A Quick Note by Gregor Gall, professor of industrial relations, University of Bradford
It has become evident that the referendum on 23 June this year is a referendum on whether Britain’s membership of the European Union should be maintained regardless of the deal David Cameron struck with the EU member countries on 19 February 2016 (on freezing on in-work benefits for EU citizens working in Britain; stopping all payments of child benefit going to children living outside Britain; safeguarding to protect countries outside the eurozone against regulation made by those inside it; and not being covered by deeper EU integration). This is, therefore, not the referendum Cameron intended to have. He sought to narrow the referendum question posed by the terms of his agreement. As such, the questions facing unions and their members are even more profound and searching than could have been expected. Boycotting, active abstention or not taking a position (as some unions did in the Scottish independence referendum) are not then quite so credible options in this referendum as the contours of the debate are clearly only about ‘in’ or ‘out’ per se with the choice faced being one of working out which is the least worst option.
The Quick Note is available to read here JRFEuropequicknote
Agenda for MSP Action
The Jimmy Reid Foundation (JRF) has published its ‘Agenda for Action’ highlighting seven areas requiring the immediate attention of the newly elected Members of the Scottish Parliament. Drawing on JRF publications, independent research and events, the recommendations cover workers’ rights, human rights, developing Scotland’s ports, the fiscal settlement, and getting better data to make informed decisions to grow our overseas trade and the economy.
Professor Gregor Gall, Director of the Foundation said today “As the newly elected Scottish Parliament gets down to business with a minority SNP government, we are providing a list of seven urgent actions that should inform internal and cross party discussions. We are determined that our research makes a positive impact and is not ignored despite the uncomfortable and disturbing issues that the independent research has revealed. Policy and services must be improved in Scotland using evidence based research.”
The seven issues are:
1. The UK Trade Union Act should not be implemented in Scotland.
We call upon the Scottish Government to give a pledge that where it is the direct employer, it will not seek to enforce the new balloting mandate thresholds or the new picketing requirements; it will agree to the extension of balloting mandates; it will support measures to introduce e-balloting; and it will agree to notice of action remaining at one week. We also call upon the Scottish Government to use its influence with those public bodies which it directly funds to do the same.
2. Economic and Industrial Democracy
Currently, both Scotland and Britain are in the bottom half of the European league table for democracy at work. The Foundation does not believe the Fair Work Convention’s ‘Fair Work Framework’ will drastically change this situation because it has no statutory underpinning. The Scottish Government should adopt a strategy which gives workers the means to control their work and working lives which will then enable the economy to thrive.
3. The Fair Work Convention
The Scottish Government established the Fair Work Convention in order to engage in a limited form of social partnership with unions and employers. The Convention has published the framework document by which it hopes to facilitate this social partnership. Many legislative powers relevant to the FWF are reserved to Westminster but the Scottish Government can use its limited devolved powers to make an impact.
4. Scottish Government’s Block Grant
The Scottish Government’s block grant (BG) has been adjusted now that the fiscal settlement has been agreed to cover Scotland’s increased devolved powers from Westminster via the Scotland Act 2016. The negotiating processes for the fiscal settlement have resulted in a poor deal for Scotland and that needs to be fixed.
5. Soundly Based, Timely Statistics are Essential for Economic Growth
Two problems remain to be addressed if the Scottish Government is to increase competitiveness, tackle inequality and move onto a more balanced growth path which better withstands global economic shocks: decide if the current management of trade support agencies is likely to achieve the objectives of the Scottish Government’s economic strategy; whether the quality of the databases available, the most fundamental tool by which to judge performance, are up to the task in hand.
6. Scottish Ports
Scotland’s major ports are inadequate, outdated, and expensive. Freight traffic moving through Iceland, Ireland and Flemish ports is far greater than in Scotland despite our economic growth depending on trade expanding. The Scottish Government must act to enable our economy to benefit from direct access to international markets via advanced, low-cost ports in Scotland and related shipping services.
7. Human Rights
The Scottish Government should give effect to its high level commitments on human rights by changing the framework for respecting, protecting and fulfilling human rights. That includes establishing a Human Rights Committee at the Scottish Parliament and amending the law to enable the Scottish Human Rights Commission to take ‘test cases’.
The full document is available Agenda for Action May 2016
In a new ‘Quick Note’ for the Jimmy Reid Foundation, the recent announcement (21 March) of the ‘Fair Work Framework’ is critiqued. The Framework is the first major publication of the Fair Work Convention which was established by the SNP Scottish Government in 2015. The critique by Gregor Gall, professor of industrial relations at the University of Bradford, shows that while the Framework has laudable aims it is completely woeful in providing the mechanisms by which to achieve these aims. Professor Gall, thus, concludes that the Framework fails at the first hurdle. Professor Gall will launch the critique at a lunchtime fringe meeting at the STUC Congress in Dundee this Monday 18 April.
