Institute for Public Policy Research
Institute for Public Policy Research
News Article | April 23, 2017
Whether it’s the gender pay gap, a lack of promotion opportunities or the demand from retailers to work longer shifts – often standing at checkouts for 10 hours straight – life can be tough for women in the shop trade. For mothers it can be even worse, whatever industry they choose and in whichever part of the country they look for work. A TUC report last year found there was an overall gender pay gap of 34% for full-time working mothers who were born in 1970 and had their children before the age of 33. The time out from work on maternity leave before they had established themselves in skilled or senior roles effectively killed their chances of advancement, or at best restricted them, the report said. A report by the Institute for Public Policy Research this month found that the cost of childcare had risen to the point where some parents in low-income families effectively “pay to work”. The thinktank blamed a lack of support under the current system of tax credits as much as it did spiralling nursery charges. The report said a woman with a partner and two children who works fewer than 16 hours a week and earns the government’s “national living wage” of £7.50 an hour would see her childcare costs overwhelm her earnings, leading to a net loss. This situation is also common for women on higher hourly rates when they live in high-cost areas like London. The IPPR said the capital had the lowest maternal employment rate in the country and urged mayor Sadiq Khan to lobby the government for extra subsidies to plough back into childcare facilities. Metro mayors due to be elected next month in Manchester and the West Midlands will find parents in their areas facing similar difficulties. The Joseph Rowntree Foundation asked last year whether self-employment was a possible route out of low-paid work, particularly for women. It found the government needed to put in place much more support before people with lower skills – such as former BHS workers – could make the leap. It also highlighted research by the Social Market Foundation that revealed four out of five low-paid workers remained stuck in low pay even after 10 years in self-employment. But a study by NatWest suggested that while overall interest in starting a business has risen this year, having fallen to a historical low in the run-up to and aftermath of the Brexit vote, the gender gap remains firmly in place. Its research revealed that men are still significantly more likely than women to want to set up their own business. Sixteen per cent of men say that they want to start their own business compared to 12% of women, the majority of women saying they were discouraged from doing so because of a lack of inspiring role models.
News Article | April 15, 2017
Ask an economist or a technology expert and they will happily tell you that decades of data reliably show automation has created more jobs than it has destroyed. Far fewer of us now work on farms, for example, thanks to super-efficient machines that do the bulk of the work. Such technology has boosted productivity and, with it, living standards. As a result, more people work in leisure industries such as hospitality or hairdressing, serving all those people with higher disposable incomes and more free time. So far so good. And were the pattern to continue, one could envisage the realisation at last of the prediction made by John Maynard Keynes in 1930 that the working week would eventually be cut, perhaps to just 15 hours. The problem with this rose-tinted view of automation, however, is its focus on big averages that take little account of individuals’ experiences. Sure, the number of job gains for the whole of the UK may well be higher than the number lost to technology. But that is little consolation to someone who loses their job in a Midlands car plant to a robot and discovers most of the new openings are far afield in the coffee bars and hotels of London. Nor do studies of what has gone before allow for the fact that the pace of technological change will probably be quicker in the future. In other words, evolutions that took place over previous decades may well have been gradual enough for most people to find new ways of making a living, with varying degrees of difficulty. But faster and more widespread technological changes in the future are unlikely to be so easy to adapt to. For governments, this imposes a pressing need to step in and ensure the rise of the robots is not accompanied by a further rise in inequality. As tempting as it may be to pour money into boosting automation in return for the long-awaited boost to productivity and headline economic growth, doing so without having a clear plan for retraining displaced workers would cause untold harm to millions of individuals. As the Institute for Public Policy Research points out , some workers are far more vulnerable than others to automation. It highlights particular risks for low-skill sectors and warns that the robot revolution could widen Britain’s already entrenched north-south divide. The thinktank rightly calls for an urgent increase in investment in education and retraining and for funds to be prioritised to help regions far away from the capital that most need help equipping people to adapt as automation shakes up their workplaces. If the government fails to act, the result could all too easily be a spike in unemployment and poverty in places with the lowest skilled workers – a very high price to pay for a bit of average productivity growth.
