Tuesday, July 31, 2007

Trade Union Futures – Wholesome Swedish Meatballs or Pungent French Cheeses?

Or Harrogate's Bettys? For the last week or so I have had a constructive on-line debate with T&G Unite Steward (and “Bewildered LP member of Southampton Itchen CLP”) Iansredblog on trade unions, possible good practice elsewhere in the world and in particular the role of shop stewards.

Now, Ian and I have not had exactly an absolute meeting of minds – although we do have much in common. We both agree upon what is called an “organising approach” in our unions. Where local trade union stewards, activists and regional officers take responsibility for “organising” their members not just “servicing” their needs. Organised branches run by local organisers (stewards) and supported also by regional/national organisers (trade union full time officers) is the “nirvana” of modern day trade unionism.

Instead of just responding to member’s problems you will actively involve members in seeking solutions. A local steward won’t just say to members about an issue “leave it to me I’ll try and sort it out”. She or he would say to members “look if we all got together and did something collectively then we are more likely to get something done”. A “self sustaining workforce” as Ian puts it.

The Labour Party could learn a lot from such an approach, however, since it is not that prominent in that many MBA syllabuses, then perhaps not.

However, what Ian and I have mostly differed upon is what we should all be doing to challenge and change the present agreed “unacceptable” state of modern day British trade unionism (low membership density, participation and influence).

We have debated the role of “struggle” in modern day “class” politics. What is the best model for us in the UK to follow? Do we follow the Scandinavian model of Denmark, Finland and Sweden (80-90%) who have high union density compared with the UK (only 29%) rather than with Southern Europe countries that have even lower union membership than us (France 9%)?

What is the role in Britain of our trade union “political arm” (the Labour Party - discuss)? Is blaming the Party for our failure to organise, just an excuse or is the different legislative approach in Sweden the reason for their “success” (if that is what they have?)

Should British Trade union organisers aim to have the same constructive and long term partnership relationships with employers that they have in Sweden? Or should we have extremely low membership but highly active participation in demos as we have in France? What do you think?

Monday, July 30, 2007

Time to say Goodbye

Finally, after two years of legal argument my estate office was transferred today over to a housing association. There was a ballot of tenants in 2005 where there was a 7 vote majority in favour of the estate transferring from Tower Hamlets Council to a local Housing Association. On Friday tenants opposed to the transfer lost an appeal against a high court decision not to grant a judicial review about alleged irregularities in the original 2005 ballot. Today the paperwork was signed and despite a last minute application to the House of Lords, they refused to stop the transfer. TUPE will apply to all staff

All the local government trade unions are opposed to stock transfer when there is no meaningful choice offered to tenants to remain with the Council. The so-called “4th option”. Ironically, it seems that Councils may now be able to retain their housing stock and even start building again.

All our staff have worked for the council for many years (some their entire working lives) and many are obviously apprehensive about changing employers. Also, there is a lot of good people who are not transferring who we have worked with for a number of years who we will miss. Change, especially when it is forced is always difficult. However, there is obviously “life after transfer” and a number of ex-council (and trade union activists) former colleagues now work apparently very happily for housing associations. Tomorrow we start our induction training.

On Friday I went for a drink and curry with some stewards from work and ran into a group from my “new” employer, also going out for a drink and meal. Good to see they socialise after work – also in recent months I have had a number of "chats" with staff who have heard that I was a trade union activist and were interested in trade unions.

Have to start planning the leaving /joining do! Watch this space!

(above pictures early Labour movement Feminist activists Susan Lawrence, Beatrice Webb and Margaret Bondfield - who each have a block named after them on the estate)

Saturday, July 28, 2007

Fighting the Good Fight in Shadwell – Home of diss-Respect

Went off today with Newham Labour Party comrades to help out in the Shadwell By-Election, Tower Hamlets. One of the Respect Councillors for the ward resigned suddenly a few weeks ago claiming that Respect was “bickering, immature, self serving and militant”. No surprise there then. See action photo of Labour Party activists outside Limehouse DLR station planning campaign activities (middle Denise Jones the current leader of the Council, right is the Candiate, former Labour leader of Council, Michael Keith ).

It was an interesting afternoon. At first we tried to canvass the wealthy blocks near the Limehouse basin. It was really difficult to get in and even once in, many residents were either out or not registered. One particularly nasty Tory supporter threw a right wobbler about us daring to “canvass” his private block and was running around trying to get the site security to get us arrested! I tried to point out that we had been invited in by a resident, but he clearly was off his head. He wasn’t impressed when I then asked him if I could put him down as a Labour "possible". Nearly everyone else we called upon were perfectly okay and polite even if they did not support Labour.

Later we went to more traditional Tower Hamlets estates. See left with Newham Councillor James Butler.
We even met up with the opposition in the form of former Labour councillor and advisor to Ken Livingston turned Bethnal Green and Bow, Respect Parliamentary candidate hopeful Kumar Murshid (big mate of Gorgeous George). Busy like us trying to infiltrate the Shadwell yuppie blocks.