The Fair Work Framework states its vision is that ‘by 2025, people in Scotland will have a world-leading working life where fair work drives success, wellbeing and prosperity for individuals, businesses, organisations and society’ with the fair work being defined as that which ‘offers effective voice, opportunity, security, fulfilment and respect; that balances the rights and responsibilities of employers and workers and that can generate benefits for individuals, organisations and society’.
So the Framework is strong on aspiration but entirely woeful on the means of delivering these aspirations because the Scottish Government refuses to contemplate using its existing and future legal powers to compel employers to achieve the aims in their workplaces. In other words, the Framework is an entirely voluntary affair like other initiatives of the Scottish Government (like the Scottish Business Pledge).
The critique for the Jimmy Reid Foundation suggests that not only could the SNP Scottish Government’s considerable power through procurement be used but that the Scottish Government abdicates responsibility for its own Framework by ruling out having an accreditation system (like the independent living wage system has) for employers seeking to implement the Framework’s aims or periodic reviews of progress made towards attaining those aims.
Professor Gall commented: ‘Given that the Scottish Government is intent upon pursuing a voluntarist approach to achieving ‘fair work’, it should at least commit to periodic assessments of its plan. And because the Scottish Government is the employer or awarder of contracts through procurement, it should specify a contract of rights for workers to attain the aims of the Framework. Ultimately, the Scottish Government must undertakes steps to put on a statutory footing the institutional mechanisms for achieving the aims of its Framework. Otherwise, it will not be worth the paper it is written upon’.
The critique of the Fair Work Framework is here FWCframework and a recent paper for the Jimmy Reid Foundation on achieving industry democracy using an array of means which including statutory powers can be found at http://reidfoundation.org/the-library/
‘The economic benefits of public sector provision’ is the title of a new report commissioned by the RMT union into life-line ferry services in the Clyde and Hebrides. Written by Jeanette Findlay, University of Glasgow, the report examines the relative merits of the private and public sector bidders in retendering process in relation to the fulfilment of the contract itself and other elements which have an economic value to the island economies and to the Scottish economy. This is done in the context of the Ferries Plan 2013-22 of the Scottish Government. The report notes that the dangers identified in the competitive tendering process since 2005 still pertain including those of ‘moral hazard’ and ‘the Principal Agent’ while observing CalMac Ferries Ltd has operated in an efficient, innovative and strategic way in the conduct of the contract and has shared with the Scottish Government all the benefits of cost savings. Meanwhile, Serco has an extremely troubled history in relation to its public sector contracts; it has no significant experience in the maritime industry and its financial health and business model raise concerns in relation to any unforeseen aspect of the current contract as it proceeds. CalMac has employment policies and values which are fully in line with Scottish Government thinking in these matters.
The full report can be read at http://www.rmt.org.uk/news/new-report-reinforces-case-for-keeping-calmac-public/
The European and External Relations Committee of the Scottish Parliament launched a ‘Human Rights Inquiry’ in 2015 to which the JRF made a submission. The Inquiry has now concluded and Carole Ewart has written a Blog on the Committee’s letter to the UK Government and what steps the Scottish Government and Scottish Parliament can take to respect, protect and fulfill human rights. Carole has written two policy papers on human rights for the JRF and is a Project Board Member. The Blog can be found on the Glasgow University Policy Scotland website at http://policyscotland.gla.ac.uk/human-rights-inquiry-concludes-with-rights-on-message-for-scotland/
Today the Jimmy Reid Foundation publishes a new policy paper on why Scotland must do better to respect, protect and fulfil human rights across devolved functions. Publication coincides with Alex Neil, Cabinet Secretary for Social Justice, Communities and Pensioners’ Rights giving evidence to the European and External Relations Committee of the Scottish Parliament as it concludes its ‘Human Rights Inquiry’.
Human rights are under attack from the UK Government which is threatening to abolish the Human Rights Act (HRA), possibly withdraw from the European Convention on Human Rights (ECHR) and introduce a British Bill of Rights. Although the Scottish Government explicitly supports the HRA and the ECHR, the real problem remains the failure of ‘duty bearers’ ie the public sector and those providing services of a public nature, to comply with existing human rights obligations. Fixing that problem should occupy the political energy and practical action of our elected politicians with a consequent gain of the public understanding that human rights are relevant and powerful in making our lives better, and Scotland fairer. A YouGov poll for the Scottish Government in 2015 confirmed the difficulties in perception with one in five Scots saying human rights are for minority groups only and two in five Scots saying they have no bearing on their everyday life.
