"It's from workers and it should go back to workers"

Check out this post below by UNISON's head of bargaining and Campaigns in Scotland, Dave Watson, on the first day of the Workers Capital Conference which took place yesterday.

Also this YouTube video above by the ITF.

"Workers of the world unite to save your pensions!

Workers pensions across the world are facing similar challenges and we need to learn and act together.

I was at the 2015 Workers Capital Conference today, meeting with union pension negotiators and trustees from across the world. There is great best practice that we need to learn from, but also recognise that funds are invested internationally. We are investing in each other's communities and economies. Pension funds own half of the assets in the world and we should act collectively.

The first session looked at the role of trustees and shareholder activism.

The Californian teachers pension fund had some good advice for union pension trustees. They distilled these into seven effective ways of working.

• No place for fear. Don't be intimidated by the experts and hand over your fiduciary duty to the 'money people'.
• Stay curious. Be inquisitive and don't be afraid to ask questions.
• Be unwaveringly ethical. Remain true to those you represent. Without this funds are vulnerable to manipulation.
• Think objectively. Not enough to know what to do, be ready and willing to share views.
• Work hard. Read the materials, understand best practice. But recognise there is never enough time to do everything.
• Keep focused. Money managers are skilled at distracting trustees.
• Listen first. Speak less and listen more. Intervene at the right moment, don't just follow the money managers.

The Dutch pension fund ABP talked about shareholder activism. Examples included tackling poor labour conditions for textile workers in Bangladesh and Burma. Lack of safety standards and resolving the 'leukaemia dispute' at Samsung. Anti-union practices at Walmart. The latter resulted in four years of work before divesting. Their strategy involves intense dialogue, asking key questions and site visits. Sanctions included voted against directors remuneration and finally divestment, but only when all else fails. All of this is much more robust than the sort of ESG engagement advisors in Scotland pursue.

The U.S. Bakers union have a similar strategy through their capital stewardship programme. Part of their organising department because they see this work as building the union. Companies with good governance perform better, particularly those who treat their workforce fairly. They work with other funds collaboratively to target specific issues and sectors, particularly retail companies. An example of their engagement was the retail firm GAP, promoting a living wage and a good jobs strategy.

While there were different views on priorities, there were some common issues. Infrastructure investment to boost the economy (but not PPP), climate change and workers rights are probably the three main ones and there was support for some broad common goals. Pension funds are long term investors and there was an interesting debate about the pace of change funds should expect from the companies they invest in. Fiduciary duty shouldn't be a barrier to achieving common union goals.

The second session looked at pension fund management and transaction costs. The best approach is the Dutch model who have a level of understanding and transparency that we should aim for. Scottish funds have very little grasp of the true transaction costs of their equity investments. The Dutch now have legislation regulating this approach and this includes an asset management contract that is reducing costs.

Unsurprisingly, commercial asset managers in the UK resist this approach - even those who can do it in The Netherlands, because they have to! There is no good reason for telling us what something costs - if they can't tell you don't buy their services!

We probably only know about one third of the real costs. They are much higher than we think, probably three times higher at least. This matters when pension funds are under financial pressure. When resources are tight we should look closely at costs. It is also a fiduciary duty on trustees to know the true costs of their scheme, so they save contributions, not pay for profits.

Cutting costs is best done by bringing services in house. The top performing LGPS schemes in the UK are largely delivered by in house teams, cutting out the rent seekers. Active fund management is an illusion to fool us into trading that makes huge profits for the asset managers and hedge funds. It was interesting to hear that even New York public pension funds are coming to the same conclusion about active fund management.

The lessons for Scotland are that we should introduce systems that make real costs transparent, bring services in house, and largely get out of active fund management. Another lesson is that size matters and we should pool assets.

A lot of these issues appear complex to the average union trustee. But the value of today's conference is the sharing of information and developing common approaches. There are few more important issues than our member's pensions and there is much to do".

Keir Hardie Centenary Year - Monday 9 Feb 2015 at Westminster Hall

I cannot believe it but I have a clash on the 9th and will not be able to make this celebration of Keir Hardie, the first ever independent Labour MP at Westminster Hall. 