It was quite uneventful, compared to previous recent campaigns; it seems that the gangs of Respect thugs intimidating opposition canvassers were not about. I hear that the price of a wrap is pretty low at the moment, so they must have their work cut out elsewhere.

There was no sign of any Tory or Lib Dem leaflets or canvassers?

Lovely dramatic Shadwell picture.

Thursday, July 26, 2007

Robbing, Thieving Bankers? - Poor Pay More

Think cockney rhyming slang? This starts a bit “off message” but bear with me. Over the weekend I got my bank statement and noticed that I had been charged £1.99 to withdraw money from a cash point machine (ATM) last week (outside University of London Union, Mallet Street) after a Labour Link meeting. Being the son of a Scot (Aberdeen no less) I always avoid ATMs that charge. After seeing the statement I went back to check the cash point. See photos- it is a traditional looking “hole in the wall” ATM which had no warning signs on the machine that it charged for withdrawals. However, if you look closely at the screen you will see in small blue letters against a blue background “This machine will charge £1.99 for link cash withdraw”. If you double click the photo it is clearer. I’ve made a complaint to my bank and will follow this up to get my money back and make sure that there is adequate signage.

The consumer magazine “Which?” has campaigned for fee paying ATMs to be marked very clearly. They suggest that free ones should be painted green and charging ones painted red.

There is a wider issue than just me whinging about losing a couple of quid due to some sharp practice. Ironically the cost of financial services is relatively far more for the poor than for the wealthy.

Banks, building societies and post offices are closing down in less prosperous areas. If you can’t afford to run a car you may have no realistic choice about going to your corner shop to pay to use their ATM.

Not only that, but people who can only afford to buy their electricity or gas by a key meter pay more a unit than if you pay by direct debit.

Compare the horrendous cost of loans from “door to door” home credit companies such as Provident Financial who charge interest rates between “170% to 500%” with that of regular Banks. A loan of £200 paid over 23 weeks would result in £294.40 being paid (497%). I can borrow money from my mortgage provider at 6.9%.

The best rates for savings accounts can often only be found by those with access to the Internet.
This can only be regressive and result in further inequality. In such circumstances it is the role of government to step in and force companies to spread the cost over all customers and provide the same low cost access to loans and savings to the poor as that available to the rich.

The question is how? Any ideas?

Tuesday, July 24, 2007

At last – a Corporate Killing Law?

Yesterday the TUC sent out a press release welcoming a “last minute” compromise between the House of Commons and the House of Lords over this bill. It seems that it will finally become law. Ironically the dispute in Parliament was over the (important) issue of deaths in police and prison custody rather than the main trade union (and Warwick Agreement?) issue that individual company or public sector directors should be held personally liable to prosecution for killing workers by their gross negligence.

The well respected “Campaign for Corporate Accountability” (CCA) is broadly in favour of the bill since they believe (like the TUC) that bill will result in more prosecutions for negligent deaths at work and therefore will deter irresponsible employers. However, I (and many others) am disappointed that it has not gone further. The main problem being is that existing manslaughter laws finds it very difficult to prosecute large public companies and individual directors for negligently killing their workers. Since it is usually very hard in large organisations to prove who is personally responsible for this negligence, unlike in small companies. In small companies it is often clear whose individual negligence resulted in a workers death or serious injury? Such as in this case were a manager was found to have falsified driving records. This bill may make it easier to prosecute big companies but not necessarily those directors who often make (or don't make when they should) the decisions which result in death or serious injury to workers (and/or members of the public). So a large company may be prosecuted for say deliberately underfunding vital safety equipment, but shouldn't the directors who made that decision also be held responsible?

I remember being at a CCA conference a year or two ago when they had a senior Tory MP (true old school one nation Tory – utterly unlike modern day Cameron) on the main panel (sorry I forget his name) who told the conference that he was the director of a number of companies (as they do). He thought it wrong that if he and his fellow directors were found to be fiddling the company out of money then they could face prison. However, if they were negligent about killing their employees then it would be practically impossible to be personally criminally prosecuted.

He thought that this was a disgrace. Quite right too. I think that we must welcome this bill as an improvement to the existing status quo. But we must still continue to campaign for further improvements and make people responsible for their crimes.

Monday, July 23, 2007

Unsung heroes at the modern day coalface – Shop Stewards

Went today for meeting with Idea Store staffside and management reps. Picture of top UNISON stewards, Linda Benzidane and Stephen Murray thinking beforehand of questions (ideas?) to grill managers.

The Idea Store project in Tower Hamlets has gradually merged traditional libraries and life long learning centres. It has been one of the longest reorganisations I have ever been involved with (5 years and still ongoing). The work of local shop stewards is often unrecognised despite being the “meat and drink” of trade unionism. Important items discussed today were revised job descriptions, health and safety risk assessments, communications, unassimilated staff facing possible redundancy and the future of the Idea Store project.

Local stewards bare the brunt of the work, holding down full-time jobs while trying at the same time to do their level best to represent their members.

