A Minimum Wage, A Living Wage or Fair Pay for All?

The introduction of the National Minimum Wage was one of the great successes of the last Labour Government and trade unions such as UNISON who had pushed long and hard for it.

So successful that we now take it a little for granted and forget the huge opposition from the Tories who claimed that it would lead to business failures and mass unemployment.

While a national minimum wage of £6.19 per hour is far, far better than no minimum, it is simply not enough to live on. It is poverty pay. The vast majority of workers on minimum wage will also need to have their wages topped up by the State in housing benefit or family tax credit.  

The idea of a "Living wage" is the amount needed to "let workers lead a decent life". It is currently £7.45ph (and £8.55 ph in London).  Accountancy firm KPMG recently estimated that 20% of workers (5 million) are paid less than a Living wage.

Labour Leader Ed Miliband is in favour of making the Living wage compulsory in the public sector and in their procurement practices. He also believes in naming and shaming other companies that don't pay a living wage.

If this happened it would be a fantastic news for the low paid and also the British tax payers since we will not have to subsidise many poverty pay employers. It would also result in a welcome boast in demand for the British economy.

Yet, at the risk of being churlish, is even a "Living Wage" - not enough?

If you are on a Living wage but become sick and have no income protection you will immediately fall back into poverty. If you retire and have no company pension you will also fall back into poverty in old age. If you are on a Living wage but are on a Zero hour (or Bank) contract and have no employment protection, how can you live a "decent life" with no security? Ed Miliband is also  in favour of restricting Zero Hour Contracts. It has been estimated that there could be as many as one million workers on such contracts. 

What about those traditional low pay sectors which can actually afford to pay more than just a living wage and also pay decent sick pay and a pension?

So what about the concept of "Fair Pay". This is a recognised goal of the International Labour Organisation (ILO). Your pay should not be just about your wage but also about sick pay, holidays, overtime, pensions and employment protection.   There are some private companies competing for public sector contracts who would quite happily pay £7.45 per hour if they did not have to pay for decent sickness protection and pensions.

On the other hand today I met up with my lovely niece, her partner and their young family.  She works as a care assistant in a privately run mental health project. She loves her job but is on the minimum wage and on a zero hour contract. She does not receive holiday pay (which I need to check) and also cannot get family tax credit because she is on a zero hours contract.  She only gets statutory sickness benefits and no pension. Due to her income she is likely not to be eligible to be auto-enrolled into a pension. 

If she was to get a Living wage and an extra £1.26 per hour it would transform her family finances but since she does not know from day to day what hours she will work and has no security of employment, it would still be practically impossible for her to make plans for her future. 

The answer to such poverty pay and conditions is that the next Labour Government must be as brave and as radical on this and other issues as its predecessor in 1945.  While in the long run the best protector of decent pay and conditions are the trade unions. Post 2015 Labour should impose Fair Pay for All.  A living wage, living sickness benefits, living pension and employment security for all. While at the same time introduce binding sectoral bargaining agreements between unions and employers for those sectors which can afford to pay more than a Living wage.

While this will save the Government money by reducing the state subsidy on poverty employers and increasing demand in the economy, it will lets not fool ourselves, cost more, especially in the public sector. This is a price worth paying and will need to be paid for by increases in progressive tax rates on those who can afford to pay more. 

I think to win the next General Election and get rid of the Tories we need to be honest with the public and also offer a genuine alternative. I asked my niece today if she voted in the last General Election. She admitted she didn't. I also asked if she thought the next Labour Government would ensure she would get a Living wage and security in employment would she vote for them? She said Yes. Her current MP is a Tory with a majority of just over 3000.

Hat tip picture to Pay Up Sainsburys.

How we pay for the City (& expensive Red Wine)

I recommend that if you have a funded Pension that you listen to this excellent Radio 4 programme "How You Pay for the City".  

