Tuesday, February 21, 2012 

The snobbery of a day's pay for a day's work.

There are few things that concentrate the mind of business quite like the threat of a boycott. When last week hundreds of people complained directly to Tesco at how it seemed they were offering a permanent job where the pay was just jobseeker's allowance and expenses, their initial response was to shrug it off and insist that regardless of the inaccuracy of this one specific advert, their involvement in the government's work experience schemes had resulted in 300 people getting jobs with the firm. Besides, their pay is "industry leading".

One temporary closure of a Tesco Express store later, and the company has changed its mind. Clearly not satisfied with the "assurance" from the Department for Work and Pensions that everyone who had taken part in the various work experience schemes had done so voluntarily, they've now put in place a parallel scheme where those who decide to come off JSA to take part will receive normal starting pay and a guaranteed offer of a job rather than just a guaranteed interview at the end of the four weeks. It remains to be seen how many will want to come off JSA only to face the possible prospect of having to reapply if it turns out there isn't a job after those four weeks, but it's clearly a massive improvement that came about purely because of public protest. Coupled with Tesco asking that those who decide to opt for the JSA work experience scheme should not lose their benefit if they fail to complete the four weeks, it's a significant victory.

No surprises then that the government ministers responsible for these plethora of potentially exploitative schemes, no doubt having been subjected to an ear bashing from those they thought they were helping out, have launched a counter-attack. First Iain Duncan Smith's underling Chris Grayling wrote a piece for the Sunday Telegraph, launching an assault on the messengers, with the BBC and Guardian lambasted for daring to provide work experience schemes themselves, and now the boss himself has penned a piece for the Daily Mail. Normally one would suspect that an aide would have wielded the pen, yet it seems so close in tone to Duncan Smith's occasionally bizarre pronouncements that it makes you suspect he wrote it himself.

From the very beginning Duncan Smith deliberately misses the point. No one who has written comment pieces or lengthy blog posts on the subject has suggested that the work experience being provided by the likes of Tesco or Poundland is not worthwhile, as long as it is genuinely providing experience that the person on JSA does not already have. There seems little reason to send someone who has already got significant retail experience onto such placements as Cait Reilly was when there is no prospect whatsoever of a job at the end of it. Rather, the issue is that highly profitable retailers are being provided with free labour by the government, courtesy of the taxpayer. Neither Duncan Smith or Grayling seems to think that this is objectionable. Judging by the increasing number of companies pulling out, or changing their involvement as Tesco has now done, they seem to have come to a different conclusion.

Secondly, both ministers are also convinced that these schemes are entirely voluntary when there is evidence to suggest that the base work experience programme is not. Overlooking the fact that if someone pulls out after a week without good reason (to digress slightly, I have to wonder if someone showing you their bollocks, as they did when I went on work experience while at school would be a legitimate reason for refusing to go back) they face having their benefit stopped for two weeks, the Citizens Advice Bureau for one lists the work experience programme as being compulsory. Similarly, Izzy Koksal writes of how those who refuse to go on work experience may find themselves quickly pushed onto the mandatory work activity programme, where anyone who fails to take part loses their benefit for 13 weeks. Much the same sanctions are in place for those on the work programme who refuse to work just for their benefit.

Having failed to convince that the work experience schemes aren't voluntary, he then engages in semantics over what can and can't be described as workfare. He claims mandatory work activity can't be compared to workfare schemes such as those in America as they are only short term, ignoring how a claimant can be put back onto an unpaid placement as many times as the Jobcentre decides is necessary. While he is right to say that MWA is entirely separate from the work experience programme, it seems likely that some of the same providers are involved. Tesco claim that they would never take part in a mandatory scheme, and it's true that one of the guidelines for those on MWA is that they should be doing something of "benefit to the community". It's completely opaque however just what work of "benefit to the community" the first 24,000 to be referred to the scheme have done (PDF): the contracts went to various companies, and whether we receive a drill down into where they were placed remains to be seen.

