Tag Archives: government

Retirement is a concept of the past

Opponents to the UK public sector strikes today are arguing that the public-sector workers all have fairly safe and secure jobs and get gold-plated pensions far higher than anything anyone in the private sector can expect. I heard on the radio this morning someone arguing that a teacher on £30k can expect a pension pot of over half a million pounds.

Supporters of the strike argue that there is a vast difference between the pension agreements of MPs and Whitehall mandarins and a frontline worker in a Job Centre. Also, they find it unfair that they signed up to a contract – that includes an agreed pension – and it is now being changed so they need to pay in more and work longer before seeing a penny. Public sector workers often argue that their pension is ‘deferred pay’ – they earn less in the present because they can get a greater pension.

There are examples supporting both arguments. It seems that never the twain shall meet. If you argue for reform, you are uncaring and not supporting the right of the public sector to expect the nice retirement they deserve for years of toil. If you support the public sector workers, you just fail to see the need for reform.

But isn’t the reality that retirement is no longer an option. It’s a dated concept. It’s something planned back in the post Second-World War era.

A male born in the UK in 1945 had a life expectancy of 63 years. A male born in 2001 had a life expectancy of 75. A male or female born today has a life expectancy of over 80 years (World Bank and UK Statistics Agency figures.)

With a retirement age of 65 in the UK, the state pension was designed to pay out a couple of years *after* the average male would have already died. Disregarding any tinkering with the retirement age and assuming it remains at 65 means the *average* person will have a couple of decades on state pension before they die.

If the state pension age had risen in line with life expectancy, people would not be able to claim a state pension until they are about 82 years old.

The unions don’t like this, and the employers (especially public sector) can’t face up to it either. The bottom line is that the post-war concept of retirement is not sustainable using the same methods to pay for it that worked 50 years ago. The entire system needs a top-to-bottom revision in both the public and private sector.

So the teachers can go on strike, and the government can hector them about needing to do something to help the reform, but the real reform is to wake up to the fact that we will all need to be working until later in life – unless you get rich early on and invest your wealth in paying for a future of leisure…
Car dumped in cemetery

Communism finished in West Bengal

It was always an anachronism in India. West Bengal ruled by a communist party for the past thirty-four years and always trying to bend and flex the limits of communist ideology so they might embrace the real world. Now the communist rule is over.

I remember being in Kolkata (formerly Calcutta) working on behalf of the West Bengal government a few years ago. They asked me to give a keynote speech at a conference and then do some consulting work focused on how to develop the local hi-tech services economy – IT and IT-enabled services.

I rose to speak to the conference knowing that the IT minister of West Bengal was going to speak immediately after me, but he had not briefed me on his speech and I had not been asked to brief him on mine.

My main thrust was that West Bengal should play to its strengths; the vibrant higher education community, the strong links between academia and industry, the sheer scale of educated young people…

I showed them that they have a unique proposition that is focused on highly trained resource. I explained that they should not try to ape other Indian states, such as Karnataka (where hi-tech Bangalore is located), and focus on offering low-cost labour into the growing call centre industry as it would not be a long-term opportunity for the region.

The minister stood up and the first image he presented described how much cheaper the labour is in West Bengal, compared to Karnataka, and how great this would be for call centres. The entire conference hall fell about laughing at him.

Embarrassing for me, and probably more so for him as it showed he was not really in tune with the business community and had not even taken the time to check what the speaker ahead of him was going to say.

But as I worked with the government there, one thing in particular intrigued me. The IT sector was declared a ‘special’ industry. The local government wanted to attract foreign investors so they decided that all the normal labour legislation would not apply to this one industry.

In West Bengal, strikes have always been common because workers often flex their muscles and refuse to work if they have a grievance with the management. In the IT sector, strikes were banned.

The minister smiled at me when he told me about this and declared that foreign investors have nothing to fear from the communist government, because of the ban on industrial action in the sectors they were trying to boost.