97% of UNISON members vote to accept pension deal

Just seen copy of the UNISON Press release about the overwhelming majority in favour of accepting the deal on the local government pension scheme negotiated by UNISON and the other local trade unions. Such a massive majority is almost embarrassing. This was also despite (patchy) attempts by some in the ultra left to campaign against acceptance.

However, well done to the negotiators for pulling off a good deal. Not a perfect deal, but at the end of the day in my view a far better result than many expected at the beginning of this dispute. We have an improved and sustainable final salary scheme. The real threat to this deal and to all public sector pensions schemes is from the Tories who continue to promise to “review” (i.e. dismantle and replace with unsafe private schemes) the so-called “gold plated” (as if) public pensions.

Some previous posts on this issue (and here)

The unions need to rethink pensions in the private sector. Pensions need to adapt and change but traditional final salary schemes are not unaffordable, the drive to close such schemes in the private sector has been to cut costs not to do with affordability. Check out Tom’s post on this issue.

Friday, July 20, 2007

Success in Ealing and Sedgefield

Good results
The Labour Party under Brown continues to win by-elections. Despite the attempt by Cameron and the Tories to capture the "centre" ground, Brown continues to park Labour's tanks on this lawn.

Thursday, July 19, 2007

Ealing Southall – the Welsh Connection

Helped out yesterday in Ealing Southall by-election. The local party HQ in Ruskin Hall appears to be shared with the local Communication Workers Union (CWU). So lots of postal strike posters. Inside the hall I noticed on a whiteboard a message saying that 30 canvassers and a mini-bus was expected from Wales on Thursday. It seems like everyone is rallying around. Maggie Cousins from London Regional Board sent us off (via 207 bus) to deliver "targeted messages" to Walpole Ward, from former leader of Ealing Council, Hilary Benn MP praising Virendra Sharma, the Labour Candidate.

It started raining as we got off the bus (not a good start) but soon cleared up and was warm and sunny for the rest of the day. Ended up with a tan. Photo top right is of Dan and Paul from National Labour HQ, John W from West Ham and Robert from South London. By coincidence Dan is a tenant on the estate I manage. The ward was crawling with opposition canvassers, mostly Tory.

Later we went to other temporary Party rooms near the clock tower. Picture below is of John W “power napping” during a well earned tea break.

We did another delivery this time with David Collins (see below left). Who turned out to be a researcher for Ann Jones who is my Mum’s Welsh Assembly Member. Interesting talking about Denbigh politics while pounding the streets of West London.

Local residents have had so many leaflets put through their letter boxes (there are I think 12 candidates?) that for the first time I saw a number of notices on door telling us “no more”.

Joined up with another John from West Ham (below - there were 3 of us West Ham Johns) and Dora Dixon-Flye (London Regional Labour Party Board).

Finished off with delivering huge bright “eve of poll” leaflets so didn’t have a chance of door knocking and really talking to people. However, for once we were given a script for leaflet distribution and encouraged to stop and talk to voters.

If you can help out today - you will be very welcome (and busy). You don't have to be Welsh!

Overall, I thought that the reaction was very positive for Labour. However, I am now always cautious when you have factions playing community politics.

Tuesday, July 17, 2007

London UNISON Labour link – Living Wage, Metronet, Boris, Pensions, Child Labour, BNP, Leadership, Pay, NHS demo, Ealing & Shadwell

Today we had the quarterly committee meeting of London UNISON Labour Link. Each UNISON region has local committees of elected Labour Party levy payers and nominations from self-organised groups (the Labour Link is also known as the APF – Applied Political Fund) who oversee and manage its regional activities. All participants are members of the Labour Party.

The meeting started off with a verbal and written report by London Assembly member, Joanne McCartney. Joanne is very supportive of Labour Link. Good news that Labour had defeated the “Nasty Party” Tories attempt to stop paying a living wage to fire station cleaners (see previous post). But only by a margin of 1 vote (9-8)! This shows what a threat the Tories are in London.

Joanne also reported on the potential collapse of the London tube PFI contractor Metronet . Metronet freely bided to run parts of the London underground but now claim that they cannot afford to do what they promised at the price they had bid. They are facing going into liquidation. Independent arbitrators have rejected their “claim” for another £500 million to carry out their obligations. Tubeline, the other contractor, has not asked for more money and is able to honour their contract. You may say to Metronet “serve them right” (and I do) but if they go into liquidation I assume that their staff will be affected as well as a massive financial headache for Transport for London or the government. Another PFI success story?

Joanne made some perceptive remarks about the probable selection of Boris Johnson as the London Tory candidate for Mayor. She pointed out Boris is actually a traditional right wing Tory. Also, remembering that Hartlepool voted for a monkey as a mayor, we shouldn’t just dismiss Boris as simply a clown and no hoper.

I asked her questions about current Trade Union representation on the £3.7 Billion London Pension Fund Authority Board (think of a big round figure) and on working together with UNISON Capital Stewardship forum, on ensuring that the London Olympics only source from ethical providers (e.g. no child labour making expensive sports clothing for 2012 athletics). Joanne was receptive and said she will raise questions to the Mayor on these subjects.