News Article | April 21, 2017
Wanted: an undergraduate to take a full-time position with a major international fashion retailer. The job will last for a year. The pay? Zero. This fantastic opportunity, available only to those with independent means, wealthy parents and access to free accommodation, was advertised this week by US-based fashion chain Urban Outfitters. The company, which has 25,000 employees worldwide and last year reported earnings of more than $200m (£155m), wanted students to work for free as interns in photographic studio production and styling at its London office. The ad said the year-long, full-time placement was open to undergraduate students and would be entirely unpaid, although the company would cover travel costs – but only those incurred in central London. Anyone journeying in from suburbia would have to foot their transport bill themselves. The chain reported earnings of $218.1m last year, meaning it made about £19,000 in profit every hour of the year. Campaign group the Sutton Trust warned that these advertised roles are likely to be the tip of the iceberg because many positions are offered on an informal basis, often through well-connected family members. “Unless you have private means, or have access to family accommodation, you simply have no chance of taking up an unpaid internship,” said director of research Conor Ryan. Urban Outfitters is certainly not alone in looking for free labour. Unpaid internships are part of a growing trend that, according to critics, gives people from wealthy families an unfair leg-up in their careers. Fashion house Paul Smith and global advertising group Publicis are among other firms offering unpaid internships. Last month, the sandwich chain Pret a Manger offered 500 16- to 18-year-olds a week of unpaid work experience – giving the company the equivalent of nine people working free for a year. Their only reward was to be free food. However, the company backed down within hours of the Guardian reporting its plan. Fashion house Paul Smith, whose founder was knighted by the Queen in 2000, offers at least three unpaid positions, including a six-month placement in its press office, for which only travel and lunch expenses are paid. The company, which said last month that pre-tax profits more than doubled to £6m, did not respond to requests for comment. Fellow fashion designer Vivienne Westwood has previously come under fire for offering five unpaid internships, which are still being advertised. Publicis Media, part of the multibillion-pound French advertising and public relations group Publicis, is currently looking for a German-speaking intern who will receive only lunch and travel expenses. The firm’s parent company, Publicis Groupe, recorded an operating profit of £1.1bn last year. The company said it pays interns the London living wage of £9.75 an hour if they are with the company for three months or longer. But a spokesman said the whole advertising industry needed to introduce more paid internships: “We believe as an industry we can strive to do more.” The concept of the free shift is not confined to the fashion and media industries. The UK arm of French industrial group Dassault is offering a six-month placement for “a high-performing undergraduate” or MBA student. The company did not return a request for comment. The Sutton Trust’s Ryan suggested that an unpaid role could cost someone who does not live in London about £1,000 per month. “If you’re closing off internships by pricing young people out of them, you’re seriously harming social mobility and reinforcing the nature of those who get into top jobs across the professions,” he said. He said interns should ideally be paid the living wage as defined by the Living Wage Foundation – £8.45 per hour or £9.75 in London. At the very least, he said, they should receive the national minimum wage of £7.05 for under-25s and £7.50 for older workers. Labour MP Justin Madders, a member of a cross-party group on social mobility, said companies who did not pay interns for long periods of work were guilty of exploitation. He said: “It sounds like these companies’ business model is predicated on getting people to work for nothing. Let’s call it out for what it is, it’s exploitation.” Madders said universities should “look carefully” at whether unpaid placements were worthwhile and distance themselves from companies that ask people to do a “proper job” without paying for it. In an emailed statement, Urban Outfitters defended its approach: “Unpaid internships are legal under UK law, as long as the intern is a student at an accredited college or university and will be receiving academic credit for the internship.” Ben Lyons, co-director of Intern Aware, which campaigns for interns to be paid the minimum wage, said: “Unpaid internships exclude the vast majority of young people who can’t afford to work free, and the government needs to take long-overdue action to crack down on then.” A report by the Institute for Public Policy Research (IPPR) thinktank earlier this month warned that poorer young people are missing out on jobs because firms increasingly require candidates to work for nothing. Unpaid internships are legal if they are part of a placement attached to a university course, in which case they are limited to a year. However,, if an intern is classed as a worker, they will normally be due the national minimum wage. However, the Institute of Directors, which represents company bosses, warned against forcing employers to pay interns. Seamus Nevin, head of employment and skills at the lobby group, said the IoD encourages firms to pay interns “appropriately”. But he added: “We would fear that obliging all employers to pay interns might prove counterproductive.” The social mobility commission, chaired by former Labour cabinet minister Alan Milburn, has also called for a ban on unpaid internships on the grounds that they penalise young working-class people. But so far there is little sign of that happening.
