I hate Wimbledon fortnight. The commute to SW19 is worse than usual as already crammed train carriages fill to bursting with tennis groupies, their picnic hampers and huge umbrellas making them seem like a civilian army on the move. I wouldn’t mind if these people were normal sports fans. Most instead give the impression that the event is just another part of the up-market summer season, on a par with Royal Ascot, Henley Regatta, Glyndebourne and the Proms. Even those who appear to care about the tournament, and make casual reference to the chances of ‘Andy, Roger or Rafael’ as though the players are personal friends, doubtless secretly pray for rain in the hope of conjuring up the spectre of Sir Cliff Richard performing a deadly duet with some equally hideous celeb.
While I’m at it, I should admit that I don’t much care for tennis at all nowadays, which merely adds to my late June grumpiness. Matches can sometimes be exciting though are rarely as entertaining as I remember them being in the days of Connors, Borg and McEnroe. Perhaps it’s just another symptom of the grinding professionalism that turns many a modern sportsperson into a high performing dull automaton. Alternatively it could be a pernicious side effect of alleged match-fixing. Or maybe it’s because the players are generally less butch and aggressive than they used to be – and not just the women. However, something the All England Club can be genuinely proud of is its decision last year to pay equal prize money to male and female players. One might marvel at the sheer scale of the cash on offer (this year’s singles champions alone will each pocket £750,000) but at least there is no longer any unfair discrimination at play.
If only the same could be said of society at large. A generation after the Equal Pay Act, men in full-time jobs still on average earn 17 per cent more per hour than their female counterparts. Admittedly, there has been a lot of progress. In the mid-1970s the gender pay gap was 33 per cent. But on current trends full pay equality remains a long way off, which is why leading women’s rights pressure group the Fawcett Society recently joined forces with trade union leaders and anti-poverty campaigners to call on the Government to take swift action to serve women a better deal. Compulsory gender pay audits for all organisations tops the shopping list of items the lobbyists want included in the forthcoming Equalities Bill. Yet while I have some personal sympathy for this proposal – which will gain merit the longer too many private sector employers drag their heels on carrying out voluntary audits – legal compulsion can only play a small part in addressing the underlying causes of gender inequality. (See our Equal pay webpages.)
Direct and indirect forms of pay discrimination account for a small fraction of male-female earnings disparity. The main cause is a persistent marked difference in the types of jobs men and women do and their respective patterns of working hours. While this has a something to do with employer practice and workplace tradition equally if not more important are the choices the sexes make when it comes to participation in the jobs market, decisions which in turn are strongly influenced by domestic circumstances. Significantly, young women in their late teens and twenties don’t fare too badly on pay compared to young men (they used to, the virtual closure of the ‘young gender pay gap’ being the most discernible impact of equal pay laws). But from then on the blokes clearly start to do better. And a big reason for this is settling down and having kids.
Women who stay single (holding other characteristics constant) earn as much on average as men (in fact slightly more). Those living with a man (whether or not having obtained a marriage licence) earn less. This gap gets wider once the patter of tiny feet is heard, and wider still the more tiny feet there are. So in pay terms at least, matching and hatching offers a raw deal to the fairer sex. How one should view this depends on whether the outcome reflects women’s free choice over the division of their time between paid work and domestic work or instead stems from social or workplace norms that disadvantage them. I personally think the jury is out on this matter. Sure, there are still a lot of outdated notions about women’s place in the world. But by the same token the sisterhood is generally better placed than ever before to stand up for itself. Either way, however, the verdict is ultimately likely to emerge from what is played out in the home and related pressure to reassess social norms, rather than in the court. Which reminds me, “anyone not for tennis”?