We have two members of the London Labour Party Regional Board, Rachel Voller and Nicholas Russell, on the committee, who reported back that Ken Clark (well known in East London as a Labour Party organiser) has been appointed as the Regional London Labour Party Director. UNISON and UNITE (T&G) have paid for a full time organiser to fight the BNP in “City and East” constituency for the GLA elections next year (Rob Chapman appointed).

Rachel as the elected London member of National Labour Link Committee gave a full report on recent meetings including an insider account on the recent leadership nominations. The committee were fully supportive of Rachel and the national committee.

The committee also discussed Public sector pay and what we could do to support the demo on the NHS in London on 3 November 2007. We agreed to donate £500 to the parliamentary Ealing by-election and £100 to the Shadwell by-election (we would have loved to donate more but there are strict limits). There was also discussion about possibly increasing the number of consistency development plans in London. Julian Cooke from National Labour Link gave a well received presentation on “promoting and developing Labour Link”. I had to leave early but I think it was agreed to set up a working party to further this work.

Tomorrow I am off with others to Ealing to “fight the good fight” with West Ham TULO and UNISON Labour link. Will let you know how we got on.

Sunday, July 15, 2007

Lyn Brown MP - Alfresco in Canning Town South (& CPA Bigots)

Yesterday I went to help out at Lyn’s latest constituency development event which was held in the brand new Keizan Primary School, Elkington Road E13 (aka as “Tea or coffee mornings”).

The meeting is in Canning Town South ward, which is the only ward in Newham held by the extremist right wing fundamentalist party, the “Christian People Alliance” (CPL).

Ironically the only opposition parties to Labour in Newham are on the one hand the extremist “Shari Socialists” of so-called “Respect” in Green Street West and the fundamentalist Christian bigots in the CPL. Two sides of the same coin as far as I am concerned.

Unfortunately (or perhaps not) the first part of the meeting had to be held outside the school since the caretaker had gone to the wrong school to open up and had the wrong keys. (PFI School – no comment). For the first 30 minutes or so, Lyn and local councillors, Clive Furness and Paul Schafer held open air surgeries outside the schools.

Middle Picture is of top UNISON London Labour Link committee member and West Ham Labour Party Secretary, Alan Griffith, behind bars (no comment).

BTW - One of the CPA Canning Town South Councillors, Simon Ademolake, has been charged with assault on Police following a dispute between him and court bailiffs over unpaid parking tickets. He has apparently denied all the allegations.

I have no knowledge whatsoever about whether Ademolake is guilty or not about assaulting anyone. However I note that he won a civil court case recently over a parking ticket which a Warden was unable to put on his vehicle because he had driven off. A few years ago I represented a UNISON Parking attendant who was nearly killed by a motorist driving off at high speed to avoid having a ticket placed on his windscreen. If you have committed an offence does it really matter if a "ticket" is placed on the vehicle or not? Doesn’t Ademolake realise (or care) that every year Parking Wardens are seriously injured (and no doubt someone will one day will be killed) by people driving off in order to stop a ticket being physically put on their car? Guess not.

Saturday, July 14, 2007

Murder not Divorce? – Labour Party and Trade Unions

It was good to see Tony Woodley (T&G Unite Joint General Secretary) take a well deserved swipe at George Monbiot (photo left - as in extreme) in yesterday’s Guardian. Monbiot, otherwise known as “Moonbat”, is the Stowe public school educated son of a deputy Chair of the Tory Party, who had the cheek in an article on Tuesday, to lecture trade unions on “Class” and affiliation to the Labour Party.

He called trade unions “Turkeys led by chickens, they will never stop voting for Christmas”. He also offensively claims that the unions would still support the Labour Party even if it turned itself into a neo-fascist party!

The “evidence” he presents for this accusation appears to be the appointment of Digby Jones by Brown as a minister promoting trade. I think that this is a wrong decision, however, hardly grounds to disaffiliate.

He confusingly accepts that “some important victories have been won since 1997” e.g. minimum wage, better pension protection etc. But he then dismisses them as unimportant because the so-called “list of defeats” is much longer.

I think that the distain that Monbiot has for such an issue as the living wage is important and gives you an understanding of where he is coming from. If you are brought up in a wealthy middle class family then obviously the issue of low pay is not something that you can relate to in any meaningful way. Unlike trade unionists, who do not usually come from privileged backgrounds. They often have first hand experience of how vitally important the minimum wage is for real families and workers, struggling to keep themselves out of poverty. It is interesting that he also completely ignores tax and pension credits. The huge amount of money that Labour has poured into the pockets of poor people in this way means nothing to him. Obviously more needs to be done, but Monbiot is not concerned about these key working class issues.

Equally the incredible financial stability and relatively high employment rates under Labour is also not apparently of any importance. Neither does he mention the huge resources that a Labour government has pumped into the NHS, schools and children’s services. I have been attacked by some over bringing up this real “class” issue. The argument is that you should only debate the policies not the background of the person. I am sorry but I just cannot agree with this proposition. Attacking the personality of a person is usually wrong but I think politics are personal; they are shaped by your family and your background. I am not saying that middle or upper class people cannot comment on trade union issues. Everyone is entitled to their views, however I would recommend that they stick to what they know – which in Monbiot’ s case would appear to be climate change not trade unions.