News Article | May 2, 2017
"The current corporate income tax raises very little revenue," said Kotlikoff. "But it creates burdens for business, distorts investment decisions, and encourages American companies to invest overseas, leaving U.S. workers behind." The House Republican plan would replace the 35% tax on corporate profit with a 20% tax on sales, after deducting investments, wages and the cost of inputs. The proposal, developed by House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady, has been criticized for creating large deficits to give tax cuts to the rich. But the study finds that the total tax package (corporate plus personal income tax reform), if it succeeds in attracting dramatically more investment, pays for itself – by eliminating deductions and loopholes and creating enough new taxable income to offset the effects of lower tax rates. "The proposal is definitely not a giveaway to the rich," said Kotlikoff. "Under the new tax regime, the distribution of resources would be almost as progressive as it is today, even as everyone enjoys higher income." Kotlikoff believes the current corporate income tax mainly falls on workers, whereas the reform would shift that burden to owners of capital. For that reason, corporate tax reform is the most progressive part of the proposal. "The House Republican tax plan would replace a tax on labor with a tax on wealth," he said. "This is something every Democrat should support." In contrast to the House proposal, the economists criticized the outline of a tax reform by President Trump, which appears to create a loophole for the self-employed and appears to favor imported goods over domestic production. In doing their analysis, Kotlikoff and Auerbach are using: Led by Dr. John C. Goodman, the Goodman Institute for Public Policy Research (GIPPR) is a nonprofit, nonpartisan public policy research organization that promotes private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, and entitlements. Visit www.goodmaninstitute.org. To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/economists-like-the-house-republican-tax-plan-but-criticize-trumps-version-300449733.html
News Article | April 17, 2017
There is plenty to admire in the government’s plans to beef up apprenticeships, funded from a levy that came into force this month on all companies with a payroll of more than £3m a year. The scheme will provide an extra 3m apprenticeships, which the government believes will help fill the skills and productivity gap that dogs the British economy. Everyone, from the CBI to the TUC and the main parties, has signed up and wants it to succeed. But it is coming in helter-skelter, with important details unresolved, and it is going to be bolted on to a system that needs much deeper change if it is to deliver genuinely higher skills and social mobility in Sheffield and Newcastle as well as in London. The biggest flaw is that, like so many other government initiatives, this latest attempt to boost the number of apprenticeships could have been designed to be gamed. Experience has surely shown by now that setting a target, generating the cash, and launching the scheme before systems of monitoring and assessment are up and running is an open invitation for employers to cheat. So there is nothing to stop them, say, rebadging existing training or other professional development programmes, or offering low-skill apprenticeships in business administration or customer service. Employers complain that the levy is a tax by another name even though their contribution can be reclaimed, with a Whitehall top-up of an extra 10%, as long as it goes on apprenticeships. More problematic is that since most of the levy will be raised in London, it will be spent in London – not so good for Manchester, say, or Liverpool. It is also being levied on the public sector, which can ill afford it. Most apprenticeships on offer now add little by way of an employment premium for the apprentice, while employers are reluctant to teach transferable skills for fear of losing their investment. That might account for the wide range of apprenticeships on offer, from animal care and health and beauty to earth sciences and biotechnology. Colleges with years of experience, and sometimes big investment in facilities for off-the-job training, have been rejected from the scheme for what they feel are spurious reasons. Meanwhile, one core difficulty is outstanding: a lack of esteem, characterised by the idea that apprenticeships are for other people’s children. Teachers are much more familiar with the path students need to follow to academic qualifications. That means many students who might have benefited from access to technical and vocational courses at 14 have to wait until 16, when they may have entirely lost their enthusiasm for learning. Ministers will be familiar with the critical analysis that has come from bodies such as the Institute for Fiscal Studies and the Institute for Public Policy Research. They should remember that quality almost always trumps quantity: consistency of purpose and targets that prioritise added value and user satisfaction matter most. At the very least, the government must recognise that numbers are the least useful outcome to measure. Scale back the ambition. Great strides in understanding weaknesses in Britain’s vocational and technical education have been made through Lord Sainsbury’s report on 16-plus educational choices and the Holman investigation into career guidance. There is a lot of goodwill behind apprenticeships. Don’t risk it all on a single easy-to-cheat target.