If familiarity truly does build contempt, the word “leadership” is in deep trouble. Over the past few years it’s been over-used to the point of losing its meaning. No one wants to be a manager any longer – leadership (in all its various guises) is the only badge worth wearing.Well, there’s nothing like a sharp (and hopefully short) period of economic turmoil to sort out the real leaders from the wannabes. In ‘Leading Through Uncertain Times’ – the first in our new series of ‘Futures’ reports – we’ve asked leading HR professionals and CEOs from the private, public and voluntary sectors what qualities our leaders will need to display to steer their organisations to safe waters.I was expecting some tough talking, even bravado. What we got was a consensus view that leaders need to keep their nerve, continue investing in developing the leaders of the future, and a genuine recognition that in uncertain times, it’s doubly important to keep your people engaged and motivated.This isn’t special pleading for HR – it’s a reflection of more mature understanding of the importance of people, and the way they are managed, to organisational success. And it comes from leaders who’ve been at the sharp end and know what they are talking about. Neil Roden has overseen some of the toughest and most admired mergers and acquisitions in UK business history. Joe Duckworth had to manage a huge corruption investigation on the Isle of Wight. Chris Burchell was a manager at Railtrack when the Ladbroke Grove rail crash killed 31 people. I hope you’ll find their reflections on leadership in uncertain times interesting, even inspiring. But their essays are only the start of a process of debate – now we want to hear from you: do you agree with their conclusions, have we missed anything crucial, have we been too optimistic about the readiness of UK plc to invest in the future and take a long-term, strategic view? Over to you...
The weekend newspapers were preoccupied with what will almost certainly prove to be two pointless electoral ballots. Most futile is Tory freedom fighter David Davis’s self-inflicted by-election in his Haltemprice and Howden constituency. Mr Davis’s decision to resign his seat in the House of Commons to fight a re-election campaign highlighting the Government’s so-called attack on civil liberties has been described as a ‘farcical stunt’ (a phrase which unfortunately doubles as unsavoury rhyming slang for the former shadow Home Secretary himself). Mr Davis will either be returned to Parliament in a less powerful position than the one he vacates or beaten by a populist polemicist like Kelvin MacKenzie. The erstwhile Sun newspaper editor (who once brought us the classic headline, ‘Up Yours Delors!’) will doubtless have rejoiced at that other vain poll result – the ‘No’ vote in Ireland’s referendum on the EU Lisbon Treaty. This emerald upset has thrilled euro sceptics but is surely only a prelude to yet another less than democratic body swerve by the EU political establishment that will take us closer to its cherished goal of a centralised Europe – and eventually trigger further debate about how far Brussels should be allowed to encroach on our national sovereignty (which incidentally raises far more important issues about personal liberty than anything David Davis is fretting about).
By coincidence, last week also witnessed the latest wrangles over Social Europe (eurocrat speak for EU wide employment regulation). Employment ministers from the member states struck a deal giving temporary agency workers equal rights to permanent staff (in the UK these rights will kick in after 12 weeks with an employer) but at the same time agreed that the UK could continue to allow employees to voluntarily opt out of the existing 48 hour working week limit. (See our press release.) British trade unions, delighted with the move on agency workers, are disappointed with the continued working time op-out. And with several EU countries critical of the UK position on the 48 hour week the TUC will press the European Parliament to push harder on the matter. Indeed, even before the latest deal the TUC was raising the stakes by arguing that the number of Brits working more than 48 hours each week (3.3 million) is starting to rise following several years of gradual decline (see TUC press release).
I have always been a fan of the TUC. It’s not fashionable to say so but the trade unions are generally a force for good in our grossly unequal and power imbalanced market society. But I think the Brothers and Sisters have been consistently wrong on the subject of working time regulation. (See our factsheet on Working hours in the UK.) The continual assertion that the UK has a ‘long-hours culture’, which almost everybody seems to casually accept, is misleading. Sure, we have a relatively high proportion of workaholics by European standards. But we also have relatively high proportions of people working at most other points in the distribution of hours, unlike continental Europeans who tend to be bunched together at around 35-40 hours each week. It’s therefore far more accurate to say that the UK has a ‘mixed hours culture’ – some call it a flexible work ethos, since it suits people who both want and need part-time jobs as well as those who wish to work longer.
It’s true that a lot of people feel they are working all the hours God sends. But this is mainly because commuting times have increased while what we do at work is becoming more pressurised – everyday stresses that are best addressed by still more flexible working opportunities rather than a crude legal limit on the length of the working week which only serves to restrict individual choice. Encouragingly, the average work week has been falling for the past decade (it’s now 32 hours, the shortest in history, which also means we have far more leisure time than ever before). And while there has indeed been a recent slight increase in the number and proportion of people working long hours this too is somewhat misleading.
