Connected Research

Union policy research in the 21st century

Archive for November 2009

Kroes confirmed in post

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The European Commission has confirmed the rumours of the shift of Neelie Kroes, the Dutch People’s Party for Freedom and Democracy politician, from the Competition policy directorate to a new Digital Agenda brief. Kroes will also become a Vice-President of the Commission (as will Viviane Reding, her predecessor).

The post is designed to provide a greater focus on digital issues from the ‘information society’ brief of the previous role. Much of the online comment about Kroes’s switch is directed towards the apparent downgrading that this is held to represent, pretty much in line with the lowest common denominator-type arguments that accompanied the appointments earlier in November of Herman van Rompuy and Baroness Ashton, but it’s sure that she will bring a tenacity and single-mindedness to the role. Consequently, she may well be a very good advocate for, dare I say, Digital Europe – although whether we need advocacy or practical action at this point to effect a Digital Europe is a moot point. As we’ve seen in the UK, digitalisation is a huge subject touching areas which are the responsibility of several different departments and bringing all that together into a coherent agenda perhaps demands more the skill of a consensus builder than one whose reputation comes with added steel.

Ms Kroes’s appointment – as with each of the members of the Commission – is subject to the approval of the European Parliament at individual hearings due to take place in January.

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Written by Calvin

30/11/2009 at 6:44 pm

France Telecom agreement on staff mobility?

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La Tribune, France’s business newspaper, has reported that France Telecom has signed an agreement on Thursday last week with four trade unions on its package of measures to deal with the work mobility pressures that have led to a spate of suicides amongst managerial grades in the company.

Trade union websites (e.g. CFTD, CGT and CFE-CGC) are as yet silent on the agreement and at least one – Federation Sud – has apparently refused to sign the agreement [registration required; limited viewing time] on the grounds that it doesn’t go far enough to restore employee confidence.

The report in La Tribune states that the agreement will establish a system of part-time working, without loss, for those three years from retirement including pay at up to 80% of the previous level. Some 14,000 people are eligible for the measure and, on the basis of an assumed take-up by 11,000 workers, will cost c. €700m (not the €1bn earlier reported). Measures also envisaged under the agreement include the setting up of career orientation interviews for employees aged 45 and over and guaranteeing access to training for employees in the same age group. On this morning’s Radio Classique, Stephane Richard, no. 2 at the company, is reported to have confirmed that next year, albeit without definitely ending the practice of mobility, it would not have the mobility scheme that has previously existed; that there would be no forced moves for anyone within three years of retirement; and that mobility would in the future be voluntary. In short: ‘C’est bien un nouveau France Télécom que nous voulons’ (‘It’s a new FT that we’re looking for’).

Looks like the close of a chapter which the French unions and workers in solidarity have done well to pursue. If indeed an agreement has been signed, it’s to be hoped that this ends the tragic spate of suicides in France Telecom which have occurred over the past twenty months.

Written by Calvin

30/11/2009 at 2:23 pm

NAPF 2009 survey: urgency required

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The National Association of Pension Funds has today published its annual survey of its members (press release), this year based on 300 responses covering schemes with 8m members and some £410bn in assets.

I’m usually a little wary of citing ‘doom and gloom’ stories in this context: they increase the pressure on good schemes, and particularly on members of good schemes, both in the public and the private sectors; and, in a situation of particular instances of consultations on closures, allow employers to claim they are moving ‘with the market’ (they would probably claim this anyway, but an evidence base always lends greater credence to such a claim).

Nevertheless, the NAPF is right to call for ‘decisive government action’ to support schemes remaining open. Some 82% of NAPF members want the government to issue more long-dated gilts and index-linked securities; this would reduce the pressure on schemes by reducing the value of their assessed liabilities, consequently moving them closer to a position of balance between assets and liabilities, and would provide some level of encouragement for those determined to stick by quality occupational provision. Joanne Segars, NAPF Chief Executive, has called on the government not to ‘miss the opportunity’ of its Pre-Budget Report to ‘make a difference’ to schemes in this way. Such a strong voice from the pensions industry is clearly worthy of detailed consideration.

Almost as high a proportion of NAPF members (79%) want greater flexibility in setting scheme indexation levels or in scheme normal retirement ages. I’m not convinced that changes to scheme indexation would make that much of a difference, frankly, but changes to schemes’ normal retirement ages would seem to be a pragmatic response to increasing longevity in retirement and, where carried out in full consultation with scheme members and representatives, guarding against the exploitation by employers of the current recession-hit environment, are at least worth considering as a means of keeping decent schemes open.

The alternative – almost overwhelmingly poorer DC provision – remains a substantially unattractive one, although one of the positive conclusions of the NAPF report is that DC contributions do not, at least at the level of the average, appear to have been cut in the recession – despite some well-publicised instances. (Perhaps it is a sign of the times that there being no change, and thus no cut, is a positive message.) Even so, contributions at an average of 11.5% (7.5% employer; 4% employee)  remain substantially below what is necessary to deliver an adequate pension in retirement, still less the level at which broadly comparable benefits to DB provision could be achieved – even in theory, given their shift in the risk of investment returns and poor annuities entirely to members.

For its part, Connect has also called on the government to do more to keep schemes open – not least in our prop to this year’s TUC (composited in Composite 10 with those of other unions and overwhelmingly supported by delegates). At the same time, however, it is also incumbent on companies to prove that any moves away from DB provision are not opportunistic cost cutting – something which could be achieved by instigating enhancements to their DC schemes which provide a real, and valuable, alternative. More (much more) needs to be done here at home, too.

