Fifteen Scottish firms are among more than 350 UK companies to have been “named and shamed” by the UK government as national minimum and living wage offenders yesterday. Andthat lenghty list could have been even longer – HMRC is currently investigating more than 1,500 open cases. Continue reading Mininimum wage abuse employers named and shamed
Government fury over Lords revolt
Chancellor George Osborne has said he will act on concerns about the impact of tax credit cuts after peers forced the Westminster government to think again last night – but he has vowed to press on with changes designed to slash billions from the country’s welfare bill.
In a dramatic night the House of Lords defeated the government in two votes over the controversial legislation, forcing the government climbdown.
The Chancellor has now agreed to offer ‘transitional help’ for those hundreds of thousands of people affected by cuts – but the government was angered by the defeats in the unelected ‘other place’ is now considering a review of Lords conventions to address what is sees as ‘constitutional issues’.
The proposed cut to tax credits is the most controversial piece of legislation introduced since the Conservative government’s election in May.
Tax credits were introduced by the last Labour government to help low-paid families. There are two types: Working Tax Credit for those in work, and Child Tax Credit for those with children.
Tax credits are gradually being included within Universal Credit, which is currently being rolled out across the country. Under the government’s plans, the income threshold for receiving Working Tax Credits and Child Tax Credit is due to be cut from April next year.
4.5 million people are currently eligible to claim tax credits.
Campaigners and respected think-tanks argue that the proposed tax credit cuts would deprive low-income workers of up to £1,300 a year but the Westminster government says the cuts are essential to tackle the UK’s massive deficit. It says most claimants will be better off when other changes, such as the introduction of the new national living wage, are taken into account.
Tax credits were worth around £2 billion to Scottish households in 2013/14, with two thirds of support directed at low income working families.
Scotland’s Social Justice Secretary Alex Neil called for for the UK Government proposals to be ditched in a letter to the Secretary of State for Work and Pensions earlier this week.
Me Neil said the UK Government should urgently rethink tax credit changes which will punish families and push even more children into poverty and urged the UK Government to rethink its plans to cut tax credits which mean households with the least money will face the biggest losses.
Mr Neil said: “Cutting tax credits is a thoughtless approach which may save the Treasury money in the short term but will have heart-breaking long-term consequences that could rebound on other public and charitable services.
“Tax credits can be a lifeline for families on low incomes that rely on them to get through daily life, put food on the table, heat their home and pay their bills.
“Removing this vital support from thousands of families will widen the gap in inequalities and push even more people into poverty.
“The UK Government’s plans are a clear attack on low income working families and those families must be protected as a matter of urgency.
“The Scottish Government has made clear its opposition to these changes and I urge the UK Government to reconsider the severity and timing of these changes and make changes before the Welfare and Work Bill reaches its next legislative stage, so that the poorest households in receipt of tax credits can be protected from this fall in their incomes.
“This shows why we need more social security powers through the Scotland Bill and why, we will ensure our approach to social security will be based on fairness and that people are treated with dignity and respect.”
‘Low pay is a moral scandal in our country’ – Mark Lazarowicz MP
Mark Lazarowicz MP is supporting Scottish Labour leader Jim Murphy’s plan to address the problem of low pay by offering employers tax rebates when they increase their staff’s pay to the living wage of £7.85 per hour.
Under the plans, employers would receive a tax rebate of up to £1000 for every low paid worker who gets a pay rise.
The average rebate would be £445, meaning that if every low paid worker across Scotland was given the living wage, business would get a windfall of over £180 million.
•a 25% fall in absenteeism
•80% of employers believing the living wage has enhanced the quality of the work of their staff
•66% of employers reporting a significant impact on recruitment and retention within their organisation
Over 400,000 Scots are currently paid less than the living wage – with an estimated 39,000 in Edinburgh alone – and Scottish Labour argues the living wage is best for business and best for fairness.
The North & Leith MP said: “Low pay is a moral scandal in our country and it is also holding our economy back. This plan to extend the living wage could lift thousands of Scots out of low pay. We could give a pay rise to as many as 39,000 workers in Edinburgh alone.
“Edinburgh City Council has already led the way by becoming a living wage employer so it is committed to paying all of its staff at least the living wage. Local businesses will see a bonus too, with £17 million available for businesses in Edinburgh.
“The research shows that absenteeism and staff turnover go down whilst performance and morale go up. It means a happier, more efficient workplace.