The past year has been unusual in that eight out of 10 new jobs created have been full-time, while the impact of higher oil and food prices has also encouraged an increasing number of people to take on second jobs (1.2 million now do so). In other words, more of us have started jobs with relatively long hours or decided to moonlight to make ends meet. The TUC is therefore wrong to assert that bosses are suddenly cracking the whip to make staff stay in the office longer. While there are many laudable campaigns to fight in the cause of promoting good work, that over the 48 working week opt-out isn’t one.
Having switched on the television one night last week I was confronted with what must be the most dreaded phrase in current broadcasting: “And now on BBC2, it’s time for Springwatch 2008, with Bill Oddie”. Regrettably, my swift use of the remote control to switch channels only served to transit me from frying pan to fire. This time it was ITV2 and the horror of ‘World’s Got Talent’, a review of the various overseas versions of the franchised light entertainment show which in its British guise features Piers Morgan, Amanda Holden and Simon Cowell judging a bunch of mostly ghastly variety acts under the watchful eye of chirpy Geordie duo Ant and Dec. I’m not sure what’s most depressing, the popularity of this stuff with prime time audiences across the globe or the fact that it rakes in millions for the franchise owners. But either way the show further debases the meaning of the word ‘talent’ which has already been bastardised by politicians and business types in recent years.
Traditionally, talent referred to a person’s innate ability at performing a given task or tasks. A talent might be used for personal profit or the common good but – as espoused in the New Testament ‘parable of the talents’ - there was a clear moral imperative to use it wisely. Every person was deemed to have some talent or other. Some talents were fairly widely spread throughout the populous, others relatively rare. Exceptional talent might bring fame and fortune though it was not necessarily marketable (we’ve all heard of Pavarotti, the planet’s greatest yodeller is less well known). However, it was generally accepted that while a talent could be honed it could not be acquired. Each individual had a well of aptitude from which to draw. All the individual could do was identify their particular talents, develop them and make the most of them – ideally with a helping hand from parents, teachers, and employers. But attempts to conjure up silk purses from sows’ ears were generally seen as futile.
Unfortunately, especially in public policy circles, this traditional notion of talent has gradually been diluted by political rhetoric that confuses talent with the supply of acquired skills. When government ministers talk of ‘unlocking talent’ they more often than not mean policies designed to provide less skilled people with education and training that offers a qualification. In some cases this can indeed help develop and validate people’s innate aptitudes. There is undoubtedly a waste of potential in our society, especially amongst the most disadvantaged who deserve greater opportunity to show what they’re capable of. But mass skill acquisition is not the same as giving vent to genuine talent. Public policy can raise the supply of useable skills and, if effective, add to the flow of observable talent into the market – it can’t easily, if at all, expand the underlying reservoir of talent. Almost everybody who hopes to get a job nowadays will take a training course in how to use Microsoft Office, yet few go on to display the IT equivalent of Hogwarts standard wizardry.
Ironically, the more we try to unlock talent in this rather crude way the harder it becomes to identify and properly manage talent. As more people acquire academic or vocational qualifications the proportion whose acquired skill fits a genuine natural aptitude tends to fall. One can detect this from the observation that the pay gap between higher and lower earners is getting wider within skilled occupations as well as between occupations. This might to some extent be explained by the superior soft skill (itself usually a personality trait) some people display in their jobs but it also suggests that people whose acquired skills are most attuned to their aptitude enjoy a wage premium (particularly in economies such as the UK and the United States where pay rates are more likely to be matched to individual performance). But in a labour market awash with qualifications the genuinely talented are becoming harder to pinpoint by means of a simple scan of those with a given formal skill set – which is why recruiters and managers are eager to develop more acutely attuned talent spotting antennae. (See our research on talent management.)
Organisations must take care, however, that in the rush to share in the understandable vogue for talent acquisition and talent management they don’t fall into the same trap of confusion that ensnares public policy makers. A common error is to simply attach the talent label to existing recruitment and development practice. At best this treats talent as if synonymous with skill and at worst merely uses talent management as a sexier alternative to people management. The successful organisation, by contrast, will be that which knows what talent is and what it isn’t and is able to identify pearls of talent within the increasing mediocrity of formal skill.
Read about how to make HR 'sexier' in The super sexy HR carnival (#35).
