Monday, 22 September 2014

Minimum Wage - crush the weak

Caught the James O'Brien show on LBC, on Monday morning. 
Mr O'Brien, who is the voice of  the left at LBC, was overjoyed that Labour had pledged a minimum wage of £8. Really, really happy. It's something I've heard him argue for a few times. Pay people more.

He put forward this hypothesis. If your business could not stand a measly wage rise for its employers to £8 from  the current £6.50 then your business is a zombie business and should go bankrupt. There is no point hanging on trying to make a go of it. Just close up. Shut the doors..Call in the administrator.

Now, the actual Labour party announcement is £8 over the course of a parliament. So its probably only an inflation + rise anyway. £1.50 over 5 years. A real non-annoncement if ever there was one. A miliband special.
 It was £5.80 in 2009. So has risen by 70p/hour during the great recession. It will do better than that in a more profitable climate.
And it wasn't clear if Labour also want to include the £8/ph for 16+17 years olds too. That would be about a 100% payrise for them. 

So, i have no real problem with a £1.50 rise over 5 years. Except if we were in a recession in 5 years time for any number of reasons from ISIS to Putin to EU vacuum cleaner motor  type regulations running amok, it would be pretty stupid to put up wages.

However, what is a problem, is Mr O'Brien's complete disconnect from reality. He was genuinely, genuinely saying, it is better to close a business than to let people be paid below £8 per hour.

He seemed to believe that a wage rise would not affect business. He quoted his favourite enemies of banks and supermarkets and multi-nationals, making millions in profits, whilst their lowly cleaners struggle on £6.50 an hour. 
SUCK IT UP capitalists! You CAN afford it! And if you can't ..tough..

Mr O'Brien is normally a well reasoned broadcaster. Thoughtful. Witty.Clever. A keen mind that is skilled at analysing what his callers are suggesting and quickly seeking out the flaws or surprises of what they propose. All while keeping the program flowing and the news and traffic on time. 
He is a good radio host.


In this instance, he's a lefty mental. He is someone unwilling to fully examine exactly what he himself proposes. Something he would never let a caller get away with. He was seriously talking of an £8 wage - tomorrow!

For instance, the NHS. Under these proposals, the budget for the NHS has just risen by some 19%-25% The number of workers, directly employed some 1.8 million, { indirectly, 4 million? }. The wages of EVERYONE must rise under minimum wage. Its no use paying a cleaner the same as a cleaning supervisor..all must have an increase.
Taxes must rise. That £1.50 is going to be gone with a 27% minimum rate of tax again.

Every council in the land has just had a whack. So council taxes must rise

Airlines and airports with their £99 a ticket deals must take a 20% hit on the nose.

A hairdresser operates on a physical employed basis. An owner can only cut so much hair themselves. So they have to employ. Can they put up the price of a haircut by 20% to meet the increase in wages? 
if they do, and the one over the road doesn't, how will they manage?
Mr O'Brien says the owner should just earn less money. And if her business is not already making enough to meet the rise, she should close up. 
he cares not for the owner taking all the risks. The employes, whose investment in the business is usually nil, is worth more and must come first

A corner shop makes some 10% profit from cigarettes. About 4% from national lottery. 12-25% from  magazines, fresh food, chilled goods etc. There is no margin to raise. 
Its a very, very competitive business with the big boys having the upper hand. Mr JamesOB is handing the largest corporations, in every sector the entire playing field. His support, his actual demand that the smallest must quit, leaves only the biggest players. The very companies that he continually attacks, for their dodgy corporation tax funneling through low tax havens. Their zero hour contracts. Their squeezing of suppliers. Their destruction of the high street...

He's proposing that only the megacorps will be left. 
The man is creating his own Skynet.

On top of that the inflation effects of a 20% payrise for all tomorrow have been documented well enough in this country in the 70s and 80s.  The effect on employment would be catastrophic. A wage hike tomorrow means limited hiring for 2-5 years except at the most profitable companies. It probably also means redundancies. Certainly it means  less hours. The businesses that pay minimum wage are in the low skilled, high employee count sectors. An £8 min wage does nothing to the more skilled sectors, who must be paying over that now for the majority of their people already. It hits the low skilled/unskilled. The very people that James feels deserve help the most.

Labour are also promising a job guarantee for every young person. That job wil be on this same national minimum wage.
How exactly are they to do that if the smallest of small businesses are closing? And not just the smallest. DairyCrest are announcing cuts to its workforce as it announces it will close bottling plants. 

I wonder if the workers there were asked if they wanted a pay freeze or a job, what they would say?
Mr O'Brien does not believe they should be asked . Just close the business down and let the workforce take up the much better paid jobs that will be on offer elsewhere.