Keir become the MP for West Ham South on 4 July in 1892

Hopefully, someone else from West Ham Labour Party will be able to attend and report back on it.

Hat tip Dave Watson

Open Public Service' agenda: Turning the tide on privatisation using the new UK Public Procurement Regulations fringe #uNDC14

This post is a little late but this was one of the most interesting fringes at UNISON National Conference this year (#uNDC14).

The meeting was chaired by Jane Carolan (2nd from right) UNISON NEC.

First speaker was Dave Watson (2nd from left) who is the Senior UNISON Scotland Policy officer. Dave argued that while the public sector in Scotland is important, a third of the Scottish budget is actually spend on the private and voluntary sector. There has been a Scottish Procurement Reform Act which was intended to be "business friendly".  UNISON had argued for "10 asks" to be in the Act. Not all were agreed but preventing trade union black listers and tax dodging companies bidding for public contracts is in there as is (indirectly) a Scottish living wage.

Dave then gave the best bit of advice on dealing with lawyers that I have ever heard. Don't ask your legal advisers "what is legal position?" Ask instead "this what we intend to do - so can you advise us how to do it".

Former head of the Socialist Health Association (SHA) Richard Bourne (left of photo) was next. He saw  procurement as a "weapon". He didn't see European legislation as being the real enemy since it is fairly liberal. The problem is the Tories. While Councils are quite good at it, health is "crap" at procurement. They tend to be arrogant, not open and transparent and with no accountability. They find it almost impossible to get it right - so challenge. There has been a number of successes.

3rd speaker (see photo middle) was Chris Durnall, who is a top trade union activist, fellow Community Branch Secretary and member of our Service Group Executive. She works for a national Children's charity. Chris reported on the onslaught in our sector of attacks on terms and conditions, reductions in numbers and lower grades. Our members have suffered cuts in pay of up to 40%, Defined benefit pensions are a distant memory and employers treat staff as "costs" not people.

We need a political approach. Commissioners, employers and unions need to work together. We need political and industrial pressure to bring about a living wage and better pay. We need an Ethical care policy with full costs recovery. Move away procurement and return to grant funding and wage councils. A strong union is the best thing we have to protect members.

Matt Dykes (right of picture), Senior policy officer at the TUC was the last speaker. He spoke about "Social Procurement" with agreement about models being used for bids. He wants to see Freedom of Information applied to all with "open book accounting" . All contracted out staff ought to be on NJC (local government) terms and conditions. There is no significant evidence that outsourcing works. There is now a trend for "in-sourcing". We need a Social Value Act. Public opinion is on our side. There is a lot of support within the Labour Party (such as John Trickett MP) but we have to convince their Treasury team that it is value for money.

There was not that much time for a Q&A but I remember Dave Watson explaining that in his experience the cost of a Living wage is cost always exaggerated. In the ones he has been involved in it has only been 1/3 the estimated cost.

Pensioners being ripped off

A good article here on the arguments put forward by "pensions campaigner and former government adviser Dr Ros Altmann" that pensioners who buy "annuities" when they retire are being ripped off.  Annuities are insurance products that you buy when you retire using the money you have saved while at work in a DC (Direct Contribution personal pension) scheme.

"The Financial Services Consumer Panel, which monitors the FCA, recently published a report after a 12-month study into the annuity market. Investigating 15 online firms, and using a £49,950 pension pot example, minus a 25% lump sum, it found fees for the same service went from 0.75% to 3.35%, with costs ranging from £281 to £1255".

Not only fees but annuity "rates" (how much you get after fees) in some companies (even well known ones such as the Pru) are simply rubbish. Even the better schemes offer poor value due to the current price of government bonds called gilts which determine how much you get from annuities.

I am pleased that she highlighted that most annuities are "single life" only. That means unlike Defined benefit pension schemes that cover partners automatically - with a "single life" annuity when the retiree dies - his or her partner get nothing.

In my workplace most employees are in a DC scheme. I dread the day that I will called to see the spouse of a retired union member who wants to know what will they now live on? That day will come very soon.