Former fund manager David Pitt- Watson pointed out that excessive charges in the UK compared to  Holland means that the average comparable dutch pension will be 50% more than you would get in the UK.

While the incomparable Mr Colin Meech, UNISON National Officer for Capital Stewardship, thinks that the Local Government Pension Scheme is just being ripped off. He recounted how a colleague who became a fiduciary trustee on a large scheme was shocked to find that the trustee board spent more time being wined (at £100 per bottle!) and dined by fund managers than they spent supervising the scheme. I have heard the same story from that colleague.

It is not just excessive fees by fund managers but also "churn" (excessive buying and selling of stock); stock lending (they lend out your share certificates for a fee), "Custody Banks" (if something is too good to be true...) and "transitional management" (there is a completely shocking story how the Royal Mail Pension fund was cheated and how a judge was told that an untruth was not a lie)

By coincidence we heard similar arguments at the AMNT Summer Conference from Michael Johnson that I posted upon yesterday.

AMNT Summer Newsletter 2013: The Minister, the Researcher, the Polemicist & Red Barry

 Dear Member’s and Friends

The AMNT year so Far

This is our latest email newsletter. 2013 has been an exciting year so far for the AMNT. Our membership has continued to grow. We have made significant contributions to government and regulatory policy on pensions and trusteeship. We have held successful and well attended open meetings and make our presence known by speaking in conferences and writing articles for the pension press.

We have been successful in our fund raising and have now employed an administrator, Kate Bendy, on a part time basis to support the AMNT objectives and our volunteer executive committee.

Pension Minister Steve Webb speaks at AMNT Summer Conference

Picture of our Joint Chair, Janice Turner, with Pension Minister Steve Webb MP, who was the keynote speaker and took part in a Q&A at our Summer Conference, “Where Now The Pension Promise?” on June 26th hosted by Towers Watson.

As well as the minister there was presentation on different pension schemes by members of the AMNT (USS, LGPS & HSBC).

Ewan McGaughey, a researcher from the London School of Economics, described the AMNT as “unique” and “the most important development in Pension Governance in 50 years”! While the ever so quiet and retiring Michael Johnson, research fellow at the Centre for Policy Studies (CPS), gave a well received “Trustees: take no prisoners” speech on “Charging in Pensions”.

All the speeches are now on the AMNT website here

There was also a showing of the new AMNT DC and Auto-enrolment video kindly developed with Barings Asset Manager.

The Anonymous Trustee Question?

Each newsletter we are planning to allow a MNT to post a question on a current issue – if you have an answer for this question then do so on the AMNT LinkedIn site or email mail@amnt.org

“The Final Salary scheme of which I am a Member Trustee has gathered up people from various prior schemes and has endeavoured to match the pension terms that each member had before. So, we have several different ages from which the member may retire without actuarial reduction, many well before their 65th birthday. Trustee consent is required for these early retirements.

This is inevitably quite a large cost to the scheme. We have recently had an actuarial valuation and the sponsoring employer wants the trustees to agree never to consent to these requests for early retirement on these terms, so that this cost may be omitted from the valuation. The trustees have never refused a request for early retirement in the past and indeed have formerly been directed by the sponsoring employer not to do so”.

Has this happened to other pension schemes? What did you do?

Encourage your fellow Member Nominated Trustees (or representatives) to Join the AMNT

Even in this social media world of Facebook, twitter and blogs, by far the best way to recruit someone is still by word of mouth, one to one. So if your fellow MNTs in your scheme are not yet members of the AMNT, please point out the benefits and ask them to join! Check out our revamped website here

Driving down investment charges

An AMNT member wants to do something about investment charges and to see whether we can't drive down charges - or at least reach acceptable standards - for our investments. The concept is that perhaps we may be able to guide members as to what a reasonable charge rate might be for certain asset class investments and not only that but perhaps have more confidence in using more challenging forms of contract - risk reward and so forth.

