Grangemouth and the EU/WTO


Grangemouth and the EU/WTO

By Syzygysue

Also published here  on Politics and Parasites

The dispute at Grangemouth is the old trick of provoking industrial action – then holding the workforce to ransom by threatening their jobs unless they agree to the draconian changes in their employment packages that the bosses wanted all along.  It’s exactly what Margaret Thatcher did to the Miners, and it is what Ratcliffe, a private Hedge Fund owner, has done to his employees.

But it is not just those who were threatened with job loss, Ratcliffe was also holding the UK and Scottish governments to ransom.  70% of Scotland’s fuel is processed at Grangemouth, and represents 8% of Scotland’s manufacturing capacity or 2% of its GDP.

Isn’t about time, the politicians turned the tables and called a halt to these blackmailing tactics by private energy providers?

For example, Ed Miliband’s announcement at LP conference which identified the public anxiety and anger about energy prices, has been met by the energy providers increasing their bills by 10%, in spite of OVO reports that wholesale prices have not increased.

The energy companies’ action is nothing short of a provocative Vs-up to the public and politicians.

Cameron et al have nowhere to go because they are caught between the public anger and their ideological commitment to the corporates.  Meanwhile, Ed Miliband’s proposal to freeze prices for 20 months is criticized as not being able to prevent price hikes both before and after (as indeed, the current show of strength on the part of the energy companies is intended to demonstrate).

Too rarely reported, however, is Labour’s intention to regulate the wholesale energy market by pooling electricity prior to its being sold on to the energy companies.

But why on earth go to all that bother?

We’ve already seen the energy providers disregard for the public good; their indifference to increasing the numbers of cold-related deaths this winter, and people forced to choose between eating and heating.

How much further do the energy companies have to go, in clearly demonstrating that the UK needs to be able to control supply and energy prices on behalf of its people, the economy and the environment?

The political-bullying alone, is reason enough to curb the energy companies power by taking them into public ownership asap.

But on top of that, climate change and transforming energy provision away from fossil fuels will never be achieved through the markets.

… the project of sustainable capitalism was misconceived and doomed from the start because maximizing profit and saving the planet are inherently in conflict and cannot be systematically aligned even if, here and there, they might coincide for a moment. That’s because under capitalism, CEOs and corporate boards are not responsible to society, they’re responsible to private shareholders. CEOs can embrace environmentalism so long as this increases profits. But saving the world requires that the pursuit of profits be systematically subordinated to ecological concerns…

Profits depend on increasing sales and prices not on reducing energy consumption and supporting cheaper renewable energy.  The first duty of a private company is to maximize the return to its shareholders.

However, taking the refinery into public ownership is not so easy given the EU/WTO legislation, negotiated and signed in secret by the EU Commission and Council of Ministers… and the UK government will be even further constrained by the US-EU FTA (Free Trade Agreement) currently being rushed through for 2014.

Once a country is locked into the GATS regime, the right of its government to regulate liberalized service sectors is diminished, paving the way for foreign transnationals to enter the domestic market. Any attempt to reverse the situation would be subject to WTO disciplines and penalties.

The same holds true for Royal Mail and the NHS.  As an unelected Corporate Tribunal, the WTO has the power to overturn UK sovereignty on employment and environmental protection legislation, and many other decisions.

Unravelling the spin: a guide to corporate rights in the EU-US trade deal

But as Michael Meacher writes:

… this disaster reveals the desperate need for a proper industrial strategy to safeguard and steadily enhance the nation’s manufacturing capacity.   This dispute reveals the appalling consequences which flow from unconditional belief in private markets and the need for a strong supportive State role as exists in all successful economies today.

So how can we take back our public services and utilities into democratic ownership?

We are never going to dismantle this free trade regime with negotiation tactics… if we want to defeat the free trade regime or an institution like the WTO we need to build a new balance of forces led by social movements.

Essentially we need to organise/support a united anti-capitalist Battle-for-Seattle-on-Thames  and reject the ever-increasing stranglehold of liberalisation, financialisation and the Washington Consensus.  After all, none of us were even told about this, let alone voted for it.  We certainly are already in the post-democratic era.

What type of jobs could the government create?


What type of jobs could the government create?

By alittlecon @alittleecon

Read a bit of nonsense this morning from the so-called ‘Taxpayer’s Alliance’ about how ‘work for dole’ programmes should be expanded to save money. The effectiveness of this as a policy rest upon the idea that most unemployed people are generally taking the piss, and if we make being unemployed more unpleasant (as if it’s not unpleasant enough already), people will just go out and find a job. The idea also appeals to a certain type of person who view themselves as ‘paying for’ unemployed people to live it up on benefits, and think they should have to dance for their suppers.

Needless to say, I think this idea is garbage, and the actual problem is a lack of paid work. The solution to this seems obvious. The government should just create jobs. This is anathema to people like the Taxpayer’s Alliance, who suffer from a certain kind of cognitive dissonance about the issue. While they have no problem in coercing welfare claimants into jobs at Poundland et al as long as it pays no more than the current level of benefits, if the government were to actually create jobs paid at a living wage, these jobs would be ‘make-work’, akin to Keynes’ digging holes and filling them in again.

Even people who realise there simply aren’t enough jobs to go round are resistant to the idea that the government should simply create some, because they doubt that sufficient useful work could be found, so it’s better to leave people unemployed.