News Article | April 15, 2017
A leading thinktank has urged the government to spend billions of pounds helping poorly skilled workers in the less prosperous parts of the UK cope with the threat of the looming robot revolution. The left-leaning Institute for Public Policy Research (IPPR) said in a new report that those most at risk from automation were concentrated in low-skill sectors of the economy and were least able to adapt to change. More than 10m jobs in the UK – a third of the total – are thought to be at risk from automation within the next two decades and the IPPR said the scale of the challenge required urgent action. There was also evidence to suggest that the impact of automation would be geographically concentrated and so widen the north-south divide. The IPPR research said that in four sectors alone – retail, hospitality, transport and manufacturing – 5m jobs were at risk, adding that a particular concern to ministers should be industries ripe for automation with a high proportion of workers least able to adapt. “In wholesale and retail for example, there are over two and a half million jobs with a high potential to be automated, and three in four workers do not have a degree-level qualification and may lack adaptability,” the report said. The IPPR called on the government to introduce a retraining allowance of up to £2,000 for those replaced by machines, and for the newly created apprenticeship levy to be turned into a £5bn-a-year skills levy offering special help to the regions furthest away from London. “Britain can’t afford to ignore the huge changes that will transform our labour market in the coming years,” said Joe Dromey, senior research fellow at the IPPR. “If we don’t retrain Britain’s workforce with the skills they need for the future we are likely to end up with a society where a small number prosper while many are left behind. “This doesn’t mean everyone going to university, far from it, but it does mean a much greater focus on supporting adults to retrain and up-skill, rather than focusing only on young people.” The thinktank noted that adults who had left full-time education without GCSE-level qualifications were almost twice as likely as graduates to be unemployed a year after being made redundant – making them especially in need of help to retrain. The IPPR said its analysis showed that jobs in London and the south-east were more resilient to automation than those in the rest of the country. “Whereas 39% of jobs have a high potential for automation in London, 47% are at high risk in Yorkshire and the Humber and the West Midlands, and 48% are at high risk in the north-east and Northern Ireland.” The thinktank said the £2,000 retraining allowance should be paid to workers who lacked A-levels or their equivalent, with better qualified workers eligible for up to £1,000 for retraining provided they matched the amount with their own contribution. The cost of £164m a year could be recouped by reducing the tax free allowance for redundancy payments, the report added. It said that the skills levy should be set at 0.5% of the payroll for employers with more than 50 members of staff and 1% for those employing more than 250. A quarter of the £5bn a year raised would be allocated to a regional skills fund. Clare McNeil, associate director of work and families, said two-thirds of the workforce of 2030 – when the impact of automation is expected to be fully felt – had already left full-time education, and this made it vital for the government to ensure the workforce could keep pace with technological change. “The starting point for government should be those industries with both a high proportion of jobs with the potential to be automated, and a high proportion of workers who are low-skilled,” she said.
News Article | May 26, 2017
Clever computers that learn on the job could recast Britain's job market - for better or worse. What are the parties vying for power in the general election saying on the subject? Twenty-nine-year-old Lee Hayhow is the third generation of his family to work as a lorry driver, following his father and grandfather. He is proud of his job. "I've always enjoyed lorries and driving. I trained as a professional driver. It is a profession. "You're almost your own boss - in charge of that vehicle. I always do it to the best of my ability. It's a good feeling." He estimates it costs £3,000 to train as a heavy goods vehicles (HGVs) driver. Mr Hayhow's employer, O'Donovan Waste Disposal, paid for this, but not all firms do, he says. And he would be delighted to see the next generation of Hayhows - his two young daughters - follow his career path. But by then, the decision may not be theirs to take. Lorry driving, like many other jobs that help power the British economy, could be facing