Written by Calvin

27/11/2009 at 1:26 pm

TUC publishes thirteenth Recession Report

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The latest in the TUC’s series of reports on the recession – Moving towards a fragile recovery – is now up on ToUChstone.

Nicola Smith’s blog post is so titled given that falls in employment are showing signs of pausing while there may be some sign of a recovery in employment levels. Nevertheless, the labour market remains fragile:

– employment levels are still falling for young people under 24

– long-term unemployment is still rising

– there is a rising number of people in employment who are in more insecure forms of it – in temporary or part-time work. A proportion of this will be involuntary based on an inability to find fixed, full-time work. Earlier this year, the TUC suggested that one in nine part-time workers were involuntary, although current figures quoted in this report indicate a level rising to over 13%, while the proportion of involuntary temporary workers has risen to nearly one-third. This would be a natural development in a recession (while the proportion of involuntary temporary workers will be rising at this time of year anyway) and the increasing rates would seem to show that the recession (at least, in the labour market) has some course yet to run. The rise in part-time employment in the UK is also higher than the EU average.

This month’s special focus is on international comparisons and shows two main developments:

– the UK employment rate (69.6%) remains around five percentage points higher than the average rate across the EU, although the decline in the rate is, at two percentage points, also 0.1 points higher than the average. (The drop in the UK employment rate is actually the fifth largest, behind Ireland, Spain, Finland and Portugal.)

– schemes for short-time working remain more prevalent in other OECD economies and the UK spending on active labour market measures remains both small and well below the OECD average.

The report concludes that the UK performance during the downturn has been ‘average’. Certainly, it is close to the average figure on key labour market measures – a sign of the integration of the UK labour market with that of the rest of the EU and also an achievement given that the downturn in the UK has been sharper, and has lasted longer, than in many other countries. Thus it is likely that the government has indeed got some things right in all this. As the TUC warned earlier this week, the danger now lies in premature action to close the deficit and in stopping the stimulus package, thus choking off what fragile signs of recovery there already are.

Written by Calvin

26/11/2009 at 6:01 pm

Posted in Economic trends

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Kroes to be new telecoms Commissioner?

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Neelie Kroes, the existing European Commissioner on competition issues, is being strongly rumoured [subscription required; limited viewing time] as the replacement Commissioner for Viviane Reding when the Commission receives its long-awaited re-shuffling next month in time for the start of 2010.

It had been indicated back in July that Reding would not keep the telecoms post in the re-shuffle. The Commission maintains that a final decision on specific posts has not yet been made, so the story is still rumour although it does appear to have more than a degree of credibility.

The EU’s telecoms policy, including the establishment of BEREC (the EU-wide regulatory authority), is set in place for the foreseeable future, now that the compromise procedure agreement on the package of directives has been approved by Parliament, but Kroes, the Dutchwoman who has been in charge of the EU’s competition policy directorate for the last five-year term, is likely otherwise to bring a fearsomely strident approach to telecoms policy regulation, based on the hardline approach she has adopted in competition policy in the last period (which includes a facing down of Microsoft). This would seem to encompass BEREC, the appointment of whose key personnel is likely to be an early task for the new Commissioner.

Once she has been confirmed in post (if indeed she is), an early reminder to her of the reasons why the UK government is seeking to engender a statutory duty to take into account in regulatory decision-making the impact on investment as well as on competition might well be in order…

Written by Calvin

26/11/2009 at 1:44 pm

EU telecoms reform package approved by Parliament

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The European Parliament has approved, by a strong majority across all party groupings, the conciliation procedure agreement reached earlier this month. The reforms will enter into force next month and, following transposition by individual member states, become law across the EU by June 2011.

The principles covered by the package of directives are many but are most recently summarised in the Commission’s press release welcoming Parliament’s vote (where there is also a specific link to the 12 most important of the reforms in the package).

UNI, which works on behalf of 20m workers in the industry worldwide, worked hard and with no little success to gain a union voice and perspective concerning the main provisions of the package and their impact on workers’ rights. It has also welcomed the vote regarding the importance of investment in high-speed broadband services as a major factor in economic growth and employment, not least in a time of recession – as indeed does Connect. Nevertheless, now that the package is in place and regulatory certainty a little more established thereby, it is imperative that European countries and telecoms companies do indeed move swiftly so that its potential benefits as regards investment and jobs can be realised.

Written by Calvin

25/11/2009 at 7:17 pm

Vodafone seeks to close DB scheme to future service

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Vodafone announced yesterday that it is looking at closing its final salary pension scheme to future accruals from April 2010.

Connect is disappointed that Vodafone has made this decision, which will inevitably lead to members having to contribute more for and receive less in their pension. Nevertheless, the company has signalled its early intention to receive representations from the union on behalf of our members and we will be making strong representations to it.

We do welcome the company’s commitment to improve the standard of the defined contribution scheme.  It is our aim that the company will make improvements to this scheme sufficient to match the benefits that those who currently pay into the final salary scheme would have expected to receive. We will be putting constructive, detailed alternative proposals to the company to this effect as we strive to get the best possible deal for members. We have a wealth of experience of negotiating successfully with employers to deliver solutions in this respect.

Where Connect is recognised, our experience shows that we can have a positive, beneficial influence on company decisions of this type. The message is also clear that there is no better time to be in the union so, if you’re not, join us!

Connect will be holding a meeting for old and new members in Vodafone this coming Thursday.

Written by Calvin

25/11/2009 at 3:03 pm