The Queen’s Speech sets out the government’s agenda for the final year of our ConDem Coalition government. This week we heard those plans. Both parties in the Coalition are simply mouthpieces for big business. It is no surprise then that the big business agenda continues to be followed.
Under the ConDem coalition the vast bulk of the population continues to suffer lower living standards through pay restraint and higher costs and the gap between rich and poor grows ever wider.
Pay for top company executives has gone from 60 times the average worker’s pay 15 years ago to 160 times today. In the UK now, the richest 1 per cent owns 60 per cent of assets while the poorest 20 per cent has less than 1 per cent.
The dog that didn’t bark
That is the reality supported by both the Tories and Liberal Democrats in their Queen’s Speech. It was notable not just for what it pledged but what it failed to mention.
Zero hour contracts? No change. Increasing the minimum wage to a living wage? Not a chance. Building badly needed social housing? Of course not. How about the hot topic of immigration? Not a word.
We did get promises to continue pressing on with the unpopular NHS privatisation and undermining locally accountable education in England.
Oh, they did also promise to crack down on employers who pay less than the minimum wage but there are no plans to employ more investigators. It seems likely that it will go the same way as the “crack down” on tax dodgers where they actually cut the number of investigators and reduced funds.
At the behest of their big business pay masters the coalition brought forward the Infrastructure Bill, which could include measures to change the law so that companies would not need permission from homeowners to drill under houses and land. It is intended to remove a stumbling block for frackers, who are already facing a “legal block” of thousands of people across the country denying them permission under trespass laws to drill under their properties. A recent poll found that 74% of people opposed the move but it seems that making money for your chums is more important than what the public think.
One of the biggest changes was in pension with the introduction of “collective schemes”. These can spread the risk between members and could offer them greater stability over the eventual size of the pension they will end up with, while limiting costs to employers because of their economies of scale.
Similar pooled schemes already exist in the Netherlands.
The new type of pension would be a middle ground between the two types of scheme which currently exist – defined benefit (DB) schemes, which offer people a guaranteed level of income when they retire and defined contribution (DC) schemes, which put the burden of risk onto the employee in terms of the eventual size of their pension income.
As announced in the Budget, the Queen’s Speech also confirmed that people aged over 55 will be given new freedoms to cash in their pension as they see fit, subject to their marginal rate of income tax.
This will mean that from next April, people can use their pension pot like a cashpoint and they will not feel forced into using the money to buy a fixed retirement income called an annuity.
Pat Harrington, general secretary of Solidarity, commented:
“Freeing people from being forced to buy an annuity will please many. The downside is that it gives responsibility to make sound and cautious financial choices to the individual. Do we have a society in which removing measures intended to protect people in old age by providing a regular amount of money produces responsibility? Time will tell.”
His views were reinforced by those in the industry. Towers Watson sounded a cautious note: “Of those who choose not to buy annuities, many may enjoy better outcomes, but some will burn through their money too quickly and others will be too cautious about how much of their savings they allow themselves to withdraw and spend. Defined contribution (DC) pensions won’t always be pensions any more – they won’t have to provide a regular income throughout retirement” said John Ball, UK head of pensions.
Chris Noon, partner at Hymans Robertson, said there were winners and losers:
“Middle and high earners will be celebrating tonight – they have always craved flexibility and now they have it.
“Lower earners may celebrate at first too, but there should be an air of caution here. The gleaming temptation to take a bigger lump sum at-retirement could result in some lower earners spending their full amount within a few years of retiring.”
Then there was the Orwellian sounding SARAH Bill (Social Action, Responsibility and Heroism). The bill will likely be another attack on workers’ health and safety, with the possibility of yet more ‘get-out’ clauses for unscrupulous employers.
As TUC General Secretary Frances O’Grady put it: “While it’s not clear at the moment exactly what the government is proposing, we are concerned that the Bill may let employers whose workers have been put in a dangerous situation off the safety hook.”
This latest attack on the rights of workers follows a pattern. The most recent legislation that protects unscrupulous employers at the expense of workers is the Enterprise and Regulatory Reform Act. And health and safety is not the only thing that’s affected. There are also changes to whistle-blowing protection, employment tribunal fees, compensatory awards and the potential loss of lay members from ET panels.
Recall – a castrated version
New powers allowing voters to kick out MPs who break the law are being introduced after years of delays over the move. Constituents will be able to sack their MP if they are sentenced to up to 12 months in jail. Voters could also trigger a by-election if the House of Commons resolves that an MP has engaged in “serious wrongdoing”.
Under the Recall of MPs Bill, a vote would be forced if more than 10% of constituents sign a petition over an eight-week period.
Pat Harrington, general secretary of the Solidarity union, commented:
“I think Zac Goldsmith MP was right when he called for a much broader ability to use Recall. This is a half-hearted, almost tokenist, version. It will not be enough to bring real accountability or convince the public that the House of Commons isn’t simply a club that broadly protects its own members.”
There were some measures in the speech which have been broadly welcomed by us. The proposals to extend the scope of the law against Female Genital Mutilation and anti-slavery proposals are two examples. Measures to help small-businesses may offer some comfort when we see the detail. Taken as a whole, however, the proposals of the government show that they are unwilling to address the fundamental problems we face as a society and, indeed, in many cases are part of the problem rather than part of the solution. The sad thing is that the official opposition is little better.