a huge shake-up. Advances in artificial intelligence (AI) - a field of computer science in which machines are taught to carry out tasks that require human traits of thought or intelligence - have led some to predict a knock-on catastrophe for jobs. Nowhere is the exponential growth of AI more apparent than in the race towards self-driving vehicles. But AI doesn't stop at transport. There have been stark warnings about its impact on the jobs market as computer programs are honed to perform a number of roles, including call centre work, banking and paralegal responsibilities, retail and catering tasks, and journalism. Up to 46% of jobs in Scotland could be at risk within the next decade, the Institute for Public Policy Research Scotland recently claimed. Accountancy firm PwC predicted 30% of existing jobs in the UK could be "at high risk of automation" by the 2030s. Calum Chace, author of Surviving AI and the Economic Singularity, foresees "quite a lot" of unemployment caused by the takeover of technology "in a decade and a lot in two decades". "The industrial revolution was mechanisation and humans had something else to offer - cognitive skills. This time around machines are coming for our cognitive jobs," said Mr Chace. Others, though, predict a huge economic dividend. Consultants Accenture estimated AI could add about of £654bn to the UK economy by 2035. One influential voice talks of old jobs making way for new ones. But these new occupations cannot be taken for granted. "The absolute nightmare for me would be that we're applying this technology, we're displacing jobs as a result of it - which will happen - but what we're not doing at the same time is creating all the jobs in computer science, in data analytics, in software code writing," said Juergen Maier, chief executive of Siemens UK, in an interview with the Guardian. All of which leaves Britain's next government with a quandary - continue to invest heavily to support Britain's fledgling AI industries, in the belief they will foster greater efficiency and productivity, and new jobs, or safeguard the rights of existing workers? Thanks to the general election manifestos of those vying to take power on 8 June, it's possible to get an idea of how primed our politicians are for the AI future. In its 2017 manifesto the Conservative Party asserts Britain is "leading the world in preparing for autonomous vehicles," although in reality others are further ahead. The Lib Dems note the "advent of robotics and increasing artificial intelligence will also change the nature of work for many people". They say the government "needs to act now to ensure this technological march can benefit everyone and that no areas are left in technology's wake". Its solution is to provide more support for digital skills training and businesses/tech hubs in the sector. The Conservatives also commit to establishing "institutes of technology" and pledge to a long-term goal of investing 3% of the UK's GDP in research and development. Labour's Tom Watson, Shadow Secretary of State for Culture and Media, told the BBC there is "no doubt" automation and AI will "change most people's jobs". In response, he has set up an independent Future of Work Commission which is due to report in the autumn. "We want to understand the implications of new technology on work and make achievable recommendations about the most pressing challenges and opportunities of the future," he said. UKIP's manifesto doesn't mention AI or automation, although it has pledged to scrap tuition fees for degrees in technology, engineering and mathematics. The SNP's manifesto had not been published at time of writing and it did not respond to a request for comment. However there is considerable denial about the AI revolution among some of the workers potentially on the frontline - not least the lorry drivers. Despite the apparent success of the European Truck Platooning Challenge in March last year, in which convoys of automated lorries (with humans on board just in case) drove from Sweden, Germany and Belgium to Rotterdam in Holland, the Road Haulage Association said its members were "deeply sceptical" about whether driverless lorries would arrive on the roads in the next 10 years. Despite this, Jack Semple, director of policy, admitted "if it works, particularly in HGVs, there is huge potential for savings. "You eliminate not only driver costs but also the restrictions on vehicle movement that come from drivers' hours regulations." "It's too intricate, the job that we do," he said. Calum Chace fears that people who share Mr Hayhow's views are in for a shock. "When they start seeing cars driving around with no one driving them, people will realise how impressive computers are," he said. "If we don't have a plan, people will panic."
