
through their ordinary compliance and enforcement activity. New rules were introduced from April 2016 which were supposed to restrict r
worker is NOT under the supervision, direction or control of any person). But, with apparently little fear of HMRC, many umbrella compan
basis as before. They are also managing to avoid some other new rules from April 2016 which restrict their ability to process expenses, t
Even if measures were introduced which managed to address zero hour contract/false self-employment issues in the round, this option w
get a handle on the still thriving agency worker industry as part of any effort to regularise the insecure employment landscape – only suc
The post How the tax system is driving people into insecure work in unexpected ways appeared first on ToUChstone blog.
Categories: Social Issues
Rights at work – this May Day, it’s all happening at once
ToUChstone blog - Sun 30 Apr 2017 - 21:01
You wait for years for the needs of working people to become the focus of political attention and then suddenly everybody’s interested. T
long overdue dawning of understanding at the highest reaches of the European Union that working people are disillusioned with the Euro
Eighteen months ago, we couldn’t get the Remain campaign in the EU referendum to see workplace rights as an issue at all. Since 23 Ju
working people, making it one of the top twelve Brexit objectives of her government. Now, everyone is at it. Labour has pledged twenty im
Frances O’Grady on Peston this morning. In Brussels, the European Commission launched its European Pillar of Social Rights on Wedn
would need a level playing field of workplace rights.
Responding to the Council of Ministers’ Brexit negotiating guidelines, Frances O’Grady said:
“This is a golden opportunity to secure British workers’ rights. If the Prime Minister wants to keep her promise to protect rights at work, sh
heart of its Brexit negotiating strategy. That means guaranteeing workplace rights as good as or better than in the rest of Europe, now an
“Britain must avoid a race to the bottom which would see working people’s rights across Europe trampled on.”
We aren’t so green that we believe Theresa May’s pledges (she wasn’t that convincing in her response on Peston, and we won’t be conv
before their workers’ charter can be implemented, although the TUC has called on all other political parties to set out their stall on worke
satisfactory reboot of the social dimension. Negotiations on an EU-UK trade deal – perhaps the most bankable of all these developments
But what they all show is that working people are back at the top of the political agenda, and politicians here and across Europe realise t
platitudes and promises. It means we can seek assurances about how workers’ needs will be met, whether in terms of tackling the living
Despite its shortcomings, the European Pillar of Social Rights includes measures such as better rights to paid parental leave which woul
claimed credit for British laws being at least as good as EU laws on issues like parental leave (although it would in fact be illegal for the U
rules on paid parental leave come into force after the UK leaves that EU, we can demand that politicians pledge to keep up with those rig
And while it’s vitally important that existing EU directives on workers’ rights remain in force during any transitional period after we formall
good as – if not better than – EU rights now and in the future not only because British workers’ rights mustn’t be undermined, but also be
of the EU.
The General Election, Brexit and a crisis in politics and economics across Europe demands that politicians go beyond lip service to work
The post Rights at work – this May Day, it’s all happening at once appeared first on ToUChstone blog.
Rights at work – this May Day, it’s all happening at once
ToUChstone - EUref - Sun 30 Apr 2017 - 21:01
You wait for years for the needs of working people to become the focus of political attention and then suddenly everybody’s interested. T
long overdue dawning of understanding at the highest reaches of the European Union that working people are disillusioned with the Euro
Eighteen months ago, we couldn’t get the Remain campaign in the EU referendum to see workplace rights as an issue at all. Since 23 Ju
working people, making it one of the top twelve Brexit objectives of her government. Now, everyone is at it. Labour has pledged twenty im
Frances O’Grady on Peston this morning. In Brussels, the European Commission launched its European Pillar of Social Rights on Wedn
would need a level playing field of workplace rights.
Responding to the Council of Ministers’ Brexit negotiating guidelines, Frances O’Grady said:
“This is a golden opportunity to secure British workers’ rights. If the Prime Minister wants to keep her promise to protect rights at work, sh
heart of its Brexit negotiating strategy. That means guaranteeing workplace rights as good as or better than in the rest of Europe, now an
“Britain must avoid a race to the bottom which would see working people’s rights across Europe trampled on.”