It's not then really worth responding to Duncan Smith's claim that "much of this criticism is intellectual snobbery". If a secretary of state wants to make himself look a fool by resorting to ad hominems, smearing his opponents rather than engaging with their criticism, that's up to him. Definitely worth challenging though is the oft repeated start in life for former Tesco CEO Terry Leahy, washing the floors of the supermarket. Less well known is that he subsequently got a degree in management sciences, something that helped him get a job in marketing with the company rather more than his brief stint with a mop.

The clue that the piece is Duncan Smith's own work comes with his sudden going off on a bizarre tangent about the X Factor. Well known as Duncan Smith's belief is that any sort of work is rewarding, even the most mundane, with it "setting you free" as he suggested, this isn't so much an attack on the concept of wage slavery as his setting up of another false dichotomy, between those who believe young people should "work only if they are able to secure their dream job" and those like him who believe in work as an end in itself. If we really wanted to get into this, we could more than point a finger at the Conservative supporting tabloid press that so promotes the unreality of the talent shows, although more as a distraction from the drudgery of everyday life than as a career path for the many. Far more eye-opening is the attitude of Duncan Smith, as opposed to that of the young unemployed; of the million among them without work, only a tiny minority could ever be painted as the kind imagining opportunity will come to them rather than other way around. The final insult is how he links this supposed belief with the influx of foreign nationals; rather than dealing with what went before, it would be good to know what he's going to do now beyond the limitations of the work programme and work experience schemes he so defends.

He alludes to how difficult this is when admits that "finding the right job for someone is not easy" and how "there isn’t always one simple route". No one is denying that in the right circumstances, work experience can be incredibly valuable. It must though be voluntary and tailored to the individual, without sanctions if it goes wrong or turns out to be unsuitable, at least on the first occasion. The potential for abuse, as there is currently, has to be addressed. Duncan Smith would be spending his own work time better if he renegotiated the programme rather castigating those who brought the problems to wider attention.

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2/21/2012 04:47:00 pm | |

Thursday, February 16, 2012 

The only way is Tesco.

(The only way is workfare doesn't work quite as well as a headline.)

In a way, it's a little odd that the issue of unpaid work has suddenly exploded in the way it has over the last 24 hours. The root of the furore, an advert on the Jobcentre website that advertised a work experience placement with Tesco where the wage was jobseeker's allowance plus expenses, mistakenly describing the "job" as permanent, is part of the government's sector-based work academies programme, a scheme that has been operating since at least last October. This is separate from the work experience programme that Cait Reilly and others have complained about in that it is entirely voluntary and it doesn't seem as though you can be forced onto it; it otherwise though looks exactly the same, in that if you pull out after the first week you may lose your benefit.

Indeed, the only real difference between these schemes seem to be the period of time the placement lasts. On work experience it can be between two and eight weeks; on the sector-based work academies programme it seems to be six; and on the far more objectionable mandatory work activity programme (PDF) it seems to be four weeks, although considering it seems as though you can be instantly placed back on MWA if you haven't found a job the scheme is potentially never ending. Crucially, it seems that regardless of the different names, the companies involved are all the same. Tesco, as John Harris wrote last year, is involved in MAW, as is Poundland, and both are also offering places on the other two schemes. This more than suggests that the work involved is also the same, which casts substantial doubt on the claim by the government for the "sector-based work academies" that the placement "will be tailored to help you prepare for an actual job vacancy". The specific carrot offered for those taking part in SBWA is a guaranteed job interview at the end, but this doesn't seem as promising once it becomes clear that when your placement is over someone on one of the other programmes is likely to take over.

Tesco in response have claimed that "in recent months 300 young people have got a job with us after work experience", which while seemingly reassuring is potentially nothing of the sort when they haven't provided figures for how many people have gone through the scheme with them. It also isn't clear whether those 300 have all been specifically on SBWA, or whether it also includes those on the other programmes we know Tesco is involved in.