News Article | May 28, 2017
A little over a century since Ford’s Model T first allowed the average American to drive their own motor car, the manufacturing giant is threatening to take them away from the wheel. Or at least the appointment of a new chief executive, drawn from its autonomous cars division rather than the motor manufacturing mainstream, might suggest. Those reading the runes from Detroit see the elevation of Jim Hackett, an industry outsider who runs the smart mobility unit at Ford, as another significant step forward into a future where driverless cars become the norm. How imminent that future is remains up for debate. Certainly, there is great confidence among the manufacturers that the technological capability is around the corner – and they have ploughed in billions in investment. Ford itself should not be seen as emblematic of the 20th-century petrol past: it has, less noisily than some, set up its own billion-dollar labs and artificial intelligence projects. But perception can count for a lot with investors: Ford’s stock market valuation has dipped and – despite their huge disparity in global sales – the car giant has recently suffered the indignity of being overtaken by upstart Tesla in terms of stock-market value. Hackett, regarded as a “futurist”, is the kind of leader that the current Ford chairman – four generations down the line from the original Henry – sees as vital to the next step, bridging the gap between Silicon Valley and Detroit at a time when the experiments of the tech giants are threatening their future. The opportunities for Ford in an autonomous future are legion, but remain deeply uncertain. A wholesale revolution in transport could see a world clamouring for new, repurposed vehicles. But the concept of ownership is also likely to change: autonomy and connection could mean fewer cars needed, and fewer traditional consumers persuaded of the merits of having their own Ford parked on the drive. Meanwhile, society can hope for safer roads and greener, cleaner electric vehicles: it makes little sense for the champions of autonomy to trumpet fewer road deaths while still poisoning humans with dirty air. However, generations brought up on the hollow promise that increased automation could bring greater leisure might be sceptical of the claims for an autonomous future. While there is great appeal in the idea of reclining with a drink inside one’s Ford Fiesta, circa 2030, oblivious to the congested M25 the car is safely navigating, the sliproad to this nirvana may be bumpy. Witness the travails of some of Tesla’s staff, in the pioneering factory in Fremont, reportedly suffering all too human problems as their billionaire visionary boss, Elon Musk, ramps up production. Will autonomy bring more freedom? Possibly, but it runs counter to the prevailing mood, where politicians appeal to the public with promises of taking back control. And it would be difficult to dismiss as simple luddites those drivers who just see another form of employment poised to disappear. Hackett was described by the Financial Times as Ford’s new “philosopher-in-chief”, in an industry that is having to reimagine its product and future consumers in radical ways. The putative roadmap to a world where vehicles are all capable of full autonomy, negotiating every aspect of every journey, is thought by most to be at its most hazardous halfway along. The point at which the driver can allow most – but not all – functions to be conducted by the car, and the roads are still shared by humans and machines, is where most pioneers in the field – and insurers – foresee trouble. Ford has been reported to be focusing its energies on vehicles one step beyond this, a car where the human driver is all but redundant. That vehicle is likely to exist in four years. The challenge for the motor industry’s philosophers is how to get those who will have to share the road with it ready for its arrival. They are the bookmaking industry’s cash cows. Fixed-odds betting terminals (FOBTs) are controversial machines that let punters stake £100 every 20 seconds. And bookies now suck 56% of their revenue – more than £1.8bn a year – from these electronic casino machines, according to the Gambling Commission. That means each machine brings in nearly £53,000 a year. Of course, that money does not simply disappear out of the economy. The taxman takes a chunk – about £400m at last count. The Association of British Bookmakers says this money would be at risk if a government review, due within weeks, recommends that maximum stakes are cut. This would also, they say, force the closure of high street betting shops, leading to job losses. But this argument assumes no positive effect at all from stake reduction. A recent study by Landman Economics concluded that FOBTs are actually a drain on the economy, even when their tax contribution is taken into account. (Although it should be said that the report was commissioned by an anti-FOBT group, the Campaign for Fairer Gambling, which bookmakers say has links to the casino industry.) The report’s author, Howard Reed, former chief economist at the Institute for Public Policy Research, is no casino shill. He has calculated the net effect of the machines to be a £1.3bn loss to the Treasury. There are also indirect costs such as police callouts when punters smash machines – such a common occurrence that CCTV footage of such incidents is easily found on YouTube. Insiders expect the government to respond to public concern by reducing FOBT stakes, albeit not to the £2 maximum promised by both Labour and the Liberal Democrats in their election manifestos. But if that happens, bookmakers will have only themselves to blame. Instead of meeting critics halfway or proposing solutions, they have engaged in a PR war, deciding that attack is the best form of defence. That is looking less and less like the smart bet. The month must be May, because there’s another revival plan under way at Marks & Spencer, and another chief executive trying to explain why it isn’t going well. A year after taking charge at the retailer, Steve Rowe blamed weakening sales on a generally weak clothing market and a reduction in discounting. There was another serious worry too. Marks & Spencer posted a decline in food sales – they were down 2.1% in the first three months of this year, although this was partly the result of the later timing of Easter. With consumers now facing a cash squeeze, clothing and food retailers cannot afford to miss a step. M&S must up its game, moving away from former boss Marc Bolland’s focus on increasing profit margins towards giving shoppers a better deal on quality, style and price. Middle-aged women have little choice if they want stylish clothes, so if M&S can finally provide, Rowe won’t need to make any more excuses.
