Why I am supporting @TonyRobinsonOBE’s petition for a #LivingWage and fair payment terms

Two simple ways for national and local government to boost the UK economy.

If you were at the East Anglia SME Business Forum (#EASMEBF) in Dunston Hall on Thursday 7 Nov (or at similar events earlier this year), you might well have heard me sounding off (to those who would listen) about how the UK government should boost the economy with two simple (and ultimately self-funding) measures: prompt payment of invoices and a Living Wage. Thankfully I am not the only one making these suggestions – and the calls are coming from across the political spectrum, including from many supporters of the free market (like me).

Pay up on time

The first was to ensure that all government departments and government supported organisations (Quangos and such), whether local or national, paid all their suppliers’ invoices within 72 hours.  There are two reasons for this – one moral and the other economic.

The moral case is that these suppliers have provided the goods and services as agreed and should not be left waiting for payment. Government (unlike private enterprise) does not have to worry about cash flow – it can always fund its payments out of borrowing or revenue. Society (all of us) should not be riding on the backs of people who supply it with goods and services (many of us).

The economic case is that cash flow is the big killer of businesses – particularly micro-businesses and Small and Medium Sized Enterprises (SMEs). So by paying all suppliers faster, the government makes it less likely that those companies (or their suppliers) will have cash flow problems. This would mean fewer companies going into administration, which leaves creditors out of pocket and employees out of work. A more reliable cash flow might also make it easier for some companies to borrow to fund expansion – so boosting growth.

Fair pay for a fair days work

My second point was that all levels of government should ensure that everyone working for the state (whether directly or on contract) is paid a Living Wage (currently put at £7.65 an hour by the Living Wage Foundation) rather than just a subsistence minimum wage (of just £6.31 an hour). Again, there are good moral and economic grounds for this.

The moral justification is that we all benefit from the work of these people and they are often among the most vulnerable in society (many a product of shortcomings in our state education system). We should at least treat them with the decency and respect we’d want for ourselves. We (society) should not be riding on the backs of the weakest, simply because they lack the means to negotiate more equitable rates of pay for themselves.

It also makes good economic sense to pay the lowest paid a Living Wage (which, let’s face it, is still pitifully low). For a start, it would reduce the amount they have to claim in working tax credits and other complex benefits that are costly to administer. People would also be able to plan their lives more effectively, including spending more time with their children, which would mean fewer chaotic and failing families (with all their associated social costs).

According to KPMG, which supports the Living Wage, some 21% of Britain’s 25m workers are paid less than the Living Wage. Of these, some 891,000 would are on the minimum wage. Increasing their pay to £7.65 an hour would make them some £2,500 a year better off.

KPMG UK (which has paid the Living Wage, as a minimum, to all directly employed staff and those employed by its sub-contractors and suppliers since 2006) reports that employee turnover among its contracted cleaning staff has “more than halved since paying the Living Wage.” There is also good evidence to show that paying the Living Wage increases productivity by boosting morale and reducing levels of employee sickness caused by the stress of working multiple jobs just to make ends meet. “Paying the Living Wage is not only morally right,” says Boris Johnson (Mayor of London), “but makes good business sense too.”

Currently, QE is supporting the economy but, in the words of a leading hedge fund manager, it is the “biggest redistribution of wealth from the middle class and the poor to the rich ever.” Paying the poorest workers a Living Wage would help (in a very small way) to redress this. It would also enable them both to save and to spend more, both of which would help boost the economy (since saving is used to fund investment elsewhere) and increase tax revenues.

The government (local and national) should require these things of its suppliers – as part of those suppliers Corporate Social Responsibility (#CSR) commitments – something that many companies seem to go on about, without really understanding what social responsibility means. Apparently the European Commission has clearly stated that applying such socially responsible conditions to public sector contracts, particularly relating to paying the Living Wage, is fine provided they are not discriminatory – so there is nothing stopping this, except a lack of political will.

Now there’s a petition

So I was delighted on Saturday 9 November to see, on twitter, that @TonyRobinsonOBE has started a petition urging the UK government to pay its bills on time and pay the Living Wage as a minimum. But he went further, he urged the government to use its powers of negotiation (rather than legislation) to persuade all government suppliers to commit to paying all invoices within 30 days and all employees the Living Wage as a minimum, if they want to win government contracts in future. In other words, make those bidding for such lucrative contracts “an offer they cannot refuse.”

This approach appeals to me because it is using government as a force for good – setting the agenda/leading by example whatever you like to call it – without going down the complex (and anti-free market) route of legislation. It also doesn’t force an increase in costs on the very smallest companies, which sometimes struggle to employ people on the minimum wage as they start to expand. And it doesn’t deter companies from doing business in the UK (since they don’t have to apply for government contracts if they don’t want to or can’t make them pay on these terms).

Socially Responsible Investment (#SRI)

I am also pleased to see that Socially Responsible Investors, such as CCLA, are now considering a Living Wage as an important factor for their ethical investments.  The more private investors who can put pressure on their SRI fund managers to do this the better. In time, we might hope to see paying a Living Wage as an integral part of all Corporate Social Responsibility (#CSR) policies. So please sign Tony’s petition today and help improve the lives of millions of people.

@HuwSayer

@Business_Write

#DevoMax – good enough for Scotland, good enough for England too?