Tony Woodley also attacked Monbiot for not proposing any alternative to Labour and ducking the question of whether or not a Tory government was a good thing or not. The RMT and the FBU may have been expelled or left the Party. However, at many Labour Party events I have attended during the last few years there has usually been a “lobby” outside by RMT members leafleting or protesting about various things and asking us to bring up this motion or that. What is the point of them being out of the Party but still turning up to Party events asking for things to be done? As Tony put it “you do not win arguments from the outside”.

It is also a fact that within the Labour Party there is a (small?) body of opinion that would love to end the link between the Party and the unions. They would prefer state funding of parties without any pesky trade unionists making problems.

Now, it is not always sweetness and light in the relationship between trade unions and the Labour party, nor should it be. There are major differences over privatisation, trade union and employment rights etc. When you compare these differences to that between the Tories and trade unions then you realise these differences are small. Trade unions recognise the abyss of Tory rule and also I think many would agree with me that, rightly or wrongly, if the Labour Party is seen to be the “creature” of the trade unions then the Party will never be elected or form another government.

Finally, as Jack Jones, the great leader of the Transport and General Workers' Union said in 1971 when asked to sum up the relationship between unions and the Labour party: He replied that he could imagine "Murder yes, divorce never."

Business wing of Respect selects Candidate in Shadwell

Following Shamim Chowdhury resignation as Respect Councillor for Shadwell, Tower Hamlets, the local SWP/Respect party is now trying to claim that his reasons for resigning are “flimsy” and have implied that he is “dishonourable”, which is a strange word for a Trotskyite Revolutionary Party to use?

The by-election is on 9 August 2007 and as already posted, former Council leader and Shadwell councillor, Michael Keith has been selected as the Labour Party candidate.

Their new Respect candidate is Harun Miah who is an “unknown” Brick Lane businessman. Check out this unsympathetic but probably accurate account of the Respect selection process from workers weekly

“Within a week Respect had called a meeting at its Club Row offices to select Chaudhury’s potential successor. There was little time to waste, since the Shadwell by-election has been arranged for August 9. The meeting on July 10 was packed out, with around 100, overwhelmingly male and Asian, members squeezed into the highly restricted space.

Chair Glyn Robbins (another SWPer) struggled to make himself heard above the noise, as he called for the “best order possible for the meeting”. There were two nominations: young, female activist Sultana Begum backed by the SWP, and middle-aged shopkeeper Harun Miah, who is allied to the businessmen’s wing of Tower Hamlets Respect.

The two were given five minutes each to present their case, and this was followed by questions from members. Begum, a member of two and half years, spoke first, acknowledging that she had been in two minds about standing (I got the impression that the SWP was desperate for her to do so, as it sees real control slipping completely from its grasp). A young, suggestible candidate was what was called for, but, as we shall see, naivety also has its disadvantages.

Begum started by posing the question, “Do we win at any cost or on principles?” - a fair question, given the previous incumbent’s opportunism. Begum said she joined Respect because of its “values”, but unfortunately she could not quite remember what those values were - she was unable to get past the ‘E’ for equality when she tried to remind us what Respect’s initials stood for. She had to content herself with saying, “Muslim values are close to my heart” and expressed the wish that everyone should work together.

Miah, a very new member, said: “Respect is a party of the future”, whose foreign policy he particularly approved of. Nearer to home, he expressed his concern about parking problems, drugs and “other anti-social behaviour”. For the benefit of the elders he then switched to Bengali and finished his speech to loud applause.

In the question and answer session Miah pledged more “social involvement and improvement” and promised to work for “what is good for the community”. Oliur Rahman, the first councillor ever to be elected on a Respect ticket, tried to put Harun on the back foot by stressing the importance of trade unions and asking both candidates to commit themselves to joining a union. Our businessman nominee replied: “I will take his advice to become a member of a trade union - I have no problem with that.” Oli did not know whether to laugh or cry.

In response to a question on the Olympics, Miah said: “I support and welcome it because it will be good for jobs.” The wrong answer and one that did not go down well with a section of members, many of whom booed loudly. He had less trouble with a question from SWP organiser Aysha Ali, who, in another plant aimed at boosting Sultana’s chances, asked the candidates to say something about women’s rights. Neither was capable of going beyond general platitudes.
There was one question that went to the heart of the difficulties faced by Tower Hamlets Respect: “We are struggling in unifying Respect councillors and members. How would the candidates overcome this?” While Begum was once more at sea, Miah was ready with his sound bite: “We need to show each other respect and to retain harmony.”

The voting was chaotic. Voting slips were flying around like confetti, with whole bundles being passed round the room for members to help themselves. Someone complained loudly about foul play, but I do not think there was any cheating. After about 10 minutes the winner was announced - the businessman’s nominee, Harun Miah, had seen off SWP-favoured Sultana Begum by 56 votes to 40”.