Quite where these jobs will be, he doesn't say. Maybe a massive increase in  artisan bakeries and bespoke furniture covering stores. Designer curtains shops and specialty food emporiums. Those who can charge £7 for a loaf or £6000 for a coffee table can afford to pay any hourly rate the government requires.

For the real high street outside of Chiswick, where budgets are not the same as in West London media sector joint incomes,  there is always Wonga, Ladbrokes, Poundland, The Heart Foundation, Brighthouse and the tattoo parlour to work in.

Oh, By the way Mr -  Ed Balls,Mr  James O'Brien. It is the low paid commission that sets minimum wage and NOT the government. If you aren't going to listen to them, then abolish them.

And add those jobs to that ever growing dole queue.

"Greater Scrutiny"? Desperate Stuff from Miliband

Well it's not going to be business as usual for a couple of weeks, is it ?  Party Conference season will see to that, unless ISIL or Putin really pull a stunt.

I understand the case for pessimism but am still very upbeat about the opportunity presented to Dave.  When we watch Miliband on prime politico-TV spluttering that he's not against English MPs being given greater scrutiny of legislation affecting England, we know he is completely disoriented.

Greater scrutiny ?   Everybody with a perspective on UK local government immediately recoils from the word.  It was introduced when the old local council 'committee system' was overthrown by the 'cabinet system'.  For those who don't know, prior to being allowed 'cabinet' government, the bulk of local authorities' decisions not delegated to council officers were taken by all-party committees, so that back-bench councillors - who would sit on several such committees - had a fair crack at genuine involvement.  This system wasn't without its flaws; but back-bench involvement was much diminished when it was replaced by 'cabinet', where all decisions are taken by a majority-party clique (and a well-paid clique at that).  The sop thrown to back-benchers was 'scrutiny' - powerless question-time sessions in which cabinet members have to explain themselves.  (The same thing happens in those few areas with executive mayors, when it is the Mayoral coterie that offers itself up for interrogation.)

The consequence of this is that non-cabinet councillors, which includes most of even the ruling party's number, get no closer to decision-making than asking the odd question of an actual decision-maker once a quarter.  They secretly hate it, even though (like parliamentary select committees) they try to puff themselves up and make it sound important - Keith Vaz in Toytown.

Now of course Westminster backbenchers already have this system: the Standing Committees that (despite the name) are convened specifically to go through each piece of draft legislation, line by line.  They are allowed to propose amendments, too, if they dare: but are ruthlessly whipped and have barely any meaningful autonomous impact, mostly serving to give the government a bit of breathing-space to introduce its own amendments (via compliant back-benchers) as the inevitable nonsenses in a hastily-drafted Bill become apparent.  

So for Mili to offer Greater Scrutiny as his solution to the WLQ is a mighty insult to all concerned, and one that any politico feels all too keenly.  Is that the best you've got ?   A really tangible expression of pure political panic, of existential angst.  In the season of last-before-election Party Conferences, he needs above all to be declaring glorious, dividing-line policies.  And what's he got ?  A 'constitutional convention'; the minimum wage; a promise his wife will be out on the campaign trail; and scrutiny.

Now we at C@W have a distinctly limited regard for the strategy skills of George 'Genius' Osborne; but it occurs to me that these are the situations perfectly suited to his student-politics talents.  In parallel with several months of serious decision-making (and I still fondly hope someone is up to this challenge ...)  there is the childlishly enjoyable task of making Miliband wet himself in public.  It ought to be posssible to paint him into a very damp and uncomfortable corner for the remaining duration of the Parliament, and the old Camerosborne double act should be capable of that.

And maybe - just maybe - atone for their grotesque mis-step on Boundary Changes.  Because this is an existential crisis for the Tories, too.


Friday, 19 September 2014

Scots win Independence, delayed by one year to 2017

If Cameron now wins the election narrowly in 2015, as is possible, there will be an EU Referendum in 2017. England will vote for withdrawal and Scotland will not. Scotland will then demand to be 'free' within the EU (oh, the irony) and the devolved Parliament will demand it.

Chances of happening, not that low really, 8-1 perhaps?

Opportunity Knocks

The aftermath of the referendum is one of those rare moments on the battlefield when a genuine opportunity presents itself for a decisive, pivotal move.  It falls to Cameron.

And he even looks up for it.  Is there someone, anyone in the whole of the Tory Party (or on its payroll) with the strategic nous to follow through ?

A man can hope ...


Thursday, 18 September 2014

Uninstalling Scotland

Free up a bit of disk space: a programme we no longer need, cluttering up the memory?

Or something worth keeping, just because ..?