Business secretary hits out at City’s ‘ethics of wild east’ and sets out plans for consultation on tougher stance Vince Cable is to hold top-level talks with the City grandees who set boardroom pay in order to thrash out ways to end the “ridiculous” and “outrageous” levels of executive bonuses. The business secretary is also to demand more disclosure about bonuses and their link to company performance after hitting out at the “ethics of the wild east” in the City, which he said damaged the reputation of the UK. He set out plans to launch a consultation proposing a tougher stance on executive pay and will also convene talks with the directors who set pay and bonuses for top executives to seek ways to “intervene sensibly” to end the culture of “rewards for failures”. New research published by Merrill Lynch shows that the number of wealthy individuals in the world has reached 10.9 million – more than existed before the 2008 banking crisis. Their collective wealth, $42.7bn, has also topped the levels it reached in 2007, before the crash and recession sparked by the crisis. In a speech to an audience of leading City investors, the business secretary said: “It is actually outrageous that last year median earnings for FTSE 100 chief executives rose 32%, whereas the share index rose only 7% – and average employee pay rose by less than 2%, barely half the rate of inflation.” Average pay for the bosses of the top 100 companies has leaped to 120 times that received by an average UK employee from 45 times in 1998, Cable said. While he did not set out the proposals that will be published in next month’s consultation, among the ideas he is thought likely to be considering is a requirement that companies publish the multiple of the pay of its chief executive to the average worker. Cable also hinted that he was considering whether new rules to make public the size of pay deals awarded to bankers outside the boardroom – whose pay was hidden until this year – should be adopted more widely. In a sideswipe at his audience, comprising some of the City’s biggest investors, he said: “Ridiculous levels of remuneration are going unchallenged as the norm, when there is no clear evidence of a correlation with performance.” He criticised shareholders, who he said had not been challenging top pay, and companies which had not attempted to restrain pay. “Ultimately, there is no substitute for leadership from companies themselves and their owners … to be frank, I don’t see much evidence that remuneration committees have been living up to their responsibilities, or that major shareholders have been holding them to account,” he said. Risking a row with coalition partners in the Conservative party for proposing a more interventionist stance, the Liberal Democrat minister immediately faced criticism from Labour. John Denham, the shadow business secretary, said: “Vince Cable is finally responding to the issue that Ed Miliband has been raising for the past year. But Cable has a record of talking tough and failing to deliver on bank bonuses and excessive pay.” Ed Miliband, the party leader, has said a Labour government would require companies to publish the pay gap between their boardrooms and the average earnings of their workers. Labour introduced a vote on remuneration reports – the first one to be voted down was GlaxoSmithKline in 2003 – but, as the votes are not binding on companies, they are able to ignore them. Tesco, for instance, endured a 47% revolt against its pay deals last year, and is facing another rebellion at its annual meeting next week. The Association of British Insurers – whose event Cable had been speaking at – said: “As institutional investors we agree that good results should be rewarded, but we agree that it cannot be right to reward failure. This is why we have been tackling this issue. Investors have been tough on soft targets or shifting goalposts but we accept that this needs continued focus. We look forward to talking more to the government about this important issue.” Executive pay and bonuses Pay Economic policy Vince Cable Banking Work & careers Jill Treanor guardian.co.uk
Continue reading …Did you launch a racist, antisemitic rant? I can’t remember, Galliano tells French court
June 22, 2011 No Comment
Shocking nature of alleged outburst captivates France as fashion designer could face six months in jail The British designer John Galliano told a Paris court he remembered nothing of an alleged antisemitic, racist rant in a bar because of his triple addiction to alcohol, valium and sleeping pills. The flamboyant couturier, who faces up to six months in jail and €22,500 in fines, told the court he had been “pushed to the edge” by financial and emotional pressures. The case has captured France’s imagination, both because it involved a fallen British fashion star – Galliano was immediately sacked from the top job as creative director of Paris fashion house Dior – and because of the shocking nature of the alleged racist and antisemitic ravings by a supposedly inclusive designer in the heart of Paris’s historic Jewish district. Galliano, 50, was dressed in billowing black satin trousers, a black waistcoat, jacket and