The Tories have picked Duncan Crossly and the Lib Dems Rosie Clarke.

Thursday, July 12, 2007

Why the Labour Movement needs to embrace “New Capitalism”.

Back from speaking to East Ham CLP Manor Park and Little Ilford Labour Party wards at the Froud Centre, Newham, London, E12. Spoke about the “Labour Movement and New Capitalism”. It went down pretty well (or they were very polite!). I'm trying to gauge reactions to forming a national Labour Party “Forum” on socially responsible investment and company governance by speaking to branches.

Started off saying that at the end of the talk I hoped to persuade them that they were “New Capitalists”. Then quickly I asked if they were members of pension scheme if so which one, how many have life assurance policies, how many have shares in companies or saving plans that invest in companies? Nearly everyone present raised their hands.

Next I tried to set the scene with some sources and definitions

A lot of what I said is based on research carried out by UNISON and the TUC and that of the book “The New Capitalists” (1) co-authored by David Pitt- Watson and others. David is a leading fund manager and use to be an assistant general secretary of the Labour Party. However, the interpretation (and any errors) is mine.

The online dictionary Encarta defines capitalism. As a “Free market system - an economic system based on the private ownership of the means of production and distribution of goods, characterized by a free competitive market and motivation by profit”.

New Capitalism refers to the fact that “private ownership” element of capitalism has now changed and that today the owners of nearly all British and many international companies are no longer a few wealthy individuals or families, instead they are the many millions of small investors who have pensions, life assurance policies, privatised utility or building society share holdings or collective investments in ISA, PEPS, Unit and Investment Trusts. At least 2/3 of the adult British population have a stake in equities (which is another word for shares). A majority of the shares quoted in the London Stock Exchange is owned by such small investors (1).

My main pension, the Local Government Pension Scheme has 3.5 million members and nationally holds assets worth over £125 billion pounds.

By Labour movement I mean the traditional labour movement family of the trade unions and the Labour Party as well as the Co-operative and other affiliated socialist societies.

New Capitalism is a Labour movement issue not only because of the obvious reason that many of these small investors are trade union members and ordinary working people or pensioners (its our money) but if New Capitalism is not working properly, which I will argue it is not, then this will have a profound negative impact not only on trade union members but also the wider civil and political economy.

For example, my pension fund may be investing my money and that of my fellow trade union members in companies who treat their workforce badly, here or abroad, don’t recognise trade unions and who fail to provide their staff with a healthy or safe workplace. However, at the moment I have no adequate means of addressing this problem. Not in my name, not with my money.

It is also a Labour movement issue that many of the companies we currently invest our money in are badly managed and governed or even some are fraudulent. Instead of creating value for pensioners and investors they can destroy value and threaten the viability of the schemes. For example look at the recent massive corporate failures such as Enron or WorldCom where the life savings of many employees was wiped out, but also of companies who pay over the odds and take over unsuitable companies and lose huge amounts of money. Again how can I assure that the companies my funds invest in on my behalf make sure they are not thieves?

Of course not only is this issue a Labour Movement issue it is also a issue of concern to church and religious groups, many charities and other pressure groups. It is a citizen issue since everyone will be affected and since citizens are the new owners of capital.

If a company that we own decides it is cheaper to pollute the environment in order to maximise short term profits then that is an issue not only for its investors for its workers but potentially everyone in society.

If a company that we invest in deliberately turns a blind eye to its sub-contractors in India using child labour rather than sending them to school in order to make expensive sports shoes cheaply then that is a citizen issue as well as a Labour Movement issue.

I would hope by now people would except that New Capitalism is an important issue for the Labour movement. What I would like to do now is explain what is going wrong and what we can do about it.

What is wrong is that we all might be owners but we are unable to act as owners, unable to unable to carry out our responsibilities of ownership. These responsibilities are actually carried out by a small number of what has been called a small number of “distant and unaccountable players”. Very highly paid Executives, fund managers, international bankers, hedge fund operators and of course a subject that has been in the news a lot lately, Private or is it Pirate Equity?

An American investor once famously remarked that “No-one ever washed a rented car”. Instead of owners taking charge of their companies, we employ (or rent) “managers” to act on our behalf. These managers may have no long term loyalty to the company in exactly the same way as people treat rented cars. We also have shares in this company traded by fund managers who constantly “buy” and “sell” shares. It’s about trading not investing.

Because of this share trading pressure. The chief executives of many of our companies are paid according to often short term priorities rather than long term.

Traditionally because of the lack of effective owner representation on many company boards, we find the Chief Executive often is able to stuff the board with his cronies and favourites which often meant a complete lack of accountability and scrutiny which often resulted in dreadful business decisions been made. Capitalism without owners will fail.

How do we go about changing things? In recent years there have been improvements in governance but not enough. The Labour government has introduced a requirement for all pension schemes to have 50% employee representation. Which is an excellent start? With proper training and support hopefully by the trade unions they should be encouraged to act as owners and ensure that companies that they invest in are properly managed.