So I asked how the IT workers would get to work when the bus drivers were on strike, or how the computers would work when the power company workers were on strike, or how the workers could eat if the restaurant workers were on strike?

He couldn’t answer. He only gave some weasel words about IT staff sleeping in the office to avoid transport strikes, or companies bringing in food and using diesel generators to keep the lights on. None of it was a real solution and if I was a genuine foreign investor, I wouldn’t have been impressed because the government was trying to remain communist in spirit, yet also doing anything they could to attract foreign money to the region.

So the communists of West Bengal were never really communist in the sense of Plato’s Republic, they just liked the colour red. And Che Guevara T-shirts. West Bengal has joined the rest of us in the real world at last.

Jorasanko Mansion - Kolkata

Cadastro de pessoa física

The cadastro de pessoa física (CPF) is a bit like a National Insurance number in the UK, or a social security number. It’s your ticket to being a regular citizen with access to a bank account, a job, hospital treatment, and pretty much anything that a citizen – rather than just a visitor – would need.

I got mine this morning and it was a remarkably quick process. I had to get my passport translated into Portuguese, but armed with my passport and the translation – and the stamp in my passport showing that I am now resident in Brazil – I went to the government office. I waited for about ten minutes after handing over the documents, and then they gave me my number.

After masses of form-filling and bureaucracy to get my permanent visa I had expected the worst, but this was smooth and easy. I hope my next interaction with the government is as easy as that!

Next stop, off to HSBC to get myself a local bank account…
Ladybird on ATM

French government subsidises music

Why on earth is the French government subsidising music purchases?

They say it is to get people into the habit of purchasing music, rather than stealing it through online file sharing. Did any of the bureaucrats ever consider that French citizens might use up their free allowance and then return to file sharing?

The big issue with music is that we are moving from a world where the consumer paid for a physical recording (LP, CD…), to a digital download (MP3), to access only. That’s right – even the MP3 files on your iPod will seem archaic when the next generation of iPods allows you to choose an artist or song, which it then automatically streams.

Most new TVs are already Internet-enabled, you can flick through YouTube as you watch regular TV. Imagine once car stereos, home audio systems, and iPods are all geared up for constant Internet access? There is no need to ever own a physical music product – you just pay for a song as you play it or pay a monthly access fee allowing you all you want to play.

Spotify uses this model already. The one thing that prevents it becoming the norm is that playback devices are still not ready for streaming-only – most people using Spotify are still playing the songs on their computer. But it won’t be long. It’s common to see streaming jukeboxes in pubs now – a jukebox with every song ever recorded and released. And that is what we will all have at home soon, a sound system with access to every song ever recorded.

The future is how you purchase access to recorded music, not purchasing a copy of recorded music.

Charts will be based on plays, rather than sales, and artists will be (more than ever) focused on live performance, merchandise, and specialist products – like the 78rpm vinyl version of the new Elvis Costello album. Who can even play a 78 these days?

Music is entirely changing and for a government to waste tax-payers money on a scheme that encourages ‘legal’ digital downloads is outrageous.

Trocadero and Eiffel Tower

Don’t start blaming foreign students…

The immigration minister Damian Green has announced a crackdown on students entering the UK from overseas. The intention is to only allow the best and brightest students access to higher education in the UK.
What’s a shame is that this reform of the foreign student entry requirements is being dragged into a nationalistic debate over immigration – the focus being on the thousands of people who remain in the UK long after their course has finished.
Green said: “Why are they staying on? What are they staying on to do? This is part of a wider look we need to take at the immigration system.”
Why are they staying on indeed? Why doesn’t he ask some students to see what they say even as they being their course?
The UK is an attractive place to study. English is the language used for study and daily life, and even though the universities charge non-EU students a lot more than Europeans, a British education remains good value compared to American colleges.
Many students will come to the UK for all these reasons, plus they have a desire to find a job in the UK once they graduate. That doesn’t always happen, but by studying in the UK and having access to employers locally, it can be a strong possibility.
I can understand Green’s desire to control immigration – it’s a populist move – but I don’t think we should be frightened of graduates coming through the university system. Most graduates struggle to find decent work anyway because they have very little work experience, imagine adding the requirement for a work visa to that and you can see that it’s not an automatic gravy train for immigrants.
If Green really wants to target bogus immigration then he should steer clear of the universities and focus on the so-called ‘colleges’ that teach basic IT or English. The teaching quality of many of these colleges is highly dubious, yet a student can enrol on a course and get a visa to stay in the UK – allowing limited working hours.
It doesn’t help the student who might expect a decent level of education, or the UK job seekers who claim that migrants have displaced their jobs. Seek out the bogus colleges, but don’t tar all universities with the same brush – the UK reaps huge rewards from foreign students bringing their skills over here.

