Forum Topics

Do Labour Really Want to Form a Government?

The Today programme was looking at the policy Labour is proposing to increase worker shareholding in companies this morning. Basically all listed companies in the UK with over 250 employees would be required to give 10% of their shares over to a trust which would redistribute the dividends to workers in the company up to a maximum of £500 per worker with anything above that going to the government. The aim of the policy seems worthy but it was cooly picked apart on the radio this morning by a representative of one of the business industry associations. The seemingly benign proposal is essentially an extra 10% on corporate tax that will actually deliver little extra to workers at the affected companies. The example of Shell was given. It would require them to pay £1.2billion (!) per annum to the government. Because most of their staff work overseas only a tiny proportion of that would be paid to workers at the company. If being listed in the UK means there is effectively a 10% tax on your global earnings there would be a massive rush to delist from the UK stock market or cut the number of your UK employees to below the threshold. Either way the impact on jobs and the economy would be catastrophic.  An A Level economics student could have told the Labour party that so it must be assumed that they know the policy is totally unimplementable and that therefore it is designed to appeal to the conference and their membership rather than their electorate. Why then are Labour making it such a key part of their strategy to force an election when they are proposing policies that will make them unelectable? If there was an election the key factor in deciding which way to vote for me would be which party made Brexit less likely. This does still to be Labour but they seem to be going out of their way to make the choice a lot harder than it should be!

Gordon Southwell ● 2907d2 Comments ● 2906d

Wandsworth Council's £300,000 Pay Off

The danger here is thinking that Dawn Warwick is the problem and not that her case is indicative of a much bigger problem. There has been a very significant rise in the salaries of people at the top level of local government so far this century. This was justified by the argument that the public sector needed to keep talented people and had to keep pace with executive salary rises in the private sector particularly in financial services. The basis for this was a bit dubious at the time as there was little evidence that people were being poached from local government but the fiscal position generally was much better so there was money in the pot to pay for these rises. Two important changes have happened since this time. Firstly the defined benefit pension has more or less disappeared from the private sector and most people under forty won't have one. The fact that half of Dawn Warwick's pay off related to her pension entitlement shows how important this is. The net present value of someone who has had a career in local government and been paid a six figure salary would be millions. We complain about bankers' bonuses all the time but ignore this far greater expense that comes directly out of the public purse. Secondly the state of government finances has deteriorated significantly requiring us to make painful cuts in spending on services. One area where cuts are unlikely to be made is in the salaries of senior public sector employees. The public sector works very differently to the private sector. A personnel officer once told me that in the latter by 45 you are either firing people or getting fired as there is only room for a small number of people in any organisation who are older than that. Your pay is usually linked to the amount of revenue you bring in and if the people of your generation who were your clients are no longer there it will tend to fall if you keep your job at all. In the public sector it is like the Hotel California in that you check in but can never leave. People rise to the top whose main talent is knowing how to play the system and therefore aren't really that employable in any job that isn't funded by the tax payer. Because their contracts make them so expensive to get rid of and because it is very much in their interest to hang on as long as possible most public sector organisations gradually accrue more and more senior people many of whom add no real value. It shouldn't escape your attention that Wandsworth's children's service cut a senior position at a time when it is under huge pressure to improve standards and there was no suggestion that the loss of the role would undermine this goal. These taxpayer funded sinecures will but an even greater burden on public finances as time progresses. It is not just the cost of paying salaries but the pensions that will require other services to be cut. Wandsworth is relatively well off having reduced headcount at an early stage and the borough pension scheme is well funded at this point but that is not the case elsewhere. Schemes in other London boroughs have deficits of over half a billion and I was told of one example in which the number of potential pensioners from the Council scheme could eventually reach 7% of the population. This can't be funded at the local level so we will all have to contribute to the bill, a bill that in large part be paid by people who have no future entitlement to the generous pensions they are having to fund for previous generations.

David Parker ● 2939d4 Comments ● 2926d

Wandsworth's 'Shameful' Decision on Battersea Development

Could someone explain what exactly is shameful about this decision in particular rather than the way housing is managed generally.These 'affordable' units that people are getting upset about are going to be sold or rented at a 40% discount to the market level. Given the average price and rent of flats in this development these units could only become the homes of people who earn well above average incomes. So we are currently effectively subsidising the accommodation of the relatively well off - isn't this the scandal here.The only sustainable way to stop London house prices and rents spiralling ever upwards is match supply and demand and that means building as many homes as possible. The 4,200 homes that will be created as a result of this development will do much to put a lid on the market but without them the property shortage would be more acute.Ultimately there is no such thing as an 'unaffordable' home because people will live in these properties. Although they will be for people on higher incomes many of the people moving in to them will be moving out of cheaper properties creating more availability and reducing pressure on prices and rents.As far as the borough is concerned these new homes will all be paying Council Tax and the revenue can be used by the Council on things like social care and be more effectively targeted at the needy.What seems to me shameful here is how every property development is politicised by both parties pretending that our system of 'affordable' housing in some way benefits the poor. It does not.

David Parker ● 3348d5 Comments ● 2928d