Category Archives: employment

Will this British shipyard retain its skilled workforce, strengthening the local economy?

Last year, news of plans to axe about 40% of the workforce by the end of March 2019, was given to union representatives and workers on October 11th, though Cammell Laird’s Birkenhead shipyard (above) and marine engineering services had won two contracts that month, worth £619 million. The Unite union had demanded to see Cammell Laird’s business case for cuts which would lead to the loss of vital skills and ‘backdoor casualisation’ of the workforce, undermining the shipyard’s ability to fulfil new contracts.

At the UK Chamber of Shipping during London International Shipping Week 2019 plans were launched yesterday for the building of a new £150m disaster relief ship to be built at Cammell Laird (design below), supporting valuable skilled jobs, and equipped with innovative British technology. It will be permanently based in the Caribbean to support disaster relief efforts and provide specialist training berths for the next generation of UK and Commonwealth officer cadets, rating apprentices and trainees in trades associated with aid and reconstruction.

Britannia Maritime Aid, maritime professionals and training experts have joined forces for the project with backing from former First Sea Lords, the Lord West of Spithead and Admiral Sir Nigel Essenhigh. Other supporters include members of the Houses of Lords and Commons, Leadship, the RMT union and Nautilus International, the UK Chamber of Shipping, the Merchant Navy Training Board, the maritime charity London Trinity House and the Government of Barbados, whose Prime Minister will speak at the launch.

As well as supporting humanitarian aid missions in the Caribbean, there will be a focus on the environment and ocean advocacy – including beach and coast clean ups, plastic collection and research.

BMA chairman Captain Kevin P Slade said: “Having a dedicated vessel with a training and aid function is a first of its kind for the UK and would ease the pressure on the limited resources that the Royal Navy and Royal Fleet Auxiliary can provide.

Admiral Lord West added: “Britannia Maritime Aid’s plans will significantly bolster the UK’s maritime capabilities in the long term while saving lives, supporting British shipbuilding and complementing the role of our hard-pressed armed forces. “I fully support the proposals and urged others to give their support to ensure we make these very welcome plans a reality as soon as possible.”

BMA’s vessel – to be operated by a British company – will include a training centre, landing craft, helicopters, drones, rough terrain vehicles, onboard medical facilities, briefing rooms, conference facilities, workshops and full mission bridge and engine simulators for trainees. The ship will be able to carry up to 6,000 tonnes of vehicles and aid supplies – more than 10 times the capacity of current vessels – including field hospitals, field kitchens, tents, fresh water and fuel for devastated areas.

BMA aims to deliver its ship by 2024, and will charter or buy suitable ships to run operations until its purpose-built ship is ready.

London International Shipping Week’s website reports that Maritime Minister Nusrat Ghani yesterday marked the start of London International Shipping Week by announcing a new ship for the General Lighthouse Authority, which is responsible for providing more than 600 aids to navigation around UK waters, including ships, lighthouses and buoys, and helping thousands of mariners every year. The vessel will provide critical navigation aids to ships in some of the most dangerous waters in the world, guiding them into safe channels away from wrecks, thanks to an upgrade in the latest technology.

Boosting innovation, skills, jobs, and productivity across the UK

Earlier this year the Department for Transport launched its Maritime 2050 Strategy to reduce the environmental impacts of shipping and support UK businesses. This follows the strategy outlined in the UK National Shipbuilding Strategy: an independent report (Sir John Parker, 2017) which advocates the transformation of the procurement of naval ships, grow the Royal Navy fleet by the 2030s, boosting innovation, skills, jobs, and productivity across the UK.

Sources:

https://www.thebusinessdesk.com/northwest/news/2047718-shipyard-joins-in-launch-of-plans-for-150m-disaster-relief-ship

https://politicalcleanup.wordpress.com/2018/10/11/can-britain-afford-to-offshore-ship-building/

https://www.thebusinessdesk.com/northwest/news/2027194-cammell-laird-highlights-role-regional-economy-northern-powerhouse-minister

https://londoninternationalshippingweek.com/new-ship-to-boost-safe-navigation-in-uk-seas/

 

 

 

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EC: the Circular Economy Action Plan

In March, the European Commission published a comprehensive report on the implementation of the Circular Economy Action Plan, announcing that all 54 actions under the Circular Economy Action Plan launched in 2015 have now been delivered. 

This has accelerated the transition towards a circular economy in Europe. In 2016, sectors relevant to the circular economy:

  • employed more than four million workers, a 6% increase compared to 2012.
  • opened up new business opportunities,
  • gave rise to new business models
  • developed new markets, domestically and outside the EU
  • generated almost €147 billion in value added by repair, reuse or recycling
  • and accounted for around €17.5 billion worth of investments.