The way this issue has emerged is slightly unfortunate in that there's the potential for a wholly voluntary scheme similar to SBWA to be beneficial for all concerned. Yes, it is objectionable for highly profitable high street retailers to be provided with what is in effect free labour courtesy of the taxpayer, yet if that's the sector the individual wants to look for work in and there is a real chance of a job at the end of it then the ethical dimensions can be overlooked. Far more problematic is the pure work experience scheme, where it seems as though personal circumstances are often ignored, and where the specific details of the programme are not always fully explained to those who express an interest. It simply doesn't make any sense to put someone who has plenty of retail experience into a placement with Tesco for instance, especially if there's not even an interview on offer at the end.

Or it doesn't unless all these slightly different dressed schemes are a subtle expansion of the workfare principles behind the mandatory work activity programme. Seeing as it looks as though those involved are the same partners, it's more than reasonable to reach this conclusion, and it looks even more damning with the announcement that those in the work-related activity group of employment and support allowance may well soon find themselves obliged to go on open-ended "work experience".

Put aside for a second the inequities of the state subsidising the likes of Tesco in this way, and it's worth looking at whether workfare actually, err, works. The DWP commissioned a study back in 2008 looking at how "work for benefits" schemes functioned in America, Australia and Canada, and the findings were stark (PDF). While there were "few systematic evaluations that isolated the impact of workfare from other elements of welfare-to-work programmes", the evidence there was suggested that the programmes could if anything reduce employment opportunities as it meant those on them had less time available to look for an actual job. Crucially, it found workfare was least effective in "weak labour markets where unemployment was high", or if you prefer, Britain in February 2012.

The mandatory work activity programme originated in Labour's last package of welfare reforms, and it's been eagerly adopted by the coalition. Those placed on it were meant to do work of "benefit to the community", but that definition is obviously being stretched to the absolute limit. If anything it's proving to be the exact opposite, as it seems what would be full-time or at least part-time positions are being filled by a succession of those working in one way or another just for their JSA. For those wondering how the government is benefiting if it's still having to stump up for JSA, we can look at the 2008 study again: it found there was a "deterrent effect", with many dropping out before the "workfare" element of their benefit began. While some of those may well have been the scroungers and malingerers we hear so much about, others are those who couldn't face the demeaning prospect of working for a pittance and would rather take their chances with charity or rely on friends and family. Combined with how making people work for their benefits polls well, this seems to be the reasoning behind expanding the programmes, as well as how it seems to be those offering the placements that cop the flak, rather than the government.

Always worth remembering is that one of the coalition's first acts in government was to abolish the Future Jobs Fund. Despite being characterised as another example of Labour's profligacy and reliance on the public sector, it provided a job for a full six months rather than weeks, something which looks far better on a CV, and it paid at least the minimum wage, giving those on it a semblance of independence, and so in turn they put money back into the economy. The best that can said for the non-voluntary work experience placements is they will help *some* of those on them to acquire skills they may previously have lacked. The reality is that the long-term unemployed need tailored help, which is both expensive and undermines the narrative from the government that all they need to do is brush up their CV, look harder or alternatively even lower their aspirations. When they won't even accept that there are not enough jobs to go round it ought to be seen that something is badly wrong, and these latest revelations bring that even further into focus.

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2/16/2012 10:27:00 pm | |

Monday, February 02, 2009 

Have we got tax for you.

It is, as the Guardian's leader on the subject suggests, rather easier to target benefit fraudsters and those without access to good lawyers than it is to investigate tax avoidance. The paper knows this from bitter experience: it last year accused Tesco of avoiding corporation tax to the tune of £1bn, only for it to discover after publication that it had mixed up corporation tax with stamp duty land tax, and that the real sum avoided was far less. The paper quickly admitted its mistake, but not before Tesco, running straight into the arms of Carter-Fuck, had issued not just a libel writ but also a claim for malicious falsehood, although Justice Eady, the bête noire of the tabloids, subsequently threw it out.