This is a big subject and it would be very helpful if we could identify a set of AMNT members willing to share some knowledge regarding their experiences on costs and contracts. If you are interested and can help please email mail@amnt.org

£179m of Equitable Life payments owed

The Equitable Life Payment Scheme is asking company pension fund trustees and administrators for their help to make payments of £179 million to their members. Members of the pension scheme that you act for may lose out if you do not take action. 547,000 scheme members are due a payment of 22.4% of their relative financial loss suffered as a result of UK Government maladministration in the regulation of Equitable Life.

As Equitable Life did not hold the addresses for nearly 500,000 company pension scheme members, the Scheme is asking trustees, administrators or authorised representatives of pension schemes that invested in Equitable Life between 1992 and 2000 to share their members’ addresses.

The Payment Scheme has made good progress with most company pension schemes and has received data sharing agreements covering over 400,000 of their members who are due payments of £115 million. This represents 73% of the 547,000 members who are due a payment.

The Payment Scheme is now urging the remaining company pension schemes to return data sharing agreements as soon as possible. Once this is completed, they can provide members’ addresses so the Payment Scheme can write directly to their members to start the payment process.

A list of the company pension schemes that the Payment Scheme has been unable to trace is on the Scheme’s website. Individual members of these schemes can call the Payment Scheme’s policy checker service on 0300 0200 150 to check whether their policies are eligible and find out the next steps to take.

Pension Trustees Circle Seminar

This will take place on Sunday-Monday 29-30 September at The Majestic Hotel, Harrogate. There are currently 2 Pension Trustees Circle (PTC) events in the South East – this will be the first meeting in Northern England. The PTC is for chairs of pension schemes or experienced trustees in pension funds with a minimum of £100m and it is free to attend. In addition, to celebrate the inaugural PTC North meeting and encourage attendance, the organisers are providing free accommodation for approved trustees. if you would like to apply for a place please contact Liz Doughty – liz@spsconferences.com

PMI Qualification in Trusteeship

The AMNT have been researching the possibility of organising training and the exam for the PMI certificate in trusteeship.

We would like to hear from any of our members that would be interested in the training and sitting the exam. If we have enough interest then we will explore setting up the training and the exam. To register your interest please email mail@amnt.org

Dates for the diary – Thursday 26^th September 2013!

Next AMNT open meeting scheduled to be held at Pensions Corporation, London on Thursday September 26th. Further details to follow. We are also planning an event to take place in the House of Commons in November.

Defined Benefit Defence Pack

The latest version of the pack is being updated and we hope to be able to announce a re-launch date soon. In the meanwhile if any AMNT members need advice or support on proposed closures please email DB Working Group Chair, John Gray, (in confidence) at mail@amnt.org

Finally....

Picture (bottom right) of our other Vice Chair of the AMNT, “Red” Barry Parr, on front cover of July 2013 “Pensions Insight” magazine (Shome mishtake, shurely? Ed)

Editor: AMNT Executive member John Gray

UNISON Save our NHS March and Rally Sunday 29 September

Save our NHS

Lobby of the Conservative Party Conference in Manchester
Saturday 29 September

Say No to Austerity
Defend Jobs and Services

Supporters of the National Health Service and all those who want to defend jobs, services and a decent welfare state will be marching in Manchester to deliver a clear message to Conservative Party Conference that we mean to Save Our NHS from cuts and privatisation.

A march and rally have been called by the North West TUC, backed by UNISON, other unions and NHS campaign groups. They'll be assembling at Liverpool Road (M3 4FP) from 11am, and marching to a rally in Whitworth Park.

The protest will highlight the impact of huge job losses and spending cuts across the health service, as well as the rapid sell-off of the most lucrative parts of the NHS to private healthcare companies - many of whom like Circle are also Conservative Party donors.

The event will also raise concerns about the wider effect that government economic policies are having upon communities across the UK.

Getting there:

Coaches to Manchester are being laid on by London branches. Will send details nearer the time.