“A lot of businesses in Scotland aren’t turning over millions. They are on the sharp end budgeting month to month, they might want to give a pay rise to their staff but the conditions aren’t right.
“That is why Scottish Labour has a plan to convince these businesses to pay the living wage. We will use make work pay contracts to incentivise better pay for staff – and better performance for business.”
New report shows growing demand for emergency food aid
More than 160 groups and organisations are now providing emergency food aid in Scotland. The figure is in a new report from the Poverty Alliance which states changes to the social security system and the introduction of sanctions, as well as low pay and insecure work are some of the main factors behind the growing need for emergency food.
The Cabinet Secretary for Social Justice Alex Neil launched the report at a food bank in his Airdrie constituency yesterday.
The Scottish Government has now provided the Poverty Alliance with £28,941 to carry out further work with emergency food providers. This will enable the Alliance to work with those providers to take forward research findings and to focus more strongly on the causes of food poverty and work towards ensuring people get the help needed to move them away from reliance on food aid provision.
Mr Neil said: “The Poverty Alliance report perfectly demonstrates the impact of UK welfare changes. It is unacceptable that so many have had to resort to foodbanks. Emergency food aid is not a sustainable response to the issue of food poverty and its underlying drivers and it cannot become an established feature of the welfare system in Scotland.”
“We have seen previously in figures from the The Trussell Trust, that there has been a shocking increase in food bank usage. This speaks volumes about the real poverty in our society when people can’t feed their families without help and support from food aid organisations.”
The Poverty Alliance report follows figures from The Trussell Trust which shows a rapid and dramatic rise in the number of people accessing emergency food aid in Scotland.
The Trussell Trust has reported a 12 fold increase in usage of emergency food aid in just three years – in 2011/12 5726 people in Scotland accessed food aid, while in 2013/14 that figure was 71,428.
The Poverty Alliance report concludes that more effort should be concentrated on how emergency food aid providers can better connect people with mainstream support services. Providers working in close partnership with other services have been shown to offer better support to those in need, connecting them to the advice and support required to address underlying issues which have led them to access emergency food aid in the first place.
Director of The Poverty Alliance Peter Kelly said: “We need to build on the good work that food aid providers are already doing. Volunteers are providing help to people experiencing real difficulties in often complex circumstances. There is a need to develop partnership working between emergency food aid providers to share ideas, experiences and good practice.
“In the longer term we need to ensure that we are developing policy solutions that address the root causes of food poverty. The support from the Scottish Government will help the Poverty Alliance ensure that those who are on the frontline tackling food poverty are able to contribute to finding these solutions.”
The Trussell Trust Scotland Network Manager Ewan Gurr added: “It has been a pleasure to work alongside and support the research carried out by our colleagues at the Poverty Alliance and we appreciate the consistency of the Scottish Government as they explore creative ways to tackle food poverty in Scotland.
“The voluntary sector, largely, has an openness to exploring fresh ways in which we can enhance the level of support people are offered. We welcome the report and believe it is important for us, as well as other food providers, to digest the findings. It has always been my ultimate desire that our foodbanks are places where dignity is restored, hope is revived and the support is comprehensive and robust.”
To help food aid providers develop a better understanding of the range of support available for users of emergency food aid and identify additional support, the Poverty Alliance has developed a web based resource to assist those delivering emergency food aid better link with mainstream services such as Citizen’s Advice Scotland as well as with other information and links to key support services at www.foodaidscotland.org
Just how real is the economic recovery? For some, the future’s certainly looking brighter but for many more life continues to be a daily struggle …
The economic recovery in Scotland is now becoming more embedded, Scotland Office Minister David Mundell said yesterday. Commenting on the latest Scottish Chambers of Commerce business survey, Mr Mundell also stressed that there was further work to be done.
Mr Mundell said: “As today’s Scottish Chambers of Commerce survey and other recent business surveys confirm, optimism amongst Scottish businesses continues to grow. Key performance measures have reached levels not seen since 2007 which is leading to more and more Scottish businesses looking to recruit new staff.
“The manufacturing sector continues to show robust growth with investment at its highest level in six years and export orders increasing for five consecutive quarters.
“As part of the UK, Scotland is doing well. Whilst our economic recovery is becoming more embedded there is still much work to be done. The Budget set out the next stage of our long term economic plan, making it easier for Scottish businesses to invest, to take on new staff and excel on a global stage.”
With business confidence rising, The Scottish Chamber of Commerce sees a brighter economic future for Scotland, The business organisation released their Business Survey results for the first quarter of 2014 yesterday.
