Shock TUC report says Unions should get taxpayers money!

I saw that there's been a report from the TUC that says that Union Reps being paid by the employer is a good thing.  Shocking position for a report from the TUC to take, right?

(Report: http://www.tuc.org.uk/tucfiles/206/FacilityTimeSeparatingFactfromFiction.pdf)

It seems that part of their argument is based on survey data, and the rest is questionable:

They rely on data from a previous report that cited savings as follows:

i)Dismissal rates were lower in unionised workplaces with union reps – this resulted in savings related to recruitment costs of £107m-£213m pa

Surely this is because the Unions make it hard to fire people.  So if someone is crap at their job, you can't replace them with someone good at the job.  Without looking at the relative productivity rates of unionised vs non-unionised workplaces this is meaningless, but I reckon that preventing you from firing people who are crap would lower productivity and thus constitute a cost, rather than a benefit - and the magnitude of that cost will be significantly greater than the benefit, as you'd not want to sack someone unless you could get a better person in and make more money after costs were taken into consideration, so the costs must be smaller than the benefit.

ii) Voluntary exit rates were lower in unionised workplaces with union reps, which again resulted in savings related to recruitment costs of £72m-143m pa

People stayed longer (albeit because the benefits/pay were likely better) - this could be a valid benefit.

iii) Employment tribunal cases are lower in unionised workplaces with union reps resulting in savings to government of £22m-43m pa

See (i) - this is likely because tribunals were threatened in any number of cases, and the employer forced to back down.  If you sack less people, less people will complain.  I'd count this as a part of the cost of replacing crap people with good people, and would expect the benefit thus to far outweigh this cost.

iv) Workplace-related injuries were lower in unionised workplaces with union reps so resulting in savings to employers of £126m-371m pa

Really?  What were the additional costs of complying with increased health and safety requirements placed there by the Union rep?

v) Workplace-related illnesses were lower in unionised workplaces with union reps so resulting in savings to employers of £45m-207m pa

What about non-workplace related illnesses?  Is this just a case of the union rep saying "don't put it down as workplace related, or you could get in trouble"?

Taking points (i) and (iii) as negative (i.e. assuming that the productivity increase from replacing bad staff would be at least enough to cover the costs of replacing bad staff twice) and disregarding point (iv) as we have no idea of the actual costs involved in reaching this point gives a total saving from having union reps on the order of £40m (using average figures).

By the methodology in the report, 60% of this is public sector, so £24m.  Uprating to now gives £28.7m - call it £30m if you like.  So we get a benefit of £30m for an expenditure of £113m.  Sounds like a good deal to me... 

They question the £113m figure, suggesting that £80m is more reasonable - so we're getting back a massive 38% of what we spend.  That's the kind of deal our government should be fully in support of!

Think it through

http://www.telegraph.co.uk/finance/jobs/8865772/Temps-get-out-clause-could-be-tested-in-court.html

“We live in perpetual hope that maybe, down the line, we might get a small pay increase,” says Mark, an agency driver currently working for Tesco. “We’re not necessarily looking for pay parity, we’re just looking for the crumbs from the table.”

Fair enough, I suppose.  Everyone wants a pay increase, but the terms and conditions were laid out when you joined - they're not cutting your pay, they're just not paying you as much as you might get if you worked in another role for Tesco.

Mark is one of thousands of agency workers up and down the country who has recently been asked to sign away his rights to the same pay as permanent staff at the supermarket – overriding new equal pay rules which came into effect last month. He stands to lose about £150 extra a week.

No he doesn't.  He had a choice - sign away the "rights" or lose his job.  The £150 a week was never on the table - he never had it, so how can he lose it?  If he was happy to work for his current salary when he got the job, why should he suddenly get a big pay rise now?

On average, temps currently get paid about a third less than permanent staff doing the same job, according to the TUC.

That's usually for a number of reasons.  For example, they've often not been with the company long and are not expected to stay all that long, so they don't get the same level of training as permanent staff, so they don't produce the same quality of work as permanent staff.  Also, they can usually leave with a minimum of notice (1 day is not unheard of) and thus the company can't rely on them to the same extent as they do their own staff.  Also it's often a lot easier to get a temp job (my company has a battery of tests and assessments that you need to pass to get a job, to ensure that they get people who can cope with the role.  For temps who are mostly filing or putting letters in envelopes it's not necessary for them to have the same level of ability, so they don't get the same pay and don't have to do the tests).

I'm sure there are some workers out there who do complicated, detailed work and are employed as temps.  All I can say to them is that if you don't like it, get another job.  If you're vital where you are, threaten to leave.