On this site in February there was a report about The Manchester Declaration by the UK community repair movement (follow the link to see a wide range of members). This called for the repair of products, especially electronics, to be made more accessible and affordable, while ensuring that product standards that make products easier to repair are adopted.

There are currently 1689 Repair Cafés in the world. One product successfully repaired at a Repair Café can prevent up to 24 kilos of CO2 being emitted, according to research by Steve Privett, who examined data of almost 3000 repairs carried out at 13 Repair Cafés in the UK.

These activities are in tune with the Circular Economy Action Plan formulated by The European Economic and Social Committee (EESC).

The EESC seeks to improve the Ecodesign Working Plan (2016-2019) in order to drive ‘wholesale’ change in behaviour through the supply chains of goods and services at a pace that would reflect the ambition of the Circular Economy Action Plan, introduced in December 2015.

The ecodesign of goods and services needs to go beyond just energy considerations – the component parts of a product should be easily recoverable for reuse and/or remanufacture and drive the creation of a strong secondary raw materials market. There must be a focus on the full lifecycle of products including:

  • their durability,
  • ease of maintenance
  • and repair,
  • potential for reuse,
  • upgradeability,
  • recyclability
  • and actual uptake after use in the form of secondary materials in products entering the market.

The EESC has reaffirmed its support for the use of Extended Producer Responsibility as a tool to promote the transition to circular economy business models. It focusses on the end-of-use treatment of consumer products, aiming to increase the amount of product recovery and minimize the environmental impact of waste materials.

An EC reflection paper finds that almost all elements of the Action Plan have been delivered but more steps will need to be taken to build a fully circular European economy. Europe is moving steadily towards a climate-neutral, competitive circular economy where pressure on resources and ecosystems is minimised.

 

 

 

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This time it must be different: ten years after the economic crisis – jobs in every constituency

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Global weather patterns have increased attention on the adverse effects of climate change and unease grows about the threats posed by automation.

American Democrats and Greens are taking on board the message delivered for years by Colin Hines, convener of the Green New Deal Group, more recently in the Guardian and repeatedly since then.

Implementation of the group’s Green New Deal infrastructure programme would mitigate the adverse effects of climate change, substantially reducing the domestic carbon emissions and automation-related unemployment.

However it will be important to build up public support for the massive systemic change advocated by many, including both Sir David Attenborough and Greta Thunberg. The often uncomfortable personal lifestyle changes needed must be seen as part of a diverse and popular programme addressing the social, economic and climate insecurity increasingly felt by the majority.

The changes would involve dramatically increasing the funding of:

  • employment in face to face jobs that address the worries of people of all ages, such as inadequate health-care, education and housing,
  • energy efficiency measures,
  • the increased use of renewables,
  • face-to-face caring in the public and private sector – difficult to automate or relocate abroad,
  • interconnected road and rail services in every community,
  • electric vehicles for private use
  • and an enormous nationwide green infrastructure programme ensuring the rapid decarbonisation of energy, transport, resource use and food production.

The changes must be couched in terms of being a massive local job generator and one that provides business and investment opportunities. Read more here.

America’s Green Party 

As the convenor pointed out in the Financial Times yesterday, the political advantage of this approach is that it would be seen by voters to be beneficial to every constituency and, as such, should appeal to all political parties. It will require a wide range of skills for work that will last decades, help to improve conditions and job opportunities for the “left behind” communities in the UK and ensure that the urgent demands of many for action on climate change can be more swiftly met.

 

 

 

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European Spring alliance will advocate a Green New Deal for Europe

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Yanis Varoufakis co-founder of DiEM25 (Democracy in Europe Movement) and former Greece finance minister, has advocated a Green New Deal for Europe.  Towards the end of an article (Dec.2018) he wrote:

This is what Democracy in Europe Movement 2025 – which I co-founded – and our European Spring alliance will be taking to voters in the European parliament elections next summer. See video here.

The great advantage of our Green New Deal is that we are taking a leaf out of US President Franklin Roosevelt’s original New Deal in the 1930s: our idea is to create €500bn every year in the green transition across Europe, without a euro in new taxes.

Here’s how it would work: the European Investment Bank (EIB) issues bonds of that value with the European Central Bank standing by, ready to purchase as many of them as necessary in the secondary markets. The EIB bonds will undoubtedly sell like hot cakes in a market desperate for a safe asset. Thus, the excess liquidity that keeps interest rates negative, crushing German pension funds, is soaked up and the Green New Deal is fully funded.