The other reason for the Guardian to be extra careful when reporting on tax affairs is that it has also publicly admitted to be involved in avoiding tax itself, or rather that its parent company, the Guardian Media Group, has admitted such. This came about through GMG's alliance with Apax Partners, a private equity group, when it purchased the magazine publisher Emap. Quite rightly, some are therefore suggesting hypocrisy on the Guardian's part to be so apparently outraged about tax avoidance when the newspaper itself also does it. In the paper's defence, it's one of the few companies that has openly admitted some of its tax arrangements, although how much of this was in relation to the Tesco affair is unclear, while Richard Murphy, of Tax Research UK, examined all the other large media groups and found that the Guardian paid the largest percentage of corporation tax of the lot. As Richard Brooks also points out, it would be far worse if the paper's own tax arrangements stopped it from investigating "the tax gap", or even worse, if it affected its stance on it. Hypocrisy can be alleged, but it seems doubtful that the News International papers will be investigating tax avoidance any time soon, just as the Sunday Times every year mysteriously excludes Rupert Murdoch from its rich list.

Richard Brooks' involvement is one of the signs of how seriously the paper is taking its investigation, presuming of course that Brooks is the same Brooks that also works for Private Eye and who has been one of the heirs to Paul Foot's throne. That Private Eye subsequently discovered that Tesco was indeed avoiding corporation tax, as the paper had alleged, doubtless helped.

Undoubtedly, as we plunge head first into a recession, the tax receipts, taken for granted during the boom, become ever more important and should become ever more scrutinised. Peter Mandelson's famous quote, that New Labour was relaxed about people becoming filthy rich, often leaves out its second half, that this was fine as long as they paid their taxes. Half the reason why it was left off is not just so it can be used to beat Mandelson and Labour with, but also because the government itself became fabulously relaxed about companies and the individuals behind them not paying their fair share of tax. The Treasury might each year during the budget plug a few of the loopholes which are discovered by the bean-counting firms and mercilessly exploited, but the real tale, as always, was shown in the honours list, which year after year was resplendent with the burghers of industry who saw it as their duty, both to shareholders and themselves, to reduce their tax burden. Probably the most egregious example was the knighthood awarded to Philip Green, the man behind the Arcadia group - this was despite him taking £1bn out of the company to pay himself, which he funnelled to his wife in Monaco, therefore avoiding having to pay any tax whatsoever. The other gob-smacking incident was the selling off of tax offices to the company Mapeley, which is based in the tax haven of Bermuda. According to the National Audit Office's report on the deal (PDF), this saved Mapeley in the region of £55 million that the taxpayer would otherwise have had paid back to into the public purse.

The completely secretive nature of the deals, as well as the highly complex nature of the avoidance schemes exists not only between the companies and those that draw them up, but also between HMRC and the companies. HMRC, possibly out of embarrassment, possibly out of the desire to keep the missing taxes due a secret, refuses to give a figure for how much they're being left out of pocket each year, although estimates range wildly from between £3.7bn to over £20bn. Part of this secrecy is because HMRC deals directly with many of the companies over exactly how much tax they intend to pay - individuals such as Mohamed al-Fayed have long had agreements with HMRC over the exact figures. This is of course in stark contrast to how other taxpayers who get into arrears are treated, and to how the aforementioned benefit fraudsters are subject to the equivalent of a 10 minutes hate every so often. Both rip off the public purse, but only one enters the public eye, while further establishing the idea that most of those claiming to be sick are in fact not.

Some will console themselves with the idea that although undoubtedly avoiding pay your dues is a bad thing, that the money would just be squandered anyway. The argument would be a lot less alluring if this government wasn't so determined to do the equivalent of pouring money straight down the drain, as it continues to do on the various disastrous IT projects, on ID cards and on the Olympics, to name but a few such schemes. At the same time, there are always other things which many of us would like to see extra money going towards, not least at the moment a more generous benefits scheme for those temporarily out of work, or additional funding for retraining. It could be used to pay off the extra debt we're taking on more quickly, so as not to mortgage another generation of ordinary workers. As could be expected, it has been those ordinary workers, such as those protesting outside Lindsey and walking out in solidarity across the country, regardless of the involvement of the far-right and the nature of some of the slogans used, that are now being hit hardest when it was unrestrained global market fundamentalism which created the mess and which has been bailed out. The least those responsible can do is pay their fair share - and closing down the tax havens and the avoidance schemes has to be one of the conditions of the recovery and subsequent re-regulation.

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2/02/2009 11:21:00 pm | |

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