To counter this, I thought a list of potential jobs that could be created might be useful. I’ll start with a few of my own and request others to add their suggestions below in the comments:

  • Sports Coach
  • Street Musician
  • Street Artist
  • Actor
  • Landscape Gardner
  • Community Allotment Worker
  • English Language Teacher
  • Community Translator
  • Childcare (own kids)
  • Childcare (someone else’s kids)
  • Adult Social Care
  • Youth Worker
  • Household Energy Efficiency Installer

The UK needs 8 million New Jobs


The latest data shows the economy is smaller today than it was in in the first quarter of 2010 and now 4.5 per cent below the previous peak in the first quarter of 2008.

The jobless total in the UK was 2.5 million people at the end of December, while the unemployment rate stood at 7.8%.  However, this figure does not include people who are on workfare placements or are underemployed in part-time work.  The true figures wanting  a job is likely to be 8+ million.  This is a desperate waste of the real wealth creators.

At the same time ‘We are stumbling into a lost decade, serious long term damage is being done to the economy and any recovery looks like it will be based on a lower wage, lower productivity model with serious implications for living standards.  As for the claim that austerity has brought us low interest rates – I’m amazed anyone bothers to argue this nonsense anymore.’  Duncan Weldon ToUChstone blog

Keynes said  ” Look after unemployment and the budget will look after itself. ”  We need a government committed to full employment and a jobs guarantee for everyone who wants to take one.  Rooseveldt showed how it can be done – back in the 1930s.  But we have a Tory/LD coalition government that is doing the opposite in the name of a recovery that never comes.

From  KC’s JobsNow! Hat-tip – New economic perspectives

Related posts:

Economics in crisis – it needs a ‘Reformation’

The Future Jobs Fund: One of the most ineffective job schemes there’s been?


The Work Programme Part 1 – Worse Than Doing Nothing


The Work Programme Part 1 – Worse Than Doing Nothing

First posted on December 1, 2012 by 

This is the first of a two part blog on the Work Programme. This part looks at this week’s data release, and part 2 will look at some of the tricks Work Programme providers seems to be using to ‘enhance’ their figures.

This week, the DWP finally released the first performance figures from the Work Programme, the Government’s flagship welfare to work programme, and boy were they poor. In the first 12 months of the programme, just 2.3%* of people referred to the Work Programme have found work which lasted for at least 6 months.

At the outset, the DWP estimated that if the only support long term unemployed people received was the standard Job Centre Plus offer (basically access to job points and fortnightly signing meetings), then 5% would find sustainable work anyway. The Work Programme providers had a minimum performance target of 5.5%. DWP expected this to be exceeded, but in fact every single provider has failed to meet this contractual obligation. What this suggests is that the Work Programme is worse than doing nothing. Read that again. Worse than doing nothing.

As you might expect, the Government and the providers themselves tried to put a positive spin on the numbers, arguing that since the programme started, 207,000 had moved into work at a cost of £2,000 per job, and over half of participants had had a break in their benefits since starting the programme. Ian Duncan Smith in particular likes to think if someone has come off benefits, they must have moved into work, but lets just look at those figures again.

878,000 people have been referred to the Work Programme, and 207,000 (according to the providers) have had at least one job start since starting the programme (24% of those referred). And yet around half (which equates to almost 450,000) have had a break in their benefits. So less than half of those coming off benefits actually found work. Is the Work Programme about finding people work or getting people off benefits?Providers seems to be more successful at the latter than the former.

If we take the 207,000 figure at face value, does this signify success as is being suggested? We know that in the first 14 months of the programme, 31,000 people moved into work and stayed there for at least 6 months (or 3 months in the case for former ESA claimants. To do this, they must have moved into work by the end of Jan 2012. ERSA (the industry’s trade body) helpfully break down job starts by month, so we know that up to the end of Jan 2012, just over 64,000 individuals started a job, but of these ‘jobs’ only 48% of them lasted long enough for the providers to claim a job outcome payment. It’s probably slightly worse than that because providers can still claim a payment if an individual gets a job, leaves it and starts another. So if someone does 3 temporary jobs lasting 2 months each, the provider can claim that as a job outcome. What sort of jobs are they that so many last less than 6 months? It seems that the definition of ‘job’ seems to be changing. I’ll explore this a bit more in part 2.

Looking at the Government’s chief argument then – value for money, while the headline number is £2,000 per job, if you break that down, it’s about £14,000 per job sustained for 6 months or more. Let’s not forget too that of the over £400m paid out to providers in the first 14 months, at least £350m took the form of ‘attachment’ payments – the £400 or £600 providers receive per participant just for accepting them on the programme. Ultimately though, the value for money argument is spurious, because as we’ve already seen, if we had spent nothing on welfare to work programmes, we would have expected more people to move into work. Once more then, the Work Programme is worse than doing nothing. The Work Programme seems to be very good at shifting public money into private hands, but less so at the job it’s apparently designed to do – finding work for people with complex needs.

That’s Part 1 then. Part 2 will go into more detail about the problems with the programme, why it’s such awful value for money, and what an alternative might look like.

*UPDATE: Via Twitter, @boycottworkfare points out that the performance figure for the first 12 months is not 2.3%, it’s actually worse, only 2.1% See this Fullfact post for an explanation.


ERSA – The trade body for Work Programme providers

DWP ad hoc analysis of numbers of individuals starting Work Programme and then having a break in their claim. (As an aside, I have a real problem with the DWP’s use of ‘ad hoc analyses’. They seem to be being used to muddy the waters about what is really happening, the opposite of what statistics should be used for. My very first blog post was on this topic. Read it here.)

DWP official Work Programme statistics