Once hope in a Europe of shared, green prosperity is restored, it will be possible to have the necessary debate on new pan-European taxes on C02, the rich, big tech and so on – as well as settling the democratic constitution Europe deserves.

Perhaps our Green New Deal may even create the climate for a second UK referendum, so that the people of Britain can choose to rejoin a better, fairer, greener, democratic EU.

Read the whole article here.

Postscript

On Monday, March 25, DiEM25 and European Spring gathered in Brussels to present the women and men from all corners of Europe who will take our common political programme to the ballot on May 25 – like Génération.s’ Benoît Hamon and LIVRE’s Rui Tavares among others – at the BOZAR theatre. This is where we officially launched our European Spring campaign – embodied in a New Deal for Europe, a set of ambitious economic proposals to save Europe from itself by transforming it.

 

 

 

 

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The Green New Deal infrastructure programme

Global weather patterns have increased attention on the adverse effects of climate change and unease grows about the imminence and widespread threats posed by automation.

In the Guardian, Colin Hines, convener of the Green New Deal Group, described the Green New Deal infrastructure programme which would mitigate such adverse effects. He pointed out that the UK could contribute to substantially reducing its domestic carbon emissions while addressing the serious threat of rapid and ubiquitous automation raised by Yvette Cooper. The report may be read here.

Jobs created in every constituency

Two major labour-intensive sources of local jobs were advocated: face-to-face caring in the public and private sector – frequently discussed – and infrastructural provision and improvements. Both are difficult to automate and can’t be relocated abroad

Infrastructural provision and improvements are crucial to tackling climate change, prioritising energy efficiency and the increased use of renewables in constructing and refurbishing every UK building.

In transport the emphasis would be on increased provision of interconnected road and rail services in every community, encouraging electric vehicles for private use.

Hines added that apart from the advantages of improving social conditions and protecting the environment, this programme will have two further very politically attractive effects:

“The majority of this work will take place in every constituency and will require a wide range of skills for work that will last decades. It would help to improve conditions and job opportunities for the “left behind” communities in the UK.”

 

 

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Prem Sikka: “If austerity is over, the Chancellor must present a plan to invest in our economy”

Chancellor Philip Hammond’s number one focus should be investing in a sustainable economy, argues Prem Sikka, Professor of Accounting at University of Sheffield and Emeritus Professor of Accounting at University of Essex. 

In a recent article, Sikka (below right) observes that in the face of Brexit uncertainties, many businesses are withholding investment. But to meet the challenge, the government will need to abandon almost of its headline polices.

He points out that historically, the private sector has shown little appetite for long-term risks and the state invested heavily in biotechnology, telecommunications, postal, information technology, utilities, shipping, railways, airlines and many other long-term industries.

For the last 40 years, the government has privatised most of these industries and relied on a variety of tax incentives to persuade the private sector to invest.

Sikka’s verdict: the results have not been encouraging – investment slumped

The lowest ratio of investment to GDP in EU countries was recorded by Greece (12.6%), followed by Portugal (16.2%) and the United Kingdom (16.9%). And since the 1990s, the UK R&D expenditure has fluctuated between 1.53% and 1.67% of GDP, well below the EU average.

Successive governments made a deliberate decision to prioritise the service sector though it is the manufacturing sector which generally generates more skilled, semi-skilled and higher paid jobs. Its multiplier effect – the ability to generate additional jobs – is also greater as the items need to delivered, maintained and repaired. Yet the manufacturing sector has continued to shrink and now accounts for around 9% of the UK GDP compared to 30% in China, 20% in Germany, 12% in the US and 19% in Japan.

Without adequate purchasing power, people cannot afford to buy goods and services and that itself discourages investment.

Investment, innovation and R&D need to be accompanied by sustainable demand. Since 2010, the government has been wedded to building a low-wage economy. Workers’ share of the GDP for the second quarter of 2018 stands at 49.3% of GDP, compared to 65.1% in 1976.

At the same time, the increases in gas, water, electricity, rents and travel costs have further eroded people’s purchasing power. The inevitable consequence of squeeze on household budgets has been the closure of shops such as Carpetright, Jamie’s Italian, Maplin, Marks & Spencer, Mothercare, Poundworld, Prezzo and Toys R Us, just to mention a few.