Fundamentally, I just don't see why companies should be forced to treat temps and permanent staff the same given that there are significant differences between them.

(I also don't think government should be involved at all in what people do in their private interactions and should just stop trying to tell us all how to live, but that's never going to happen)

Civil servants should never be allowed to make agreements

http://www.telegraph.co.uk/news/uknews/crime/8867315/Police-force-to-pay-out-for-overtime-officers-never-worked.html

Under the generous arrangement officers working in the Operations and Communications Branch (OCB) are paid for a minimum of six hours overtime when called in on their day off - even if they work fewer hours.

The local branch of the Police Federation, however, noticed that staff were only being paid for the hours in which they worked and took the force to court.

Oh no - they were only being paid for the hours that they worked!  But wait a minute - police officers are on a starting wage of around £30k for 37 hours a week, so that's roughly £17.50 per hour (accounting for holiday), so that's £105 for 6 hours work.  Not bad if you're only called in for 1 hour.  Sounds like a stupid policy.  Sure, allow a little extra for travel if need be, but to have a minimum of 6 hours?  That's definitely stupid.

Never mind the rights and wrongs of it - if the agreement was that they get paid 6 hours for coming in, then fair enough, although you'd hope that the authority wouldn't have to be forced into keeping it's agreements.  Still: a very generous and stupid policy.

This is why civil servants should never be allowed to make agreements (or decisions.  Or anything, really...)

The referendum

With all three main parties having a three line whip, I guess we should consider ourselves lucky that it got as many votes as it did.

I do find it really frustrating that the MPs who are there to represent our interests clearly don't give a crap what the people think.  I know that those in government think that they are our rulers and that we should let them make all our decisions for us, but I had hoped that a few more of the backbenchers might be on the side of the people that they work for.

So I'm wondering what the next step is.  Do we all just sign another petition (https://submissions.epetitions.direct.gov.uk/petitions/356 looks like it's doing ok, at over 30k signatures already) and keep on making them whip their MPs, while noting carefully who slavishly obeys their political masters, so that we can actively campaign against them next election?

If anyone has any better ideas, I'm all ears!

Why the Laffer Curve shouldn't matter

The Laffer curve is often cited as a reason not to raise taxes.  I think this is a disingenuous argument that rather misses the point.  Let me explain...

For those of you who don't know, the Laffer curve is a theory that says that there is a level of tax that maximises revenue.  If you raise the tax rate too high, people will be more inclined to avoid the tax, whether by using off-shore arrangements in the case of VAT, by becoming self employed and paying dividends in the case of NI and income tax, or even simply by working less (as each hour worked is worth less to the individual as the government's take rises - there comes a point when it's not worth the bother). 

Further to the above, it has been suggested that the new 50% rate of tax will not increase tax revenue as it is too high - people will work less, employ accountants to avoid the tax or leave the country to avoid paying it (and the people being taxed are those most able to do these things).

I think that this misses the point.  The whole idea behind taxes is that there are some things that we can't buy efficiently as individuals.  Taxes are levied so that government can provide us with the things that only government can provide, while inconveniencing us as little as possible (in an ideal world).

If this maxim were followed, the total size of government would be much much smaller, and thus much less tax would be required to fund it.  The Laffer curve is irrelevant because the purpose of taxation is not to raise as much money as possible, but to provide essentials only, and so we should never get anywhere near the point where we suffer from diminishing returns.

Consider the damage done to our economy by the government taking fully 50% of the fruits of our productive labour and pissing them up the wall...

The Budget: Take with one hand and give with the other?

According to the BBC:

George Osborne has cancelled next month's 4p rise in fuel duty in what he has billed his "Budget for growth".

A further 1p will be cut from pump prices at 6pm - all paid for by a £2bn tax on oil companies.

Now I could be wrong, but my guess is that the oil companies will need to find the money for this from somewhere.  And what's the most likely source of this revenue?  My guess would be petrol price increases.

So the government are reducing fuel duty by creating more tax for oil companies to pay - which is likely to push up the petrol price.  Anyone else see the problem with this? (or am I somehow reading it wrong?)

The Evils of Taxation

 I believe that a lot of what the government does, they shouldn't.  They provide services that could be obtained for less in the public sector, purely because the people in charge think that they know better how to spend our money than we do.  Everyone these days seems to be looking at the way the government spends our money, but before they can spend it, they have to take it from us.  As most people are unaware of just how much of our money is taken, I thought it worth taking the time to quickly explain just how much of our money the government gets it's grubby mits on.  In particular, I'm interested in the marginal rate that you pay.