Get Involved:
Poster
Sign up to the Facebook event
Add a twibbon or badge to your facebook page or twitter profile
Sign the e-petition

Tweet#NHS999

(hat tip my Housing Association branch e-newsletter)

Vote Jason Anderson for UNISON London National Labour Link

The ballot paper arrived this morning at my home address and I have already voted for Jason Anderson as the London representative on National Labour Link Committee. Jason works shifts providing front line emergency aid to the public for the London Ambulance Service (LAS) and will make a great rep for UNISON members in London.

He is also a committed health and safety rep and experienced trade union steward. Please encourage Labour Link members to support him.

436,000 reasons why we need employee reps on Housing Association Boards

Last Friday Inside Housing magazine disclosed that the former CEO of the so called "not for profit" Housing Association "Places for People" received a total pay off of £436,000 when he recently retired (voluntary).

Because of this the Housing Regulator has downgraded the Association due to "governance concerns" and 3 board members have resigned.

Frankly, this response is grossly inadequate and appears to be mere hand wringing. This is not just an isolated cock up but indicative of a wider malaise. The impression given is that some large Housing Associations are run by some unaccountable, self perpetuating mates club. Solely concerned with enriching themselves from their residents, clients and of course, the public purse.

So what can be done to reverse this? There are vague calls for "restraint" but come on - do turkey's votes for Christmas? Will Hutton in his 2011 report on Fair Pay recommended there should be employee reps on public sector boards especially the remuneration committees (who decide pay). Such organisations should also publish the multiples between the lowest paid and the highest paid. Personally I believe we also need far more independent resident and client reps on all boards.

I had a quick look at the "Places for Executive Profit" website tonight and noticed an advert for an estate cleaner in Sleaford, Lincolnshire for £6.33 per hour (for a whole one hour per week!). This is  poverty pay and only 2p per hour above the uprated national minimum wage. I work it out that the CEO got pro rota 35 times as much as the cleaner that year. I suspect that office cleaning is outsourced. I wonder how much the worker who cleans the CEO office receives?

Why can't employee reps sit on all Boards? They sit with management on joint safety committees where they take decisions on the lives of workers and residents? They have employee reps on  pension committees where they decide on investing millions of pounds.  So why not on Boards and especially remuneration committees? In other arguably more successful countries than the UK this is just considered the norm? Employee representatives will be a brake on greed and corruption.

Unless Housing Associations clean up their act then I don't think there is a long term future for the sector. There has been a lot of genuine fuss and bother today about 30 staff at 14 foreign aid voluntary organisations being paid more than £100k per year. While I share this concern this is just small beer compared to the huge amounts paid in executive pay in most Housing Associations.

Why Eric Pickles is an eejit

Guest post by our Edinburgh Correspondent  shows why Eric Pickles proposal to allow 15 minutes parking on double yellow lines is a really bad idea.

"At about 18:25 last Sunday 4th August I left Maxies Bistro and emerged onto Victoria Terrace. I soon became aware of an open-topped tour bus stopped below in West Bow. The driver was headed from Grassmarket for George IV Bridge, but could not get round the bend into Victoria Street.

Someone had parked a car on the double yellow lines on the off side of the bus. Much consternation and discussion of what to do about it. Eventually 10 concerned citizens grabbed hold of a perfectly reasonably parked car on the near side and moved it. Two Lothian buses inspectors appeared and carefully avoided getting involved in that.

The 10 concerned citizens then crossed the road and moved the obstruction. Tourist bus departed and one person wrote an abusive message on the back window of the former obstruction".

Bling your Bike at Queen Elizabeth Olympic Park

Today I went to Queen Elizabeth Olympic Park in Stratford to watch the start of the professional riders taking part in the Prudential 100 mile cycle race.

I was hoping to pick up some tips to help me with my Ken Biking in Central London. After the start of the race I went to the stalls in the Park where you could cycle for free smoothie drinks; try out weird bikes and find out how to "pimp up your ride".