Lse library

On yer bike scroungers! Council tenants to get the boot…

The new Work secretary, Iain Duncan-Smith, has caused outrage by suggesting that the unemployed should move in search of work, directing his focus mainly at council tenants who occupy local authority property, claim benefits, and generally don’t do a lot – it’s reminiscent of former Tory minister Norman (now Lord) Tebbit and his famous ‘my old man got on his bike’ speech.

Tebbit is often misquoted, he actually said: “I grew up in the ’30s with an unemployed father. He didn’t riot. He got on his bike and looked for work, and he kept looking ’til he found it.” He was responding to a statement that unemployment naturally leads to riots.

Iain Duncan-Smith is the protégé of Lord Tebbit and that’s easy to see with these new plans about migration. When Tebbit left the Commons for the Lords, Duncan-Smith replacing him as MP, he is alleged to have said: “If you think I’m right-wing, you should meet this guy.”

But there is an issue of structural unemployment in the UK. Jobs are out there, but often the long-term unemployed are not living in locations where suitable jobs are available. What are the thousands of skilled workers  at the former Corus steel plant in Teesside going to do now – work in McDonald’s or deliver newspapers? Hardly fulfilling, rewarding, or exploiting the skills available.

There is already a system that allows people to swap their council home with tenants in another location, though why people in an area full of work might want to move someplace where there is none is beyond me. The unsettling thing about what the government is now proposing is that they want the power to force people to move in search of work.

That’s not like the romantic dream of the American migrant worker. It’s compulsion. And though I am all for the government trying to help people into work, I don’t think that charging up behind vulnerable people with a big stick is a very strategic appeoach.

Everyone wants to get rid of dole scroungers and the long-term sick claiming incapacity benefit and spending it in the pub – that’s a given – but this problem needs more thought than clunking Conservative proposals to force council tenants out of their home. What about their family and support networks? How will a single parent arrange child care in a new city, because they will need it if they are heading out to work fulltime?

I think the more intelligent response to this issue of work distribution would be to approach it with short, medium, and long-term proposals. In the short term, make it attractive for companies to create jobs away from the Southeast – offer tax incentives and grants to make it really worthwhile. Then for the longer term, the only thing that can make the people more mobile and more likely to find work in future is their education and skills. Give them training and let them find new work, don’t kick them out of home because it makes for a good headline on cutting costs.

Wasn’t there that story in the Bible about teaching a man to fish…?

Labour struggling

1984 all over again

It’s time for an emergency budget! Stop spending on everything!

Since the election in May and the formation of the coalition government there has already been two rounds of spending cuts – a quick announcement of £6bn of savings and a more recent tranche of £2bn.

But as we borrowed something like £180bn last year, this emergency budget is going to go deeper then anything anyone in the UK can remember – probably this is going to be harsher than the early 80s with Thatcher.

Yet I get a sneaking suspicion that the present government wants to whip up this feeling that times are hard so they can facilitate cuts right across the public sector, in the same way the public can support a war when they think there is an imminent threat of attack.

It’s a disaster. The previous lot were all wrong and don’t blame us for the cuts. It’s all their fault!
Sea of pennies at Rockefeller plaza