News Article | February 15, 2017
There is a question that was never put to the leaders of the campaign for Brexit and has not, as far as I’m aware, been put to the prime minister since her conversion to the cause. It is this: what will you do on the morning of formal separation from the EU that you could not have done the day before? What restored freedom, what action hitherto proscribed by the tyrannical bureaucrats of Brussels, will you indulge as the sparkling English wine is uncorked? Bend a banana, perhaps. Or catch the Eurostar to Paris and savour the sensation of no longer having the automatic right to work there. Oh! Pleasant exercise of hope and joy! … Bliss it will be in that dawn to be alive. Right? Brexit enthusiasts will complain that my question is unfair. Objections to EU membership were all about democracy, sovereignty and long-term economic opportunity: not pleasures that can be consumed overnight. And while that might be so, it is also true that people tend to vote for things in expectation of tangible benefits. A weekly dividend of £350m for the NHS, for example. So the unlikelihood of quick gratification for leave voters is a problem. Theresa May identifies a deeper imperative to Brexit than was written on the referendum ballot paper. She hears a collective cry of rage against the economic and political status quo, requiring radical change on multiple fronts. So, in parallel with the prime minister’s plan for a “clean break” from the rest of Europe, Downing Street is thinking of ways to address grievances that generated demand for Brexit in the first place: stagnant wages; anxiety that living standards have peaked and that the next generation is being shafted; the demoralising experience of working all hours without saving a penny. Government thinking on these issues has so far yielded a modest harvest. Last week’s housing white paper was meant to address a chronic shortage of homes by nudging councils towards quicker approval of new developments. Last month saw the launch of an industrial strategy, embracing state activism to nurture growth in under-resourced sectors and neglected regions. Last year May appointed Matthew Taylor, formerly head of Tony Blair’s policy unit, to lead a review into modern employment practices – the decline of the stable, rewarding full-time career and its replacement by poorly paid, insecure casual servitude. A notable feature of this non-Brexit agenda is how closely it tracks arguments made by Ed Miliband in the last parliament. The former Labour leader had a whole thesis about the structural failings of British capitalism and how it corroded people’s confidence in the future, leaving them anxious and angry. His focus on the “squeezed middle” anticipated May’s promise to help those who are “just-about-managing”. Miliband’s calls for state intervention in failing markets were derided by the Tories as socialist delusion at the time, but he opened rhetorical doors through which May is now tentatively stepping. Last week’s housing paper even used a forgotten policy that Labour had launched in 2013 – a “Use it or lose it” threat to developers who hoard land without building on it. Meanwhile, Downing Street has taken a close interest in the commission on economic justice set up by the Institute for Public Policy Research, a thinktank that provided regular policymaking services for Labour in the days before its capture by Corbynism. The commission was recently invited to give a presentation to May’s leading policy advisers inside No 10. Were it not for Brexit’s domination of political debate, May’s eschewal of conventional left-right dividing lines – her willingness to jettison Thatcherite orthodoxies – might have attracted more notice. But then, as the old Yiddish saying goes, if my granny had balls she’d be my grandpa. The idea that there is some parallel realm of politics that May can develop and for which she will be remembered alongside her EU negotiation is delusional. Timid little steps on housing, industrial strategy and job security are not going to get the prime minister to the promised land of fairness and opportunity in time for Brexit day. And she insists on a diversion to set up more grammar schools along the way, despite nearly every expert in the field warning that educational selection closes more avenues to social mobility than it opens. Even on immigration the government cannot meet expectations raised by the leave campaign. There will still be new people arriving because businesses will insist on a capacity to hire from abroad. Millions who arrived in Britain over recent decades, and their children born as British citizens, will stay because the country is their home. Even the most draconian border regime cannot restore the ethnic homogeneity for which some nostalgic Brexiteers pine. At some point someone is going to have to level with the country. Much of what leave voters were promised is unavailable because the EU was never responsible for a lot of things that made them angry. The dawn of Brexit promises no significant freedom or opportunity that wasn’t there the day before. It isn’t a message that ex-remainers can deliver, for all the reasons that scuppered their campaign last year. It sounded patronising before the referendum and the tone isn’t improved by bitterness in defeat. None of the original leave campaigners will dare admit their dishonesty in making Brussels the scapegoat for every conceivable social and economic ill. There is no point expecting Boris Johnson or Michael Gove to embark on a self-critical journey of public-expectation management. Far more likely they will be drawn deeper into the old lie: someone must be held responsible when Brexit does not unblock the sluices of wealth and opportunity; when the milk and honey refuse to flow. The obvious candidates are foreigners and fifth columnists – EU governments that negotiate in bad faith; alien interlopers who drain public services; unpatriotic “remoaners” talking the country down. The question then is whether the prime minister will go along with that game. She has managed so far to sustain the pretence that dealing with the failure of Britain’s economy to share its bounties fairly and quitting the EU are kind of the same thing. If it turns out that they aren’t, and one ambition obstructs the other, who will she blame?