The Chancellor needs to find ways of boosting people’s purchasing power

This could be done by curbs on profiteering by utilities and train companies, raising the minimum wage and state pension, ending gender discrimination and pay rise for women and public sector workers, abolition of university fees, and ensuring that the tax-free personal allowances for income tax purposes match the minimum wage.

Sikka emphasises the urgent need for state investment in providing social infrastructure, transport, house-building, green industries, artificial intelligence, space and other industries and Hines proposes a Green New Deal infrastructure programme, offering jobs in every constituency.

In the Guardian, Colin Hines, convener of the Green New Deal Group, recently wrote about a GND infrastructure programme which would contribute substantially towards reducing Britain’s domestic carbon emissions and also address the serious threat of rapid and ubiquitous automation raised by Yvette Cooper.

Two major labour-intensive sources of local jobs were advocated: face-to-face caring in the public and private sector and infrastructural provision and improvements. Both are difficult to automate and can’t be relocated abroad.

Infrastructural provision and improvements are crucial to tackling climate change, prioritising energy efficiency and the increased use of renewables in constructing and refurbishing every UK building. In transport the emphasis would be on increased provision of interconnected road and rail services in every community, encouraging electric vehicles for private use. Hines added that the advantages of this programme include:

  • improving social conditions,
  • protecting the environment,
  • offering opportunities in every constituency,
  • requiring a wide range of skills for work that will last decades
  • and helping to improve conditions and job opportunities for “left behind” communities in the UK.

Sikka ends: “Neoliberals will no doubt respond with the usual comment ‘we can’t afford it.’ But can we afford stagnation, economic decline, social conflict and instability? The answer is a clear no. A government which can bailout banks with billions oquantitative easing, appease corporations and wealthy elites with tax cuts and guarantees profits through the Private Finance Initiative (PFI) and subsidies to film companies, can also find resources for economic welfare. If it chooses not to, it should make way for someone who can”.

 

 

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What is the main solution to the UK’s weak productivity growth?

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Chris Giles (FT) is examining why Britain is suffering from weak productivity growth. As part of his series, he wants to hear what readers think is the main solution to the UK’s weak productivity growth since the financial crisis of 2008. Share thoughts directly with him at ask@ft.com. Some may be published in a follow-up piece.

Prem Sikka, Professor of Accounting at University of Sheffield and Emeritus Professor of Accounting at University of Essex, who tweets here, has already published thoughts on the subject. Briefly:

UK company dividends are high & investment low

This lack of investment and innovation means that the country’s productivity is low. The output per hour worked in the UK is about 16% below the average for the rest of the G7 advanced economies. The UK productivity is around 27% below that of Germany – despite the UK labour force working almost the longest hours in the western world and the country is neither rebuilding its manufacturing base, nor developing new technologies.

He itemises the boardroom dominance of accountants:

Sikka then argues that short-termism, leading to the neglect of the long-term prosperity of companies and the economy, has been accelerated by the boardroom dominance of accountants.

Compared with other developed countries, UK companies are paying out the highest proportion of their earnings in dividends.

According to the Bank of England’s chief economist, in 1970 major UK companies paid £10 in dividends out of each £100 of profits – but by 2015 the amount was between £60 and £70. 

And at the same time as paying this large percentage in dividends many companies were downsizing labour and reducing investment, lagging behind the EU average:

Sikka asserts that the most effective way to disrupt the accounting-think prevalent in boardrooms is by appointing directors who are focused on the long-term – appointing employees and consumers so that they can challenge the obsession with short-term returns and promote investment in productive assets.

Giles quotes Lord Andrew Tyrie, new chair of the Competition and Markets Authority, who told companies in July to stop “ripping people off” or face the full force of the watchdog’s sanctions. His focus is mostly on regulated markets such as banking and energy, where companies are accused of exploiting vulnerable households by extracting a “loyalty penalty” if they do not switch suppliers.

Lord Tyrie told MPs during his confirmation hearing for the CMA in April that retail banking and auditing were parts of the economy that did not work in the interests of the public or productivity.

Scott Corfe, chief economist at the Social Market Foundation, a think-tank, claimed that pro-competition moves had some potential for raising productivity growth rates. He suggested that consumers should be switched between energy suppliers automatically after several years to stop companies exploiting customer inertia.

See this video: https://www.ft.com/content/ae25a5bc-9405-11e8-b747-fb1e803ee64e (possible paywall)

After noting that since the mid-2000s, British industries have become more concentrated, with fewer companies enjoying larger market shares, Giles focusses on this ‘one key question’:

Is inadequate competition contributing to Britain’s feeble growth in output per hour worked? 

 

We look forward to the next article in the series.

 

 

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