Why aren’t insurance companies and other collective investments made to allow independent trade union or citizen representatives on their board? Is it about time to look further into the continental models where staffside representatives are automatically on the boards of all large companies?

Now is there a risk to our pensions and investment if we allow this? Should the only thing that matters to companies being the pursuit of profit?

I would argue that there has been a lot of research that decent well run companies generate more profits in the long run than greedy, destructive and badly runs companies. I think this is commonsense. It has been suggested that 15-20% premium in price and profits where you have sensible governance structures?

The danger to our investments is when we invest in companies where there are no owners taking responsibility.

Will it be bad for the economy if investors start acting as owners and decide to pull out their money from these badly run companies? This question can be answered by going back to what ownership really means. Instead of disinvesting or pulling out your money in bad companies what you should be doing is acting as a responsible owner and turning bad companies into good. In fact arguable you should be looking for bad companies to invest in, so you can change them and make them more profitable in the future.

Finally it important to accept that even the best and pro active “New Capitalism” will not solve all the problems in the world. There is still a vital role for traditional labour movement priorities and activities for achieving equality and social justice.

However, what we should all want is to be effective owners of decent companies will pay good profits, that don’t attack their workers, that recognise and value trade unions, that doesn’t allow kids to work in sweatshops, doesn’t bribe companies or local official (tell that to the British government) and doesn’t overpay their chief executives especially for failure.

(Also in Q&A had a dig at Council for not talking to local UNISON leaders to try and resolve a potentially very serious industrial dispute over the future of the rubbish collection service)

Wednesday, July 11, 2007

Michael Keith to fight Respect By-election for Labour

The former Labour leader of Tower Hamlets Council, Michael Keith (centre red shirt) has been selected to stand for Labour in the Shadwell by-election brought about by the resignation of senior Respect Councillor Shamim Chowdury. Councillor Chowdury resigned after calling Respect Councillors “bickering, immature and self-serving”

In 2005 Michael (seen above with UNISON Labour Link supporters) lost his seat in Shadwell to Respect which he had held since 1994. However, Labour retained overall control of the Council.

Micheal was selected by the local Labour Party by an overwhelming majority.

This by-election on August 9 is seen as a crucial test for Respect. Will they be able to regain the seat after this latest embarrassing resignation?

Monday, July 09, 2007

An Offer You Cannot Refuse - Support the Teamster School Bus drivers

Bit last minute, but UNISON Transport Executive agrees to support the UNISON Capital Stewardship Forum efforts to ask our funds to vote in favour of a motion sponsored by UNITE (TGWU) and US trade union funds on Thursday 12 July 2007.

On Thursday there is the First Group plc annual shareholder conference in Aberdeen. There is a resolution at this conference moved by socially responsible investment funds Domini Social Investments and the Calvert Group, together with 142 Unite (TGWU) members at First Group and 2 other trade union pension funds. They filed the resolution in light of ongoing labour relations concerns, particularly at First Student, Inc., the company’s U.S. subsidiary. At last year’s Annual General Meeting, First Group admitted to anti-union acts. The Board then urged a vote against the shareholder proposal stating that the company was committed to “stamping out anti-union behaviour in the U.S.” and enforcing its own policy of neutrality toward unions.

Despite this commitment, the company has failed to protect workers from intimidation and harassment by U.S. manager’s intent on thwarting workers’ efforts to join a union, as documented in a recent report by three labour rights experts.

Support for the human rights resolution at First Group, plc is critical to protect the interests of investors as First Group expands operations throughout North America and takes on greater operational and financial risk.

Many LGPS funds will invest in First Group. Please let your money managers know that you will be carefully monitoring their vote on Resolution 15 at First Group. The proponents believe that supporting this proposal will send a clear message to management that reducing labour risks and grievances is vital to First Group’s long-term success and sustainability. They urge investors to vote for Resolution 15.

If you can, please write to your fund managers (via your investment committee Chair?) asking them to support Resolution 15 at this AGM. If it is too late then make sure that during the next investment panel meeting you will be questioning the fund managers on how and why they voted on this issue.

Just Say No to Fidelity – Pension money used to fund Tories

Just when you feel that the British Financial Services industry cannot sink any lower in public esteem, we learn that leading investment manager Fidelity is giving the Conservative Party vast amounts of money. Hat trick thingy to Tom at “Capital and Labour”.

In the last 3 years they have made a series of donations worth £320, 000. This is just absolutely disgraceful. Fidelity is the fund manager for a number of Local Authority Pension funds. From the top of my head I think this includes Bromley, Haringey, Norfolk, Ealing, Greenwich and Buckingham County Council. So the profits from trade union LGPS pensioners are being used to subsidise the Conservative Party!

No fund managers should support political parties, it is fundamentally wrong. There is a terrible conflict of interest in Conservative run Councils such as Bromley. How can they be seen to properly employ a fund manager such as Fidelity to run their pension scheme when that fund manager donates huge amounts of money to their political party? I assume that National Conservative party funds were used to pay towards the cost of last year’s Parliament by-election in Bromley? This is potentially corrupt and corrupting.