The Olympic Park is now open (in part) to the public for free and it is just a fantastic asset to East London. There are great facilities for families, especially those with young children.  I must admit that I did think that it was noticeable that there were relatively few Black and Ethnic minority families in the Park today?

I wonder how many of my (West Ham Ward Councillor) constituents were there? I will contact the Park to see if they know. We don't want the Park to turn into some sort of privileged white middle class ghetto. It should be open to all.

Years ago I use to cycle/run into work through this area when it was probably the most grotty and ugly industrial estate in London. How things change.

How to Solve the Recession: End Prohibition and Tax Drugs?

I listened this morning to "From our own Correspondent" on BBC Radio 4. One report was from Uruguay where they are considering legalising drugs. The main reason given for this was to put out of business violent drug gangs.

I remember being at a pension meeting a few months ago where we received a briefing from an economics adviser on the financial outlook. It was pretty bleak with the prospect of years of little or low growth, demand or investment and continuing cuts in public expenditure. The adviser broadly supported current government policy.

I said there is always an alternative economic policy and why couldn't the UK do what governments did before the second world war - borrow money and invest into massive infrastructure projects to pump prime the economy out of recession?

The adviser made an interesting but provocative response. He said that many people who look to the massive state investments during the New Deal economic programme in 1930's America as an example of what we should be doing now miss an important point. This huge investment was largely fully funded and not borrowed. It was paid for by the ending of the prohibition on alcohol in America, which led to increases in taxation, which paid for the New Deal investment.

While I do not accept all his arguments it did bring the question to the fore that should we in Britain legalise and heavily tax drugs in this country to bring in enough Government revenue to pay off the national debt and invest to bring about recovery?

Since we were at a pension trustee meeting, sadly it was decided that such matters were not really within our remit and we continued to discuss the normal "boring but important stuff" such as valuations, fund manager reports etc. 

I have for many years been convinced that we have lost the war on drugs and we should consider legalising them to get rid of the violent drug gangs. There will still have to be safeguards and it will have risks but if by ending this prohibition and then heavily taxing drugs, we can bring about the end of this recession, is this not yet another powerful reason to at least consider it?

Personal views as always. Photo of anti-prohibition pro-Beer Tax parade in 1930's USA.

West Ham Ward Cable Car Beano

Off message a little but just to prove that not all Labour Party events take place in dusty meeting rooms or involve knocking on doors with clip boards. 

We normally hold our Party ward (or branch) meetings the first Thursday of the month. This month we decided to hold a summer social event instead and take the Emirates Cable Car which goes across the river Thames to Greenwich. 

We met at the new Abbey Road Docklands Light Railway station which is just outside our ward.  While waiting for others to join us, we had a quick tour of the nearby magnificent Abbey Gardens. 

By 7pm 10 of us had turned up (including comrades from Plaistow North ward). I was stopped on the station platform by 2 tourists who asked me where "The Beatles" Zebra crossing was? I had to tell them that they were at the wrong Abbey Road and the one they want is near St Johns Wood station. This is quite a common mistake here. I was also once stopped by an American tourist at Stratford station who asked which way was it to "Shakespeare house"?

The nearest station for the cable car was Royal Victoria. The Dock and the Cable station was extremely impressive. Only £3.20 one way. Cabins normally took 10 people but it was a bit windy so we were restricted to 6. There was no queue and you just walked onto the cabin. 

I have never been on this ride before. Our oldest ward member 84 year old Gerry had never been in a cable car before in his life! The view during the journey over Newham and East London was superb. Visibility was excellent. At Greenwich we had a few drinks, missed the last Cable Car back (9pm) then took a train on the Jubilee line to Stratford, then off to the Jamie Oliver Restaurant at Westfield shopping centre for a late meal and lots of hot air putting the world to rights. It was a good evening.