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Union policy research in the 21st century

Archive for the ‘Economic trends’ Category

PPF index shows a slight slip

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The Pensions Protection Fund published the PPF7800 Index today for the end of April, showing the state of health of the 7,400 pension schemes under its supervision.

The Index is currently showing a small net deficit, of £2.2bn, reversing March’s small surplus (£0.3bn). Given the growing turmoil in currency markets during April associated with the financial and economic situation in Greece and other small EU countries, something which was only capped this week with the agreement between EU finance ministers, a drop of the Index back into negative territory is not surprising but the small-scale nature of the drop was a surprise, and a particularly welcome one.

Some 69% of schemes were in deficit this month, more or less the same as the 68.5% in March, which seems to support the view that the picture is, essentially, little changed. Evidently, this remains an uncomfortable proportion of schemes in deficit, even if the overall net balance of assets and liabilities lends the view that the average scheme is not all that much in deficit. The total assets of these schemes reached £913bn, a drop of 0.2% over the month and an increase of 18.2% since April 2009; total liabilities stood at £915bn, a small increase on the month but a drop on the £961bn recorded in April 2009.

During April, the value of both assets and liabilities deteriorated, the latter by more than the former (hence the drop of the net figure into negative territory). Over the year as a whole, rising stock markets have added 16.4% to pension scheme assets, while rising bond yields have added only marginally to liabilities.

So, overall the picture continues to be encouraging, although the change in the actuarial assumptions underpinning the calculation of the Index in October last year continues to affect the figures. Caution remains necessary – pension schemes are far from out of the woods just yet.


Written by Calvin

11/05/2010 at 9:09 pm

May Day 2010

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Greetings on labour’s day of remembrance, solidarity, celebration and re-dedication.

Here’s three things that remind me of why May Day remains important to the international labour movement, and of what solidarity means in the new decade of the 21st century if it is to be more than just a slogan:

1. At home: the last weekend of campaigning before the general election and the next big effort to ensure the BNP doesn’t gain a seat in parliament on Thursday. Of course, HOPE not hate is actively campaigning in key target areas and its organisers still need your support. Solidarity means uniting against the fascists.

2. Internationally: the draft text of the EU’s Free Trade Agreement with Colombia has been dissected by the TUC. Solidarity means freedom of association, and free from the fear of death squads for standing up for the rights of ordinary people – yet the proposed FTA brushes this under the carpet.

3. In Europe: At the European Trade Union Confederation, John Monks’s May Day message was based on the need to stand shoulder to shoulder with Greek workers to demand social justice and that the EU act decisively to stabilise the situation. Building the European project demands strength, not vacillation; perspective, not short-termism. Solidarity means having the dream and the vision for a brighter, alternative future – and the courage to express what that is when the practical situation demands it.

A May Day worth celebrating: and achievements to be won to demonstrate in practice what solidarity means.

[6 May edit: the TUC has reported events from May Day celebrations around the world here.]

Written by Calvin

01/05/2010 at 9:00 am

Credit ratings agencies: the lessons of a children’s fable

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Some interesting pieces in the media today on credit ratings agencies, which appear, at least on the face of it, to have been produced pretty much without recognition of each other’s existence: on Peston’s Picks; at Citywire; and by John Gapper at the FT.

The consensus between the pieces appears to be largely that the agencies remain influential, not least in the context of their role in the current financial crises enveloping Greece and Spain, in spite of an inability on past form to recognise – in the gutter language of the day – a turd when they see one and to call as such. Shockingly, it also seems that the agencies were either uninformed (or else misinformed) of the full depth of the products they were rating, or else they simply did not understand them and did not care sufficiently to find out. Either way, I’d have thought that an ability to stand up and say, along with the child in Hans Christian Andersen’s fable, that ‘the Emperor has no clothes on‘ would have been a prime raison d’être for such an organisation – or better said, perhaps, that such an ability ought to be their most highly valued asset in the future. Economies deserve better.

The agencies’ collective ability to resemble the three  ‘hear no evil, see no evil and speak no evil’ – except at the bidding of their masters in the financial investment and speculatory world, of course – renders them ripe for reform by any government intent on tackling the financial abuses which have led to the current scandals and returning national economies to be run in the interests of the people.

Written by Calvin

29/04/2010 at 5:52 pm

Posted in Economic trends

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Budget 2010 – some reaction

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A series of articles giving a trade union reaction to yesterday’s Budget over at ToUChstone and some politics from Hopi Sen. Prospect members can also download a summary of the highlights here.

And some cider reaction over at Liberal Conspiracy – and a petition, too, of course. Not, methinks, a move guaranteed to win much support from the more hirsute members of the labour movement – but then, I can’t recall Alistair Darling ever had a time as a beard wearer within the Labour Party, as the reference in this story seems to prove…

Written by Calvin

25/03/2010 at 5:25 pm

Budget Day 2010

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ToUChstone, the TUC’s policy blog, has linked up with Left Foot Forward, Labour List and Liberal Conspiracy in the Progressives Liveblog of this afternoon’s Budget speech.

Click on the link on the right and join ToUChstone for commentary and debate on the Budget from 12 noon today, for coverage of Prime Minister’s questions, and then straight through into the Budget.