I can’t find any mention of this financial support for the Tories on the Fidelity website or literature (no doubt it will be hidden somewhere). Their governance statement makes no mention of Political Party funding. If there is nothing wrong with this why don’t they publicise the fact?

The National Association of Pension Funds (NAPF) “Towards Better Corporate Governance” policy which despite being a bit wishy- washy (no comment) makes it clear that they would not normally support donations to Politician Parties. I assume that Fidelity is a business member. There is obviously now a reputational risk of investing in or employing Fidelity.

Pension funds and individual investors (they may also manage your private pension, life assurance or PEP/ISA/unit trust/investment trust) should consider pulling out of Fidelity and transferring funds to other providers if they continue to support the Tories. It is just plain wrong. The arrogance of these people is beyond belief. Write to the administrators of your investment company to see if they use Fidelity. I will be contacting my fellow UNISON member nominated pension trustees and representatives to see what we can do about this.

This is yet another reason why there needs to be real reform of the Local Government Pension Scheme governance and why trained and supported staffside representatives on pension investment panels are desperately needed.

While we are at it here is a link to the American website “Fidelity out of Sudan” which makes some very damaging allegations against Fidelity.

Sunday, July 08, 2007

UNISON Labour Link Forum – Manchester 2007

Busy couple of days, we firstly had apologies from Gordon Brown for not being able to attend (we let him off, he had a baptism of fire with international terrorists and floods), had a new minister of local government, Hazel Blears, as guest speaker, key note speech by our General Secretary, Dave Prentis, Q&A with Labour MEPs and then MPs, workshop on implementing national delegate conference decisions, annual report, debate on Labour Leadership election and motions. There was of course the obligatory UNISON social on the Friday evening where “a good time was had by all”. My red eyes and shaky voice the following morning was down to a horrible common cold and no other possible reason.

The Forum is the annual meeting of elected UNISON Labour Link representatives and was held in the Midland Hotel Manchester city centre. The hotel is actually built on or about the site of the Peterloo Massacre. There was about 150 members present from all over the UK. I haven’t been to Manchester since I was in my 20s, and I was most impressed. I will definitely be coming back for a weekend soon.

Hazel was her usual very impressive self – the four “C’s”, combative, confident, certain and proper working "class". She appears to have shrugged off her defeat in the Deputy Leadership, probably thinks “it’s their loss”. I liked her story about how after she became a young Councillor at Salford (fictional setting for Coronation Street); the Town Clerk (who in those days still used to wear a wig and gown at Council meetings) approached her and said he had a “really important job for her”. She was really excited and thought it would be some significant committee position. However, he then told her “we are refurbishing the member’s room and we would like you to choose the curtains”. She said she was so shocked that she agreed. She pointed out the danger Cameron and the Tories poised at the next election as just being “different”. Regardless of policies there will be a “momentum of change” at the next election which will favour the Tories. Labour has got to be different, not in values but in policies.

I was able to ask her my usual question to new ministers about the Local Government Pension Scheme (LGPS) “governance” issues i.e. why is it that staff are excluded from being represented on their pension schemes. Hazel (as Malcolm Wicks, Stephen Timms and Phil Woolas have responded in the past) admitted that this issue was something that she had not been briefed upon beforehand but suggested that involving staff in their pensions was obviously “a good idea”. We need to speak to her further before she gets nobbled by her civil servants. There is a draft Code of Practice on governance issues out at the moment.

Dave Prentis obviously felt at home at the forum. He was amongst friends. He started off by attacking the BNP, he also had a bit of a dig at the “revolutionary groups” who feed off and take for granted the hard work done by Labour Link in trying to influence MPs. He praised Alan Johnson, for wanting talks to take place over NHS pay within 5 days of him taking over as health secretary, when just 2 weeks ago Brown had told Dave himself that there was no more negotiations over pay. Alan Johnson, even thought we won’t agree with everything he does is someone UNISON can deal with.

Dave went off his speech to respond to Hazel and have a go at the awful governance of many (not all) LGPS schemes. Despite a clear European Union directive that we should have the legal right to 50% representation on these schemes we have none. He pointed out that huge amounts of money in the LGPS is used to provide cheap loans to local authorities instead of being invested for the long term. We will probably need to recruit some 800 UNISON pension reps in the near future to sit on pension schemes.

Dave pointed out that UNISON Labour Link is an integral part of the Union and that as General Secretary he will do everything in his power to promote it.

I spoke on the London motion on the Living Wage, the problems with Co-op and the 4th choice for Housing.

Labour Link is obviously as Dave mentioned a “broad church”. However, despite occasional problems, I felt that pretty much everyone present was genuinely united about promoting the wider Labour movement. All of us have shared values and aspirations and we feel the best way forward to pursue these ideals is via the Labour Party and our affiliated trade union UNISON. Watch this space.

Picture above is of London Delegation - Left to right me, Rachel Voller, Louise Couling, Norma Stephenson (UNISON President), John Gough, Bill Beekoo and Ian Horrigan.

Pictures below of London UNISON members in action Bill, Rachel (left), John Gough and Khi Rafe.