Carole Ewart who wrote the Paper pointed out that
“Applying human rights equally and fairly can address urgent issues including poverty, poor care for elderly people and unfair employment practices. Scotland must now take deliberate, concrete and measurable steps to comply with existing human rights law, address the reputational damage which has led to people regarding human rights as weak, owned by a minority and of little relevance, and focus on enforcement action which makes Scotland a model of best practice.
“Although human rights are to be included in the National Performance Framework, there is a fear that it will fail to deliver a prompt impact, and promises to consult on extending out list of human rights will serve as a distraction from the main problem of delivery and delay positive action further.”
The paper argues that in the longer term consulting the people of Scotland on what further rights they would like to see enforceable in domestic courts in very welcome particularly on economic and social rights. Thus far a Bill of Rights has been hijacked as a tactic to constrain human rights by the UK Government whereas in other countries a Bill of Rights is regarded as a positive vehicle to mainstream and enforce human rights and we can learn from such experiences eg from the State of Victoria in Australia. The paper concludes with four recommendations which can be enacted now and after the May Holyrood elections:
1. The Scottish Government should entrench its commitment to human rights by proactively ensuring that our 10,000 + public services in Scotland fulfil their existing obligations to comply with the ECHR as well as international law. The model of the Charter of Rights in the State of Victoria, Australia, should be considered.
2. The Scottish Parliament should entrench its commitment to human rights by setting up a Human Rights Committee to provide scrutiny of all Bills, inquiries etc. and ensures a focus on the impact on our human rights. In particular the current human rights inquiry being undertaken by the European and External Affairs Committee should focus on duty bearers’ compliance with existing human rights obligations which are 18 years old.
3. The Scottish Human Rights Commission (SHRC) consulted on, designed and established the framework for Scotland’s National Action Plan on Human Rights (SNAP). Whilst a welcome development, and after two years of delivery, it is time to change the delivery mode from persuasive to compulsion supported by funding.
4. The Scottish Parliament elections in May 2016 provide an excellent opportunity to focus on human rights delivery in Scotland with each party setting out specific commitments in its manifesto. Those commitments should include: agreement to improve human rights protection regardless of what the UK government decides on the future of the Human Rights Act and the European Convention on Human Rights; a public consultation on what human rights should be added to those which are currently enforceable in Scottish domestic courts; as a priority in May 2016, the elected Scottish government should require public authorities in Scotland to explicitly promote and comply with existing human rights law via regulations or legislation.
The Policy Paper is available here Human Rights 1 March
The agenda and papers for the European and External Relations Committee meeting on 3rd March can be found at http://www.scottish.parliament.uk/S4_EuropeanandExternalRelationsCommittee/Meeting%20Papers/EERC_Public_papers_3_March_2016.pdf
The Trade Union Bill will shortly become law. It will undermine workers’ rights and enhance the power and control of managers and employers. But even without it, workers in their workplaces still continue to experience a fundamental lack of democracy and control at work. Currently, Scotland and Britain are in the bottom half of the European league table for democracy at work. This timely new report for the Foundation analyses the contours of this present lamentable situation and outlines a number of proposals to give workers the means to control their work and working lives.
It is called ‘Rights and Respect: a vision for democracy in the workplace’ and is written by Gregor Gall, Professor of Industrial Relations at the University of Bradford. It is being launched today (Thursday 11 February) at a conference in the STUC as part of #heartunion week campaign against the Bill.
Amongst the proposals are measures on workplace and sectoral collective bargaining, right to take industrial action, co-determination, a strategy of encroachment upon the managerial prerogative, public ownership, worker cooperatives and tripartism.
The right to sectoral bargaining is worth highlighting in particular as a means to stop the ‘race to the bottom’ by taking out wages and conditions as a factor of competition between companies in the same sector. A form of co-determination is also worth highlighting so that workers can have their own representatives on the board of directors of the organisations they employ them.
In themselves the various proposals put forward are not new but what is new is using them together as a joined up, strategic means to solve a much longer standing issue of disempowerment and disenfranchisement in the workplace. Some of the proposals would provide for workers the greater ability to advance and defend their interests at work on immediate and day-to-day issues in the workplace – on such issues not just as pay but also the organisation of work – while others would allow workers to influence the decision making process within employing organisations and at the level of the economy. Without the latter, any advances in the former could be undermined.