What was not mentioned is how most people also buy a "level" annuity when they retire. This means  that there is no protection against inflation so each year their pension is worth less and less.

According to this site if you retired 5 years ago inflation would have reduced the value of your level pension by nearly 14%. If you retired 10 years ago by a staggering 30%.

What a mess. Pensioners are being cheated by excessive fees, poor returns and no protection for their loved ones or against inflation.

We still desperately need modern collective Defined Benefit pensions for all.

Hat tip Dave Watson via UNISON Weekly News.

"Breaking the LGPS out of its pre-Maxwell time warp"

Check out UNISON Dave Watson post "I was speaking in a panel debate on governance at a well-attended Scottish Local Government Pension Scheme (LGPS) conference in Edinburgh today.

The LGPS is facing some major changes to governance structures and pension funds are focused on what this means for the existing funds. The essence of my argument was that the LGPS is stuck in a pre-Maxwell time warp.

For those not familiar with the history of pensions governance, Robert Maxwell committed a massive fraud by plundering his employees' pension funds in order to shore up his companies. As a result, pensions law changed to include better member representation on pension funds and a legal separation from the employer.

This has been followed through in European law through the provisions of the IORP Directive. The LGPS is probably the last pension fund to operate with limited member representation and there is no separation from the administering authority.

The pensions committee of Scotland's eleven funds are simply council sub-committees with councillors making the decisions. UNISON believes the current structures are unlawful, but they have to change anyway to comply with the UK Public Service Pensions Act.

A consultation paper that sets out the issues will be published this week. Even more challenging for the current funds is the concept of scheme merger or at least shared services. UNISON has commissioned expert evidence that leads us to believe that larger funds perform better and reduce investment costs.

Paying £millions to the same 'masters of the universe' who created the financial crash, is a particular concern to our members who are suffering the consequences with pay and job cuts.

Interestingly, another presentation at the conference came to a similar conclusion on external fund management costs. In the current financial environment, paying too much to fund managers means even bigger cuts in services.

The same applies to poor investment performance. In addition, we could use the £24bn of assets in the Scottish funds for useful local investment, rather than investing almost half of it abroad.

Strengthening LGPS scheme governance is long overdue and members have a right to have a meaningful say in the decision making process".

"Keir Hardie and moral purpose"

Hat tip Dave Watson

"The Keir Hardie Society held a meeting in Hamilton last night in conjunction with the South Lanarkshire Branch of UNISON. This was the day after Hardie’s birthday. The rooms above the library are excellent and the library service did a fine job with their display on Hardie and his times. A great example of what a public library service can do. This all contributed to a good audience turnout.

The main speaker was to be Jimmy Hood MP, who was like Hardie a Lanarkshire miner. However, sadly Jimmy has taken ill and was in hospital - our best wishes for his recovery. His replacement was Gregg McClymont MP, who before becoming an MP taught modern British history at St Hughes College, Oxford. I have heard Gregg speak on Hardie’s life and times before and he has a detailed understanding of the period and the ability to show the relevance to political debate in Scotland today. The Society’s President, Cathy Jamieson MP added her own contribution, again with contemporary references.

While giving a general overview of the principles that drove Hardie, Gregg gave some focus to one aspect that gets little attention, what Gregg called his Puritanism. Hardie was strongly opposed to drink and gambling and the temperance movement was a strong influence, not only on Hardie, but the early Labour Party. The temperance movement in this period had a strong political edge with campaigns to close outlets and it gave opportunities to develop public speaking and debating skills. Temperance groups also gave equal status to women and Bob Holman speculates in his book that this may well have determined Hardie’s early commitment to female suffrage. In a West of Scotland context, it was one of the few areas where Catholics and Protestants could make common cause.

Gregg pointed out that this was not always an electoral strength to the early Labour Party, but it was important in the development of many Labour movement leaders including Snowden, Henderson and Tom Johnston. Cathy followed up this theme with reference to Hardie’s moral purpose and its relevance to modern politics. In the era of public outrage about tax dodging and bankers bonuses, she argued that people know when something isn’t right and proper. Political parties should reflect that moral stance. A good example, used by both speakers, is the debate over the liberalisation of gambling laws.