Another weekend, another film choice. For my wife and I, this Saturday came down to a toss-up between the just released big screen version of Sex and the City and the new Indiana Jones adventure romp. Being fans of chiselled features, taut sweating muscular bodies, and plenty of energetic action we of course plumped for the New York based chick flick (sorry Harrison but the girls have far more testosterone nowadays). Two hours of Carrie and co devoting their energies mainly to dealing with the ups and downs of relationships proved only mildly entertaining. But our post film conversation sparked the idea of what a similar story set in the real City (London’s financial Square Mile that is) might look like.
For one thing blokes, rather than women, would be the central characters and very much in charge. I use the word ‘bloke’ deliberately since City institutions are not only male dominated but also, despite the considerable ongoing efforts of HR professionals to promote gender equality, remain amongst the most macho and misogynist in the land. (See the Fawcett Society's Sexism in the City report). If an undercurrent of crude sexism were not bad enough things are at times made worse by alcohol fuelled nights visiting strip joints and lap-dancing venues in the name of business. It’s a sorry state of affairs that in our supposedly enlightened times it’s still thought that important financial deals are best brokered in the shadow of a naked fit young woman’s gyrating pelvis. And even more depressing that many women working in the financial services sector are routinely expected to tolerate meeting clients in such surroundings so as to be seen to be just like ‘one of the lads.’
The ‘live hard, play hard’ attitude of the typical City male is of course frequently accompanied by the familiar evening display ritual, which normally involves the forward thrust of a bulging wallet. This unseemly movement has recently been in full swing, so to speak, in the wake of the annual bonus payment season. The first quarter of 2008 saw bonuses totalling £13.2 billion pounds awarded to City workers – not much different to the wedge they received in previous recent years despite the turmoil in financial markets triggered by the credit crunch. However, the script of our tale of boorish excess is finally being rewritten, with salvation on offer in the final scene.
This year’s bonuses are the reward for last year’s effort. Next year is set to be very different as the credit crunch eats into business profits and leads to tens of thousands of City job losses. And the suffering won’t stop there. Senior figures in the finance community reckon the bonus culture is itself a root cause of the current travails in the banking sector. Mervyn King, Governor of the Bank of England, neatly summed things up a few weeks back when he told a committee of MPs: “Banks have come to realise they are paying the price for having designed compensation packages which provide incentives that are not, in the long run, in the interests of the banks.”
It looks therefore as though City workers will in future be trousering less dosh even when the current crunch eases because their bosses and the financial regulators will squeeze them where it hurts to prevent a return to recklessness. Good news indeed. And now that the party’s over hopefully we’ll all work together as a society to ensure that the high living City slickers finally get to settle down and that the financial services sector workplace suits the girls as well as the guys.
Athens, shortly after midnight, Thursday 22 May. I’m in a crowded bar watching the climax of the Champions League final being televised live from Moscow. Tension mounts amongst the mainly red shirted viewers. Ronaldo’s poor penalty kick is saved. Agony. But Chelsea skipper John Terry and then striker Anelka also fail to find the net. Ecstasy. Terry’s all gold as far as Man United fans are concerned (who would also have sympathy for his tears had he not earlier projected the contents of a nostril onto the back of United player Tevez). Making my way from the joyous scene, the Greek capital seemed the ideal place to reflect on the fine line between triumph and tragedy. And my philosophical mood was surprisingly enhanced the following morning when attending, of all things, an HR conference on the seemingly mundane subject of recruitment strategies.
I confess it was not the conference itself that gripped me but the kind gift given to me by the organisers for delivering a presentation. My usual response to a book with a title like ‘Ancient Greece and the Modern Manager’ is to marvel at what publishers can push at a credulous business market. But this one eschewed the nonsense typically spouted by contemporary management gurus in favour of profound quotations from the likes of Plato, Pythagoras and Sophocles.
Aristotle provides my favourite maxim: ‘the middle way is best in all things’. The middle way is often wrongly dismissed as the refuge of the cosy compromiser. In truth the middle way – like the road to Heaven - is the hardest of all routes to follow. For politicians and policy makers it means acting for the common good rather than pandering to material or ideological self-interest. It is this pursuit which distinguishes between true political leadership and the mere exercise of power. And it is the proper benchmark against which to judge the merit of a Government, especially when the going gets tough.