We aren’t so green that we believe Theresa May’s pledges (she wasn’t that convincing in her response on Peston, and we won’t be conv
before their workers’ charter can be implemented, although the TUC has called on all other political parties to set out their stall on worke
satisfactory reboot of the social dimension. Negotiations on an EU-UK trade deal – perhaps the most bankable of all these developments
But what they all show is that working people are back at the top of the political agenda, and politicians here and across Europe realise t
platitudes and promises. It means we can seek assurances about how workers’ needs will be met, whether in terms of tackling the living
Despite its shortcomings, the European Pillar of Social Rights includes measures such as better rights to paid parental leave which woul
claimed credit for British laws being at least as good as EU laws on issues like parental leave (although it would in fact be illegal for the U
rules on paid parental leave come into force after the UK leaves that EU, we can demand that politicians pledge to keep up with those rig
And while it’s vitally important that existing EU directives on workers’ rights remain in force during any transitional period after we formall
good as – if not better than – EU rights now and in the future not only because British workers’ rights mustn’t be undermined, but also be
of the EU.
The General Election, Brexit and a crisis in politics and economics across Europe demands that politicians go beyond lip service to work
The post Rights at work – this May Day, it’s all happening at once appeared first on ToUChstone blog.
Categories: EU Referendum
Global trade deals can’t substitute for a good Brexit deal
ToUChstone blog - Fri 28 Apr 2017 - 19:49
This week the think tank OpenEurope published a report with recommendations for Britain’s future trade after it leaves the EU.
It suggests that Britain may be able to make up much of its shortfall in trade resulting from leaving the EU by strengthening its trade, part
However this majorly underestimates the costs both to the economy and to workers of leaving the EU single market while it fails to take i
recommends for Britain post-Brexit.
The EU single market matters – for trade and rights
Controversially the OpenEurope claims ‘the UK’s services exports do not benefit from EU membership.’ I can’t see how this claim can b
markets for our services. About a third of our services are traded in the EU. NIESR estimates it contributes 2.6% to our economy each
Our significant trade in services with EU countries has been facilitated by the common framework of regulations and standards between
can establish itself in another EU country without additional registration. It also means that the staff in that legal firm have the right to be
The same is true of trade in goods between EU countries. Not only has free trade in goods been enabled by the lack of tariffs between E
countries undercutting each other and enabling a level playing field.
The TUC has highlighted that it is essential for the UK government to ensure that any Brexit deal guarantees that UK law will continue to
In addition the deal should ensure there continues to be barrier and tariff free trade in goods and services with the EU which is crucial for
Many, such as trade experts at UKTPO, have highlighted how difficult it would be for the UK to negotiate a similar level of barrier free tra
have around standards, both technical, but also on social and employment rights.
In China – one of the countries OpenBritain suggests could be a potential partner for future UK deals – not only are products produced to
join independent trade unions and labour rights campaigners are frequently jailed.
Of course the UK should seek to build trade relationships with non-EU countries after Brexit but this must be in addition to, rather than a
rights are protected and extended, both here and abroad.
Public services under threat
There are also dangers in OpenEurope’s suggestion that the UK government turning away from the EU single market and pushing for gl
The TUC, like unions internationally, have campaigned to raise awareness of the dangers of agreements like the Trade in Services Agre
however, the way it seeks to do so is by bringing down important protections for public services that would increase privatisation, while th
For unions, rather than rush to negotiate trade deals with partners that don’t respect workers’ rights or pursue liberalisation drives in serv
EU and an industrial strategy that empowers the workforce, funds skills and addresses regional inequalities.
The post Global trade deals can’t substitute for a good Brexit deal appeared first on ToUChstone blog.
Global trade deals can’t substitute for a good Brexit deal
ToUChstone - International - Fri 28 Apr 2017 - 19:49
This week the think tank OpenEurope published a report with recommendations for Britain’s future trade after it leaves the EU.
It suggests that Britain may be able to make up much of its shortfall in trade resulting from leaving the EU by strengthening its trade, part
