Thursday, 29 January 2015

Back to the 30s?

In recent months, the government has constantly proclaimed the good news about increasing employment and falling unemployment. If those figures tell the whole story, it would undoubtedly be good news.

However, as I am out and about in my constituency, people keep telling me that it isn’t really like that. They tell me that their experience is of a labour market increasingly characterised by low-pay, insecure work, zero-hours contracts and stagnating wages.

If they are correct, that has massive long-term consequences for the economy, for communities and for families. For instance, even if you are regularly working 40 hours a week, who is going to offer you a mortgage if you have a zero-hours contract? Or, if your work is made up of lots of small contracts, which exclude your employer from national insurance payments, what does that mean for any pension entitlement?

Other statistics suggest that my constituents are right and we need to be worried:

·         Many people can’t get the working hours they want or need. More than 1.3 million people work part-time because they can’t get a full-time job – up 200,000 since 2010.

·         There are now 1.4 million zero-hours contracts in operation, despite the fact that in practice most of these people work regular and predictable hours.

·         In total, there are 3.5 million people in work who say they want extra hours – with an average 12 extra hours wanted a week.

·         There are now 4.9 million workers earning less than the living wage – up 1.5 million since 2009. This is about 1 in 5 people in work.

·         1 in 4 workers on the National Minimum Wage has been in a minimum wage job for five years or more.

·         Real wages for all employees have fallen by more than £1,600 a year since 2010.

·         Because of the increase in low-paid work and stagnating wages, the tax credits budget has increased by £900 million more than planned in the last year alone.

After a decade when we had seen poverty falling, it is now clearly on the increase, with the working poor being particularly hard hit. Is this government intent on taking us back to the 1930s?

Wednesday, 28 January 2015

Whose side are they on?

Last October, I castigated the energy regulator OFGEM for giving approval to price comparison websites which actually hide the best energy deals from the customer.[1]

Despite purporting to give you independent advice on the best deal for you, these websites won’t show you these unless they get paid commission for doing so.

It’s astonishing. It’s a rip-off. How could anyone given the statutory responsibility for acting in consumers’ interests ever believe that that such a practice is reasonable? Only, it appears, if they are pandering to a Conservative-led government and a Liberal Democrat Energy Minister, who are determined to sit on their hands.

Well, blow me down. Ex-Tory MP Matthew Parris has also now woken up to this appalling state of affairs. In his column in The Times[2], he writes:

“Every now and again an event occurs that serves as a parable for where our politics and politicians are going wrong. Because I am a Conservative I’m especially sensitive to stories that show up my own party’s weaknesses.

Here’s one. The story, though infuriating, is in itself minor. But it is indicative. Such things could spell the death of a 21st-century Conservative party.

The question to which Tories are in mortal danger of giving the wrong answer is simple. Whose side are they on? Dishonest and greedy businesses? Or their customers?”

Having satisfied himself that these practices are continuing – although he can’t decide whether it is downright lying or simply disingenuous – he continues

“When I heard about this last year I thought Tory ministers would react not only with anger but an immediate determination to do something about it. I thought so for three reasons.

First — and simply — because it was disgraceful.

Secondly — and for more self-interested reasons — because the Tories have been under pressure from Labour over energy prices……

The third reason for embracing this campaign is important to me. Public understanding of the theory of capitalism is dangerously weak…….

I wish I could report ministers are trying but I cannot………

But if my party is to be what it ought to be — a party for all the people — it must develop and display an instinct for popular economic and commercial justice. Is the instinct even there? This episode makes you wonder.”

Let me put him out of his misery. His Conservative Party will always act, in the very words of Adam Smith which Parris quotes,  “… in a conspiracy against the public, or in some contrivance to raise prices”.  It is their instinct.