This summer Gordon Brown’s increasingly beleaguered Labour Government stands at a crossroads. Chided from all sides, the prime minister will undoubtedly be tempted to respond to left wing critics in his own party calling for him to shift away from Blairism and strike a more traditional social democratic pose. In my view such a move would be misguided. For all his faults – and don’t we all have them – Tony Blair was a genuine leader prepared if necessary to defy vested interest in order to pursue genuine economic and social advance. While this at times made him deeply unpopular with those he challenged, Blair generally maintained the confidence of the majority of the British public. Mr Brown, by contrast, is fast losing public confidence not, as some contend, because he is failing to spell out a clear new direction for Labour but instead because he seems too ready to ditch the largely successful principles of New Labour in the face of mounting economic and political pressure.
Pragmatism is perfectly acceptable as a tactic within a long-term organisational or political strategy. But it should never become an end in itself. Sudden policy u-turns – such as that on additional rights for temporary agency workers, the details of which have emerged since I discussed the issue in my previous blog – look like attempts at self-preservation rather than the act of sensible and rational government. Mr Brown has at most a year to convince the electorate that his Government has a clear sense of direction and, if he has any sense, by his actions demonstrate that he wants to be the heir to Blair, however galling that might be for him personally and for his political backwoodsmen. It’s probably too late for the Government to avoid the political equivalent of a tense penalty shoot out come the next General Election. But there is still a chance that, once again, red might just outscore blue.
Poor Gordon Brown. If an embarrassing tax policy u-turn and Cherie Blair’s diaries weren’t bad enough, the weekend newspapers contained the revelation that the Prime Minister is an avid Bee Gees fan. According to singer Robin Gibb, Gordon needs a daily dose of the tight-trousered falsetto voiced disco trio to keep him going. I have my doubts about this claim, which seems about as likely as similar stories of Mr Brown’s supposed love of the Arctic Monkeys, Coldplay and rising star diva Leona Lewis. A quick check of the then shadow chancellor’s appearance on Desert Island Discs in 1996 shows a Gaelic version of the 23rd Psalm to be his hippest choice. But no need to let the truth get in the way of a good story – especially with headline writers waiting to see which of Tragedy or Stayin’ Alive best fits the result of this week’s Crewe and Nantwich by-election.
If the poll goes badly the Prime Minister may start to think that his job tenure could prove more temporary than he had hoped for - which might explain the Government’s apparent change of stance on additional statutory rights for agency workers as heralded a few days ago when the draft Queen’s Speech outlining proposals for forthcoming legislation was presented to Parliament. Trade unions and many backbench Labour want to give up to 1.4 million agency staff the same essential terms and conditions of employment as staff employed on permanent contracts. Until now ministers have been reluctant to do so – having also blocked the currently stalled EU Directive on Temporary Agency Workers - in the face of concerted opposition from employers’ organisations who claim that improved rights for agency workers will cost thousands of jobs and harm labour market flexibility. But with domestic political pressure mounting there has clearly been a change of mood.
What remains unclear is how ministers will proceed. Union leaders remain suspicious of an independent commission that would seek a compromise between union aspiration and employer concern. Some less formal way forward may therefore emerge. Either way, however, the key question is what represents fair treatment for agency staff and, in particular, at what point after being hired is it reasonable to expect an employer to offer an agency worker the same terms and conditions as a permanent employee?
Given the often short-term commitment of agency workers to the employer with whom they are placed, plus the fact that agency staff are unlikely to be immediately as experienced and competent in the job as the long-haul employees they join, it is not unreasonable that an employer will consider it fair to treat them differently. But this argument loses force the longer an agency worker remains with a single employer. Logic therefore suggests the need to set a qualifying period after which equal treatment would set in.
The findings of a recent CIPD/KPMG Labour Market Outlook survey indicate that a majority of employers would sign up to a qualifying period of at least six months, though there is evident unease about the possible negative impacts which suggests that the Government should proceed very carefully over this contested terrain in order to avoid giving employers the heebie-jeebies. Worryingly, weekend press reports suggest that a period of just three months is firmly on the cards. A sensible qualifying period, chosen on the basis of evidence and discussion by all interested parties, would improve the position of those agency workers being unfairly treated while posing minimum risk to the jobs market and wider UK economy. But the risks of making the wrong decision must not be overlooked for political convenience.