Of the proposals, Professor Gall said: ‘The advance of neo-liberalism under the guise of human resource management has left workers in their workplaces more disempowered than ever before. This situation will only get worse with the arrival of the Trade Union Bill on the statute book. It is, therefore, imperative that in addition to opposing the Trade Union Bill the union movement takes a step back from this immediate task and considers how long-term and deep seated positive change can be brought about in workplaces so that workers empowered and enfranchised.’
He continued: ‘Although the times may seem inauspicious with a Conservative government and another looming recession, there are opportunities to be taken advantage to promote this radical reform of how workplaces are governed. Not least there is the new leadership of the Labour Party and in Nicola Sturgeon the first leader of the SNP who proclaims to be a social democrat. To do so would be to begin putting Scotland on Britain on a par with the current leaders in the field in Europe of workplace democracy like Germany and Sweden.’
Scottish Trades Union Congress (STUC) General, Secretary Grahame Smith added ‘Launched during #heartunion week, this paper makes a very welcome and positive contribution not just to the case for the value of trade unions, but by providing a vision of how properly organised workers, able to collectively bargain and participate in the management of their companies can change the industrial relations and the economy of this country for the better. The STUC intends to widely disseminate this paper which should part of the basis for unions’ work in improving the architecture of industrial relations in a Scotland.’
The full paper is available JRFRightsandRespect
As the negotiations between the Holyrood and Westminster governments over the fiscal settlement for Scotland continue and inch closer to some kind of deal, leading independent economist, Jim Cuthbert, argues there are ways to avoid Scotland falling into the ‘fiscal trap’ in a new policy paper for the Jimmy Reid Foundation called ‘Adjusting the Scottish Government’s Block Grant: taking a wider perspective’.
In noting the possibility of Scotland falling into ‘fiscal trap’, Cuthbert critiques the recent IFS report, ‘Adjusting Scotland’s Block Grant for Tax and welfare Powers; Assessing the Options’, and then lays outs the strategic alternative options.
Each option varies in its nature of method of indexation used for the block grant adjustment and outcomes of taxpayer fairness (see Appendix 1). The four options are Option A – Tax Revenue automatic; Option B – Tax Base manual; Option C – Fixed increment manual; and Option D – Fixed increment hybrid. For the purposes of comparison, Option A was based on the aforementioned IFS report.
Although not without their challenges, Cuthbert argues that Options C and D are by far the more meritorious. Option C indexes the block grant adjustment by a fixed low real percentage each year but faces potential problems of future, on-going adjustments. Option D goes a step further, addressing the problem of Scotland losing control over its own income tax rate when Westminster changes rUK income tax to fund reserved services. Thus, Option D restricts Westminster so that it could only change income tax in relation to ‘devolved’ services.
Turning to the political terrain for implementing either options C or D, Cuthbert argues
‘While Option D solves the problem of Scotland losing control of its income tax rate in the event rUK changes income tax to fund devolved services, mechanisms for implementing Option D would involve something akin to federalism. Consequently, there would need to be an over-arching chamber setting a block grant for each of the parts of the UK, and making decisions on reserved services. Westminster (or that part of it which would be akin to an English parliament) would be responsible for topping up its block grant through income tax, and other devolved taxes, to fund its spending on ‘devolved’ services. This would obviously be a major constitutional step’.
Concluding the paper, Cuthbert states:
‘Options A and B are unacceptable, on the grounds that both options involve Scotland engaging in an economic race with rUK, when the risks and penalties are out of kilter with the limited economic powers available to Scotland. They are unacceptable to those Scots interested in implementing a more progressive tax system, now we know that elements on the unionist side regard these options as requiring Scotland to do precisely the opposite, and introduce more regressive taxation. Option D is probably a step too far, given public attitudes in England – which means there may be room for compromise around Option C’.
Download the Policy Paper JRFCuthbertSmithpaper Jan 2016
In a significant new policy paper entitled ‘Increased trade and economic growth won’t happen in Scotland until we sort out our ports’, Alf Baird warns the Scottish Government that its hopes of growing the Scottish economy to provide for increased employment and a higher tax base from which to fund public spending will will come too little without resolving the chronic crisis affecting Scotland’s major privately owned ports. The paper can be downloaded here Economic growth & Scottish Ports
The paper argues that increasingly obsolete sea transportation facilities and links (docks, ports, shipping services) in Scotland mean existing international trade flows are weak and are becoming ever weaker as the Scottish economy continues to lose competitiveness. Indeed, much of Scotland’s traded goods have to be sent to and from ports in England, raising costs. The effect is that the amount of trade going through Scotland’s container ports is the same as that going though Iceland’s Reykjavik container port (when Iceland’s population is just 329,000). The obsolescence results from chronic lack of investment over decades by private equity port owners in new technologies, infrastructure and facilities as well as from the privatisation of the port authority role.