I was thinking about these ideas this morning when reading new research by Christian Aid that shows 56% of British adults believe, even legal tax avoidance, by multinational companies is morally wrong. Only 4% thought these practices were fair. Note the use of morally wrong. The public can and do distinguish between conduct that is “just not right” as Cathy Jamieson put it. Gregg later argued that even Margaret Thatcher may not have understood the consequences of unleashing the rapacious free market forces that subsequently brought the economy crashing down.

In this context there may be an opportunity for Labour to reflect a changing public mood by emphasising the moral purpose of socialism. Albeit in a 21st Century context and, I emphasise, this is economic morality not a drive for social conservativism. A good starting point is supporting the Christian Aid ‘Tick for Tax Justice’ petition when the Tax Justice Bus visits your area over the next few months. Keir Hardie would have been with us on the campaign to stop rich tax-dodging companies robbing people in poverty of the vital public services they need".

UNISON Labour Link Forum 2012: Day 2

Saturday was the second (and last) day of this year's Forum in Cardiff. Check out the report on day one here. The traditional Labour Link Social had been held the previous night and "a good time had been had

by all" (it also raised money for UNISON welfare).

Forum started off at 9.15 sharp with a speech by our new UNISON President, Chris Tansley (and life long Labour Party member). Then a presentation on the UNISON Labour Link annual report and review of the year by Chair Steve Warwick and National officers Keith Birch and Julian Cooke.

In the feedback on the recent Local elections in May we heard about the computer tele-canvassing software piloted in London and Eastern region. It was such a success that there are plans to roll out the software to all regions and even possibly for Labour Link volunteers to use from home.  We were also shown the video by Southampton UNISON on how they helped get rid of its anti-union Tory Council in May (I will post when I find it).

Followed by motions on "Impact of the cuts on the Black Community"; "LGBT equality - reality not rhetoric"; Labour & Disabled people" and "The Labour Party and detrimental age discrimination".

Next were seminars on "Police and Crime Commissioners" and "Devolution". I chaired the seminar on "Devolution". Delegates from Wales, Scotland and London (who will not be facing Police Commissioners elections in November) came to together with Welsh Assembly Minister for Europe, Alan Davis (right of picture), Welsh Assembly member (and former MP) Julie Morgan and Dave Watson (UNISON Scottish Organiser and top blogger) to discuss the political impact of devolution on the Party and trade unions.

I said at the start that I was perhaps well qualified to chair this meeting since I was born and bred in Wales to a Welsh mother and Scottish father. I have since lived and worked in Scotland but have now spent most of my life in London (and am now a Councillor in the Peoples Republic of Newham where we have a 61-nil Labour majority).

Alan made the valid point that it was sometimes very frustrating being in a Labour Government in Wales since the UK media are completely obsessed about what is going on in the "SW1 bubble" and it's about time that London recognised that trains go down to Cardiff as well as up to London.  Julie made the very interesting point that this was the first ever meeting she had attended of representatives from Wales, Scotland and London discussing this issue.

Dave pointed out that before devolution he would give evidence to the London Parliament 2/3 times per year on Scottish issues. Now with a Scottish Parliament he is in Holyrood 2/3 times a week! London UNISON Labour Link Political officer, Steve Terry, also spoke about the work we are doing with Labour London Assembly members to hold the Tory Mayor, Boris Johnson to account. Difficult to do of course with someone who doesn't do anything.

After this there was Motions on "Renewable Energy" (another London Regional Motion) and a rule amendment on representation in Labour Link of self organised groups.

The Chair Steve Warwick closed the Forum and hoped that we all got home safety (the weather has been atrocious with floods up and down the country). Due to time limits he declined to accept a vote of thanks to the Chair from Bristol delegates (in joke).

On the way home I did feel reflect on Forum and felt very proud of Wales for not only keeping the faith and returning a Labour Government but also demonstrating "Socialism works" and (most importantly) "it can deliver" (Alan Davies).