Interesting article (many valid points) but why did @Frances_Coppola say: “Wales and Northern Ireland would still be represented [in the Westminster Parliament], although there would probably need to be fundamental changes to prevent them being swamped by the dominance of England”?

Why do we draw this distinction between Wales, Ireland, Scotland and the rest of the UK? If someone claims to be English and demands fair representation for the English, they are roundly derided as little Englanders and xenophobic. Yet when someone in Scotland, Wales and Ireland says they are Scottish, Welsh or Irish and demands the same they are applauded as proud, independent people. Nationalism seems to be considered acceptable beyond the English border but not in England.

Yet there are no major genetic, racial, facial, or ethic differences between most of the people living in the UK. This whole debate about nationalism is founded on a nonsense notion that there is still a clear distinction between various local tribes. Even if there were, there are probably as many so-called Scots, Welsh and Irish living in England as there are so-called English in the rest of the UK. But if one group of people is permitted to demand self-determination, surely all should have the same right.

Now let’s look at the East of England: population 5.3m compared with 5.1 in Scotland. We are as homogeneous as the population in Scotland – we even have a proud history as a once independent kingdom (OK not since 917AD) and a rather independent state of mind (the unofficial motto of Norfolk is ‘do different’). Why shouldn’t we have equal representation and control over our destiny as people in Scotland – #DevoMax even?

Time perhaps to abolish all the district and county councils in the region and have an East Anglian parliament instead. We could build it between Bury St Edmunds and Thetford – our ancient capitals. By reducing the number of politicians and paying them a professional salary we might even reduce bureaucracy, improve efficiency and increase accountability – while attracting a higher calibre of candidate.

PS: As far as I can tell, I have a fair mix of Welsh, English, and Irish ancestors (as well as a few from the ‘kingdoms’ of Yorkshire and Lancashire) – so what does that make me? I think the answer is British.

It’s easy to protest but harder to choose

Norfolk County Council (NCC) wants to build an incinerator (for domestic rubbish) just outside Kings Lynn. The EDP has written quite a few articles on the subject and the local district council has even balloted residents on the issue – perhaps unsurprisingly those residents voted overwhelmingly No! (Despite this NCC has apparently signed off on the project.)

Now I don’t want to get into the detail of the debate – I don’t know who’s right and who’s wrong – and I don’t know much about incinerators or other forms of waste disposal. My concern is the value of that vote – and all votes like it.

You may think it was a good example of local democracy in action – and to a point I agree with you.  Politicians should consult the people and we should definitely have more local and national debates like this. But they should also be honest about the complexity of the issues. In politics – as in life – many of the big decisions involve compromise, trade-offs between cost and convenience, they rarely come down to simple yes and no choices.

From what I can gather, West Norfolk District Council just asked residents:

“Do you support the construction of a mass burn municipal waste incinerator on the Willows Business Park, Saddlebow, King’s Lynn?”

Now that might strike you as a good question – one that gives a clear answer. But I’m not convinced it really works as a democratic tool because it does not ask people to vote for an alternative. So residents can happily vote No in protest, without having to make any hard choices about how the council should deal with their rubbish.

A more detailed, and to my mind honest, question might go something like this:

We have to dispose of X tons of rubbish every year. Currently most of that goes to landfill, but the tax on sites is set to increase by £££ over the coming years. We therefore need to consider alternatives and select one that does the least damage to the environment, while being affordable and efficient. Whatever solution you choose is likely to affect your council tax, your refuse collection services and your local environment. Here are some alternatives – please rate them for desirability.

  1. Reduce, reuse and recycle… here are the arguments for and against from the various interested parties – cost to you £x a year, affect on services etc.
  2. Landfill – arguments – costs etc.
  3. Incinerator – arguments – costs etc.
  4. Any other alternatives to the above…(assuming there are any serious commercial contenders).

OK – not a perfect question – it’s not meant to be – rather I am simply trying to show that the real question is far more complex than the one put to the voters. To pretend otherwise is to demean the democratic process and to patronise the voters (which may be the intention but that doesn’t make it right). Note: I suspect NCC will use an argument like this to discredit the vote in any court case challenging their decision.

I have a similar problem with the forthcoming vote on AV, which will apparently just ask us whether we want to change to AV or stick with FPTP (I haven’t made up my mind). Yet again, this seems to completely gloss over the complexity of the argument (including the fact that no voting system is completely fair). It pretends to give you choice but of such as limited range as to be meaningless. Surely if we are to vote on changing our voting system we should choose from a number of options after considered debate (not party political haranguing)?

Likewise, the argument over government spending (cuts) the deficit, the budget, the national debt seems to have degenerate into yes or no territory: Yes – all cuts good all borrowing bad, No – all cuts bad, all tax rises good. Missing from all this seems to be a much bigger debate on the structure of government spending, taxation and borrowing.

Maybe it’s too much to ask in this age of glib one liners and news-flash policy making that we have proper arguments – not the five-minute sort that simply turn into yes/no shouting matches but sensible debates that help people weigh-up the issues and seek understanding before being asked to choose. And perhaps all such votes should include the option: ‘Think again!’

Any thoughts? If so, add them below and feel free to share.

Thank you

@HuwSayer