However this majorly underestimates the costs both to the economy and to workers of leaving the EU single market while it fails to take i
recommends for Britain post-Brexit.
The EU single market matters – for trade and rights
Controversially the OpenEurope claims ‘the UK’s services exports do not benefit from EU membership.’ I can’t see how this claim can b
markets for our services. About a third of our services are traded in the EU. NIESR estimates it contributes 2.6% to our economy each
regulations and standards between EU countries that is involved in single market membership. These rules mean that, for example, a leg
in that legal firm have the right to be treated with the same rights in one EU country as in another.
The TUC is highlighting the importance of these common standards for both the UK and EU – they prevent countries undercutting each o
deal guarantees that UK law will continue to uphold the same standards –including those for goods as well as working conditions – as th
In addition the deal should ensure that barrier and tariff free trade in goods and services with the EU – that is so crucial for jobs and our e
Many – not least former UK permanent representative to the EU Sir Ivan Rogers – have highlighted how difficult it would be for the UK to
due to the vastly different regulations non-EU countries have around standards, both technical, but also on social and employment rights
In China – one of the countries OpenBritain suggests could be a potential partner for future UK deals – not only are products produced to
join independent trade unions and labour rights campaigners are frequently jailed.
Of course the UK should seek to build trade relationships with non-EU countries after Brexit but this must be in addition to, rather than a
rights are protected and extended, both here and abroad.
The dangers of global liberalisation of services
There are also dangers in OpenEurope’s suggestion that the UK government turning away from the EU single market and pushing for gl
The TUC, like unions internationally, have campaigned to raise awareness of the dangers of agreements like the Trade in Services Agre
however, the way it seeks to do so is by bringing down important protections for public services that would increase privatisation, while th
For unions, rather than rush to negotiate trade deals with partners that don’t respect workers’ rights or pursue liberalisation drives in serv
EU and an industrial strategy that empowers the workforce, funds skills and addresses regional inequalities.
The post Global trade deals can’t substitute for a good Brexit deal appeared first on ToUChstone blog.
Categories: International Issues
Weaker GDP growth symptomatic of failure of the London-centric model
ToUChstone blog - Fri 28 Apr 2017 - 13:52
The economy grew by 0.3% in the first quarter of 2017, down on 0.7% in the final quarter of 2017. More than 80% of the first quarter gro
As the chart shows, the increased contribution here (in light grey) was not enough to offset the reduction from the fall in spending on sho
The result here resonates with TUC analysis issued this morning showing the dominance of London and the South East, the capital of bu
Contributions to quarterly GDP growth, percentage points
Source: ONS and TUC calculations
We won’t know how recent GDP growth is allocated between the regions for some time yet – the latest figures are for calendar year 201
steadily increasing since the financial crisis. Our simple projections show London and the South East accounting for 40% of the UK econ
London and the South East, % of UK GDP
Source: ONS and TUC projections
[The analysis projects forward the share of regional/national GDP on the basis of trends between 2010 and 2015. These figures are not
release]
The dominant source of growth over the whole of last year was consumer spending. With credit still expanding it might be too early to ca
standards crisis, relying on shopping to prop up the economy doesn’t look like such a good idea.
There is an unpleasant irony here. The flaws of the finance-oriented and London-centric economy were starkly exposed in the financial c
pace.
The TUC has long argued that a comprehensive industrial strategy is essential for rebalancing the economy, and for bringing strong grow

Invest more in infrastructure, to enable the UK to compete with other advanced economies. Digital and communications, transport, wa

Use public procurement policy to improve jobs and pay, by sourcing goods and services from companies that give workers decent p
overlooked in favour of those seeking to compete on low cost.

Grow the UK’s green economy, by setting a robust target of 50 per cent of the UK’s energy coming from renewables by 2030 and mak

Target low paid sectors of the economy, to find ways to improve productivity and raise skill requirements so workers have better pay a

Give workers a stronger voice, by putting workers on company boards and giving worker representatives seats on industrial sector cou
The post Weaker GDP growth symptomatic of failure of the London-centric model appeared first on ToUChstone blog.
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