Phew! After one of the closest ever finishes to a top flight English football season it was with considerable relief that I watched Manchester United deservedly claim yet another Premier League title at the weekend. But the end is also nigh in this year's other tight contest - the fight to secure the United States Democratic Party Presidential nomination.
As things stand it looks at though poetic visionary Barack Obama will edge out fiesty pragmatist Hillary Clinton (who just happens to have a daughter called Chelsea - spooky eh?) and move on to tackle Republican Party nominee John McCain ahead of the November poll to decide who will enter the White House next January. The campaign has already stirred many Americans from a state of political apathy - one reason perhaps being that this could be dubbed the western world's first truly 'diversity Election'.
When it comes to the highest office in the land, voters usually have a number of middle aged white men to choose from. This time around we have a white woman, a black guy and an old bloke in his early seventies. The line up could have been scripted by a quango like our own Equality and Human Rights Commission - though sadly Britain doesn't seem quite so ready to break the political mode in this way.
Sure, we did have a woman prime minister from 1979 to 1990. But this increasingly looks like the exception rather than the start of a new dawn. It's hard to think of a contemporary female politician anywhere close moving into the Downing Street hot seat - and harder to still image a black or asian politician of either gender doing so. And the sad political demise of former Lib Dem leader Sir Menzies ('Ming') Campbell - replaced by a telegenic well spoken youngish white man who looks like a clone of the guy leading the Tories back to credibility - casts doubt on us having a PM close to pension age any time soon.
It may of course be misleading to compare Ming with McCain. The former US Air Force fighter pilot and Vietnam war hero looks robust for his age. Sir Menzies, despite having been an Olympic class athlete in his youth, has the whiff of superannuation about him. Yet you can't help thinking that Ming fell foul of a deeper seated ageism prevalent in British society. (See our resources on age discrimination.)
This is exemplified by the government's timid decision to include a default retirement age of 65 in anti-age discrimination legislation introduced in 2006. Although employers can't retire staff younger than this against their will, and are required to consider requests from those wishing to work beyond 65, there is little meaningful protection against older workers being involuntarily put out to grass. This is wrong and ought to be outlawed, despite the loud protestations of employers' bodies. Removing the default might not be enough to guarantee us an older Prime Minister but would show that Britain is serious about moving to the top of the diversity league table.
'Oh to be in England now that spring is here'. For once the May Bank Holiday lived up to this sentiment, leastways for those like me lucky enough to enjoy some fresh(ish) Home Counties air. But the lure of our green and pleasant land is clearly more than a one weekend wonder – as the half million or so immigrants who cross our borders each year will be the first to tell you – which is why politicians of all persuasions are increasingly engaged in the ‘great immigration debate.’
Last month an esteemed group of peers on the House of Lords Economic Committee – in a seeming endorsement of Conservative Party policy – called for a clear annual limit on net immigrant numbers. The Government – while perhaps unwisely adopting the BNP slogan "British Jobs for British Workers" – disagrees but knows that an open door policy won’t go down very well with patrons of The Dog and Duck. Instead Home Office Minister Liam Byrne has this week rolled out further details of the points based system for managing work related migration from countries outside the European Union.
Coming just days after an IPPR think tank report reckoned the big influx of Poles is drying up and may start to reverse, Mr Byrne’s timing might seem less than perfect. But I think his approach is the right one. There are winners and losers from large scale immigration and while I’m sceptical of the merit of a firm cap on immigrant numbers it seems sensible to only allow entry of people from outside the EU who have specific skills or general abilities not readily available, or that might reasonably be home grown.
Sadly, however, what makes sense for the common good is not always appreciated by employers. I write hot foot from a seminar organised by the independent Migration Advisory Committee (MAC) which is currently analysing the UK labour market to identify labour shortages in skilled occupations that can be sensibly filled by migrants. The MAC’s task is largely technical but it is consulting stakeholders and – along with ministers - is being actively lobbied by employers’ groups asking to be given an easy ride, with the Ethnic Catering Alliance (ECA) amongst the most vociferous.