Meanwhile, the TUC’s pre-Budget statement calls for:

a Budget for growth, jobs and a better balanced economy that moves away from sucking up to the finance sector and instead invests in productive industries and green jobs,

The statement also calls for honesty in the continuing debate about public services and for politicians to spell out what they mean rather than hiding behind smokescreens and euphemisms.

As far as pensions are concerned, a debate which focuses on the facts rather than the myths would also be helpful.

Written by Calvin

24/03/2010 at 10:15 am

Recession Report No. 16

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The TUC’s last Recession Report was published yesterday and can be accessed via Nicola Smith’s post over at ToUChstone. The topical theme of this issue, in the week that saw International Women’s Day and the TUC’s 2010 Women’s Conference, as well as the launch of a specific TUC report on Women and the Recession, is the impact of the recession on working women. Inevitably, there is a degree of overlap between the two reports.

The headline labour market stats are that 2.457m people are out of work (more or less unchanged on the month and the quarter, but 448,000 up on the year), representing an unemployment rate of 7.8% (again, unchanged on the month and quarter but up by 1.4 percentage points on the year). Some 28.9m people are in work, representing an employment rate of 72.4% (down by 1.7 points on the year). The TUC remains concerned about the numbers of people who are working on a part-time and/or temporary basis involuntarily, and about long-term unemployment, both of which it sees as a sign of a continuing ‘serious weakness’ in the labour market.

Employment rates for both men and women have fallen during the recession but on a far smaller basis than in previous recessions, largely due to involuntary part-time working acting as something of a cushion. The proportion of women who are economically active (not necessarily in employment but looking for work) has also continued to rise in the recession, to a figure of 74.4% (the highest on record) – in contrast to previous recessions. The biggest barrier to female employment remains opportunities to balance work and family life: 41% of women who are inactive but who want a job are looking after a home or family.

The fall in the employment rate has been lesser for women than men, but this is a result of the predominance of women in the public sector, which takes around 40% of women nationally compared to around 15% of male workers. Consequently, large-scale public spending cuts are likely to give good reason to imagine that unemployment may well resume its upwards rise, and may well cause serious hardship to families where a second round of redundancies, this time predominantly amongst women, falls in areas of existing high unemployment.

Given that the public sector is also more likely to provide work-life balance arrangements, spending cuts may well see a reversal of the trend in women’s economic activity rates: representing another aspect of the social, as well as economic, disaster that such cuts would represent.

Written by Calvin

11/03/2010 at 2:00 pm

Posted in Economic trends

Tagged with ,

Robin Hood goes to Strasbourg

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The European Parliament yesterday debated a financial transactions tax via an oral question put up by Sharon Bowles, a Liberal Democrat MEP who chairs the Parliament’s Economic and Monetary Affairs Committee, followed by a debate on a formal motion.

The motion was, essentially, a shoo-in (the vote is scheduled for tomorrow), since it is supported by the four largest party groupings in the Parliament, including the Socialists & Democrats; the Greens – European Free Alliance; Liberals and Democrats; and the centre-right European People’s Party (which excludes those parties which are further to the right, including the UK Tories). Between them, these four party groupings control something like 80% of MEPs. Conssequently, such a wide cross-party consensus on the motion for debate adds tremendously to the power of what it calls for.

[Edit 11 March: the resolution was approved with 536 votes in favour – 87% of those voting.]

The motion recalls:

The importance of renewing the economic and social contract between financial institutions and the society they serve,

and seeks to remind G20 leaders of their:

Collective responsibility to mitigate the social impact of the crisis, both in their member states and in developing countries, which have been hard-hit by the indirect effects of the crisis.

The motion identifies the European Parliament behind the EU having its own strategy on a financial transactions tax to take to G20 summit meetings, and for the need to adopt a common position at the G20 on the issue based on:

The options as to how the financial sector should make a fair and substantial contribution towards paying for any burden which it has caused to the real economy or which is associated with government interventions to stabilise the banking system.

(Here, the motion cleverly borrows from the leaders’ declaration from the G20 meeting Pittsburgh last September – see point 16.) In moving towards the definition of such a common position, the motion urges the Commission to elaborate an impact assessment of the potential of a global financial transactions tax both to generate revenues as well as to stabilise markets (here, in particular, the oral question correctly approaches the issue from the perspective of assisting with the development of a much needed long-term orientation to the financial system); of the benefits and drawbacks of such a tax; and of the need for the tax to be sufficiently well designed to mitigate any side-effects.

The motion has been well thought-out and put together, and its powerful language belies the political disparities between the political groupings uniting behind the motion (where the product of establishing such a wide-ranging consensus is frequently anaemic language and commitments). Ultimately, it will provide a further contribution to the body of evidence, on top of that currently being put together by the G20, on what such a tax could look like, and achieve, and is to be welcomed. In this respect, it’s also a good sign of the value of MEPs and the work they do.

Clearly, it does not yet commit the EU to a policy on the tax; it simply asks the EU to investigate the case. Nevertheless, should the impact assessment come out favourably in support of a financial transactions tax, that will give greater power to the elbows of those arguing that the EU should adopt such a tax and would represent a significant, valuable and high profile breakthrough for financial transactions tax campaigners.

Written by Calvin

09/03/2010 at 4:40 pm