On this basis the paper contends that as ports in Scotland are a devolved responsibility, there is nothing to stop the Scottish Government formulating its own ‘ports policy’, preferably as part of a wider maritime transport and trade policy. Such a policy should seek to estimate the port capacity that is needed in future, and to then provide that capacity to enable trade to expand and thereby ensure the economy can grow, and to plan and facilitate ongoing investment in essential port infrastructure and key international shipping connections. Moreover, the Scottish Government should also seek to return the statutory regulatory ‘port authority’ roles and functions which are currently held by offshore private equity firms, to the control of public agencies, as is the case in virtually all other countries.
But critical in formulating its own ‘ports policy’, the Scottish Government thus needs to take control of the situation, not by taking existing obsolete ports into public ownership but by developing entirely new port capacity at more optimal locations. The paper argues this can be done by offering concessions to private firms to build and operate required ports and terminals as well as by an enforcement regime requiring port owners to adequately maintain and improve existing facilities, and to better regulate port charges.
Alf Baird commented: ‘No economy can sensibly depend on the offshore private equity model of port ownership and regulation to bring about trade growth. By its very nature, the private equity model limits investment in new port infrastructure, whilst continually demanding excessive profits, followed by selling on of what are ‘mature’ port assets to another ‘fund’ to do precisely the same thing over again. Ultimately, there comes a time when the nation’s port assets are so obsolete and trade is so diminished that this model is completely unstuck; given Scotland’s moribund trade position that time seems ever closer’.
Alf Baird began his working career in 1974 as a Liner Shipping Clerk at the port of Leith, then running a small packaging and freight forwarding company. After a degree in Business Studies at Napier University in Edinburgh in 1993, he was employed there first as a researcher and then as lecturer, completing a PhD on strategic management in the global container shipping industry in 1999. He was appointed Director of the Maritime Research Group at Napier in 1997, and in 2005 was appointed Professor of Maritime Transport. He has been appointed as specialist advisor on maritime transport matters by a number of select committees of Parliaments in the UK, Northern Ireland and the Isle of Man, and as advisor to various government agencies and ports including Scottish Enterprise, Highlands & Islands Enterprise, Clydeport, and Orkney Islands Council. He left Edinburgh Napier University in 2015 although he remains actively involved in international research and consultancy activity, particularly in the maritime economics/policy/business areas, and with emphasis on ferry transport, container shipping, cruise shipping, and seaport policy and design.
In a carefully constructed but sharply critical assessment of the recent Institute of Fiscal Studies (IFS) report entitled, ‘Adjusting Scotland’s Block Grant for Tax and welfare Powers; Assessing the Options’, leading independent economist, Jim Cuthbert, warns any negotiations deploying the assumptions and reasoning of the IFS report will ‘do Scotland gravely down’, and present a further twist to the present ‘fiscal trap’.
In the first of a new series of Jimmy Reid Foundation working papers entitled ‘IFS report provides inadequate basis for Scottish fiscal settlement negotiations’, Cuthbert demonstrates the IFS report by Messrs Bell, Eiser and Phillips represents ‘a very flawed assessment of the options for adjusting the Scottish government block grant and a significant danger for Scotland of falling into a ‘fiscal trap’ if the current negotiations take the IFS report seriously’.
The danger of being misled by the IFS report is significant because, while it does not recommend any specific method for adjusting the block grant and correctly identifies the difficulty of implementing the ‘no-detriment’ principles set down by Smith, the report nevertheless makes a series of incorrect decisions and assumptions about the characteristics of the block grant adjustment process.
One example is the report’s decision to use the method based on tax revenue indexation for adjusting the abatement to the block grant. This has profound implications for the types of risk to which the Scottish government’s revenues would be exposed, and for the way in which Smith’s second no-detriment principle will impact on the freedom of action of the Scottish government. The upshot is that, if the IFS report is used as a basis by which to negotiate the fiscal settlement, the decision to index on revenue, rather than tax base or some other approach, means that the Scottish government effectively loses control of its own full discretion over the income tax rates it wishes to set.
Other aspects which the IFS report either ignores, or to which it pays inadequate attention are:
- What effect does the Scottish government’s lack of economic powers have in affecting the balance between risk and potential reward in the eventual fiscal settlement.
- What are the limitations, and risks, of trying to run a monetary union on the basis of a largely formulaic approach to distributing resources.
Cuthbert’s conclusion is ‘the IFS study in effect represents a distorted assessment of the options for the post-Smith fiscal settlement. There are therefore grave dangers for Scotland if the IFS report were taken as the basis on which the fiscal settlement negotiations are conducted’.