The ECA argues that 30% of ethic restaurants could go to the wall if the UK removes the welcome mat from Bangladeshi and Chinese chefs and waiters. This strikes me as the worst kind of special pleading. I’m as partial to my Balti and Sweet and Sour as the next man and appreciate that a Pole or Czech version might not be quite the thing. But 1 in 3 Bangladeshi and Chinese men currently living in the UK is not active in the job market, and of those Bangladeshis that are active at least 1 in 10 is unemployed, double the national unemployment rate. Surely an opportunity there for the Curry and Rice trade to train up some home grown talent – assuming that cost cutting is not the primary motive for hiring staff from overseas? And doing so might even give a more positive ethnic spin to talk of ‘British Jobs for British Workers."
As we all know only two things in life are inevitable: death and taxes. Gordon Brown, embroiled in a row over the recent abolition of the 10p starting rate of income tax, is starting to realise that tax policy mistakes can also spell political mortality. It’s a sad irony that a Prime Minister who has done more than any politician in a generation to combat poverty and inequality has been hammered as the result of a tax change - made in 2007 in his last Budget after a decade as Chancellor of the Exchequer – that allows his opponents to portray him as the Sheriff of Nottingham rather than Robin Hood.
Brown clearly miscalculated that low earners losing on the swing of removing the 10p tax band would enjoy a gain on the roundabout of a corresponding 2p cut in the standard income tax rate and improvements in tax credits. He was wrong – about 5.3 million low income tax payers wrong. Having bowed to an understandable rebellion of Labour backbench MPs the Prime Minister has handed over the task of making amends to Alistair Darling – officially Chancellor of the Exchequer but increasingly deserving of the additional title of ‘picker up of the pieces’.
The detail of Mr Darling’s so-called ‘compensation package’ remain sketchy. But employers’ organisations are up in arms that the package might include a hike in the National Minimum Wage, especially for younger workers aged 18-21. I have sympathy with this view – raising the minimum wage to help the Government out of a political fix would set a dangerous precedent. However, I’m opposed to the associated suggestion that in order to prevent such manipulation the minimum wage should in future be up-rated according to some pre-determined formula. Much better to stick with the present system whereby the independent Low Pay Commission recommends by how much the minimum rate should rise in the light of economic circumstances.
Britain should learn from the experience of France’s minimum pay policy. They have an automatic rate setting formula. But governing politicians often override this anyway to gain popularity and there is no strong independent expert body to assess the merit of an over the odds hike. As a result the French minimum wage has contributed to high youth unemployment across the Channel. We must avoid this. Our system works well. UK employers’ bodies and as well as government ministers may want to tinker but both should keep their hands off.
The middle Wednesday of the month and as usual I’m pouring over the latest snapshot of the state of the labour market as provided by the Office for National Statistics. The April figures coincide with an opportunity to chew the cud with the Department of Work and Pensions so, dispensing with my anorak, it’s off to Whitehall for a private sandwich lunch with Stephen Timms MP, Minister of State for Employment and Welfare Reform.
I’ve been having such informal meetings with employment ministers – Conservative as well as Labour - at fairly regular intervals for more than 20 years now. Thankfully I’m not quite old enough to have been involved in public policy discussion in the era when beer accompanied the sandwiches. But my experience does provides a valuable sense of perspective against which to judge the many forecasts of economic doom made in the wake of the ongoing credit crunch. The portents, it is true, are worrying. Although the available official job stats still look healthy, these reflect what was happening at the turn of the year. By contrast the forward focused CIPD/KPMG quarterly Labour Market Outlook (LMO) survey paints a more sombre picture. Yet even so the jobs slowdown likely to hit later this year and next is small potatoes on the recent historical scale. Remember the recessions of the early 1980s and 1990s when tens of thousands of jobs were lost every week and unemployment topped 3 million?
Fingers crossed we won’t see anything remotely similar in the coming months. At present employers are adjusting to tougher conditions by curbing hiring, cutting hours of work and where necessary not renewing temporary contracts. Mass redundancies are currently off the agenda though the LMO survey has indicated that more job cuts are in the pipeline. My fear is that a sudden loss of confidence in economic prospects could still trigger a sudden avalanche like whoosh of lay-offs. I’m hoping this won’t happen – but watch this space.