“The hard work and determination of Scottish businesses is yielding positive outcomes for the growth of Scotland’s economy. All the indicators in this survey point to sustained economic growth as key sectors increase investment to expand activity, boosted by higher levels of business optimism”, said Scottish Chamber of Commerce Chief Executive Liz Cameron.
“Investment intentions of Scottish businesses are encouraging with the manufacturing industry showing superb results with higher levels of investment than at any time in the past 6 years and robust growth in export orders shown by a consistent increase over 5 consecutive quarters. Whilst investment levels in the construction sector remain low, for only the second time in 5 years investment has not declined, and over 70% of businesses in the sector have either maintained or increased commercial and domestic orders compared with the last quarter. Promisingly, almost 90% of construction businesses surveyed expect employee numbers to remain the same or increase in the next 3 months and less than 14% reduced employment in the previous quarter.
“Higher levels of business optimism in construction, wholesale, retail and tourism is a positive signal for continued growth, as all sectors reported higher levels of confidence in Q1 2014 compared with the same quarter last year.
“However, despite these positive indicators, challenges still remain. The retail industry is expecting a decrease in profitability in 2014 which may point to stalled consumer confidence and seasonal patterns, but benefit may be drawn from positive growth in the tourism sector as confidence levels among hotels remained high and a rise in the use of conference facilities was also reported.
“The issue of skills shortages is becoming more prominent as businesses look to expand and invest. Businesses in the manufacturing sector are reporting difficulties in recruiting skilled & technical staff and the tourism sector are also reporting difficulties in recruiting managerial staff and chefs. It is vital that the organisations responsible for the development of skills provision, actively work with the business community to ensure employees are provided with the skills required to succeed.
“The buoyancy and optimism of Scottish businesses is to be commended but Governments in Scotland and the UK must facilitate opportunities for businesses to access affordable finance, particularly as cash flow remains a pertinent issue for businesses in construction and manufacturing. Alongside this, efforts to export internationally must be strengthened by policy makers to enable Scottish businesses to take advantage of global trade opportunities.”
However other senior figures believe the latest figures don’t tell the whole story and that much still needs be done – particularly for the lowest paid.
Responding to the latest Labour Market and GDP statistics Scottish Trades Union Congress (STUC) General Secretary Grahame Smith said: “These figures include some more positive news on the Scottish labour market but confirm that recovery remains very slow. As some focus on the level it is important to stress that the employment rate – a significantly more accurate measure of the health of the labour market – remains fully 3.5% below its pre-recession peak.
“Youth unemployment continues to stagnate at a high level with the unemployment rate for 16-24 year olds falling by only 0.1% in the year to December. We also know that far too many of the jobs that are being created are low paid and insecure whilst the number of those needing more hours at work to make a decent living remains far too high.
“STUC is not unduly concerned by the fact that Scottish GDP growth in the last quarter of 2013 was much lower than for the UK as a whole. We expect growth to catch up in the subsequent quarter. Far more concerning is the overall lack of evidence of economic rebalancing in Scotland and across the whole of the UK.”
And earlier this week The Trussell Trust, the UK’s largest foodbank network, reported that over 900,000 adults and children have received three days’ emergency food and support from Trussell Trust foodbanks in the last 12 months, a 163 per cent rise on the previous year’s numbers. The charity says that despite signs of economic recovery, the poorest have seen incomes squeezed even more than last year and more people are being referred to foodbanks than ever before.
The Trussell Trust’s Chairman, Chris Mould, said: ‘That 900,000 people have received three days’ food from a foodbank, close to triple the numbers helped last year, is shocking in 21st century Britain. But perhaps most worrying of all this figure is just the tip of the iceberg of UK food poverty, it doesn’t include those helped by other emergency food providers, those living in towns where there is no foodbank, people who are too ashamed to seek help or the large number of people who are only just coping by eating less and buying cheap food.
“In the last year we have seen things get worse, rather than better, for many people on low-incomes. It’s been extremely tough for a lot of people, with parents not eating properly in order to feed their children and more people than ever experiencing seemingly unfair and harsh benefits sanctions.
“Unless there is determined policy action to ensure that the benefits of national economic recovery reach people on low-incomes we won’t see life get better for the poorest anytime soon.
“A more thoughtful approach to the administration of the benefits regime and sanctions in particular, increasing the minimum wage, introducing the living wage and looking at other measures such as social tariffs for essentials like energy would help to address the problem of UK hunger.”