News Article | February 24, 2017
Ministers should establish a new energy commission to spur on construction of power stations because successive governments have failed to encourage enough fresh power capacity in the UK, according to a House of Lords report. Subsidy-backed growth in renewable energy projects, such as windfarms, has deterred the construction of new conventional power plants, the economic affairs committee claimed. The peers envisage the new energy commission would oversee auctions where all technologies, including fossil fuel power plants, competed for guaranteed electricity prices. The auctions would cap carbon emissions. At present the government only allows low-carbon power, such as windfarms and new nuclear power stations, to compete in auctions for such deals, known as contracts for difference. The influential cross-party group of peers concluded that successive governments have got their priorities wrong on energy policy by giving priority to carbon emissions cuts – a statutory duty under the Climate Change Act – over keeping costs down and keeping the lights on. The report has sparked an angry response. Robert Gross, director of the centre for energy policy and technology at Imperial College, London, said: “The term ‘post truth’ has become over-used. Yet it would be possible to take all the evidence the committee presents and tell a completely different story: there’s been huge success in growing renewables and reducing emissions from the power sector.” Lord Hollick, the committee’s chair, said: “We are critical of the drift that’s taken place over the last 15 years or so, which has delivered on the decarbonisation agenda but very much at the expense of consumers paying 58% more than they were in 2003. On the affordability front we haven’t looked after consumers.” However, as the report acknowledges, most of the price increases came from higher gas prices, not the 10% added by renewable energy subsidies. The peers, who include the former chancellor Norman Lamont, and a former head of the civil service, Andrew Turnbull, said security of supply should become the key aim of energy policy, above decarbonisation and cost. “Low-carbon but chronically unreliable electricity is not acceptable. Similarly very cheap prices at the expense of frequent shortages would be unacceptable,” the report says, which also claims fossil fuels have remained cheaper than renewable sources. But Paul Massara, the former chief executive of npower who now runs the renewable energy firm North Star Solar, said the committee was simply wrong to say fossil fuels were always cheaper than renewables, and condemned the report as “backward looking”. Darren Baxter, a researcher at the Institute for Public Policy Research thinktank, said: “A failure to keep the pace up with decarbonisation, as suggested in this report, would be a disaster for the north [of England] and its growing low-carbon economy.” Hollick told the Guardian that the government had micromanaged the energy market and did not need to interfere as much. He said the government “should now allow the energy commission to move forward, to run auctions, to fill the gap and to build a properly balanced [energy system]”. Hollick denied the report was anti-renewables. “Exactly the opposite. We see renewables very much as the way forward,” he said, arguing that more public money should go into R&D in renewables and energy storage. The committee also urged the government to publish its plan B if the Hinkley Point C nuclear power station, which is expected to provide 7% of the UK’s electricity from 2025, is delayed or even cancelled. Hollick said the biggest surprise during the committee’s inquiry was the “fragility” of the government’s nuclear ambitions, which envisage new nuclear reactors in Somerset, Suffolk, Anglesey and Cumbria. “It is imperative that the government publishes it contingency plans for how it will make up the capacity due to be provided by these plants in the event one or more does not succeed or is delayed,” the report says. Hollick said he expected the government’s energy back-up plan to be made up largely of new gas power stations and offshore windfarms. A spokeswoman for the Department for Business, Energy and Industrial Strategy said: “Keeping the lights on is non-negotiable. Our top priority is making sure UK families and businesses have secure, affordable energy supplies.”