silk scarf, but no shirt as he arrived in court to face the charges of making “public insults” based on origin, religion, race or ethnicity . He stared determinedly ahead, composing himself, swallowing hard and clenching his jaw during evidence, but he looked frail after two months in an Arizona rehab centre. He is currently attending a daycare centre for recovering addicts in Switzerland. Under French law Galliano is not required to enter a plea. The judge asked Galliano about the incident on 24 February when a French couple having a beer outside a bar in Paris’s Marais district claimed he repeatedly insulted them with lines including “dirty Jewish face”, “fucking ugly Jewish bitch” and “fucking Asian bastard” . He replied “I have no recollection.” Asked why he couldn’t remember, he said had a three-fold addiction to alcohol, sleeping tablets and valium. He said there were many reasons for his addiction, including the success of Dior. He started drinking “in a cyclical way” in 2007. “After every creative high I would crash and the drink would help me to escape. At this point I had managed to turn creativity into a billion dollar business at Dior. Then the financial crash happened,” he said. He described having “two children”: Dior and his own label Galliano, owned by same group. To save them from the financial crisis, he had to sign deals with “businessmen” and branch out into a bewildering list of new lines, including menswear, kidswear, beachwear and perfumes. He described a manic schedule of working through the night then going directly to early morning starts on shoots, meetings and endless haute-couture fittings. In 2007, his assistant and closest friend, Steven Robinson, died and he lost a kind of “protection”. Galliano said: “With his parents, I buried him … then I went back to do my fittings. The same happened with my father’s death, I had to bury him and then come back that very night and work on the haute couture … I really didn’t take time to mourn.” Galliano said his body became so used to prescription pills, he increased his intake. “I actually can’t remember how many I was taking”. He said he needed sleeping pills to sleep but took them in the day, too. He went into rehab at the end of February after he was arrested by police following the alleged bar altercation. He said his reasons for rehab were various: “I started having panic attacks, I couldn’t go to work unless I had taken some valium.” Geraldine Bloch told the court she was sitting on a terrace at La Perle bar in February when Galliano sat a table near them, drinking a mojito, and quickly said: “Could you shut up please, I can’t stand your voice, fucking bitch,” before insulting her clothes, hair, thighs and make-up. She said he used the word “Jewish at least 30 times” including calling her a “fucking Jewish bitch” and “Jewish cunt”. She argued back at Galliano and refused to move table. Galliano’s driver came over and gave her a mobile, saying it was the designer’s lawyer trying to defuse the situation, but she refused to talk to him. She said Galliano had not seemed drunk but was acting weirdly. Her friend, Philippe Virgitti, told the court Galliano called him a “fucking Asian bastard” and threatened to kill him. He thought the designer used the world “Jewish” 10 times while insulting Bloch. He admitted threatening Galliano with a chair. The court also heard the case of another women who claimed that in the same bar in October 2010, Galliano had called her a “fucking ugly Jewish bitch.” Asked in court about a separate video in which he insulted a bar client and said “I love Hitler”, Galliano replied: “These are not views that I hold or believe in … I see someone who needs help, who’s vulnerable. It’s the shell of John Galliano. I see someone pushed to the edge.” The judges are expected to deliver a verdict at a later date. Several French anti-racist associations have also lodged civil complaints against the designer. John Galliano France Europe Angelique Chrisafis guardian.co.uk
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• Transport secretary says deal ‘sticks in the gullet’ • Departed chief executive warned over pay last year Transport secretary Philip Hammond has condemned Network Rail for handing former chief executive Iain Coucher a £1m payoff, warning that it will “stick in the gullet” of taxpayers and farepayers. The government-backed owner of Britain’s rail tracks and stations will stoke the row over public sector pay by announcing a payoff of more than £1m for Coucher on Thursday. Coucher stepped down as chief executive last year after a three-year reign that was peppered with complaints from trade unions and politicians about the company’s remuneration regime. Network Rail’s annual report, published on Thursday, will reveal that Coucher received just over £1m as part of a package that included a year’s pay in lieu of notice and a settlement related to the company’s long-term incentive plan. Fellow executives are also expected to receive sizeable payments under the plan. Hammond weighed into the debate on Wednesday in apparent fury that his public warnings last year over Network Rail bonuses had been ignored. He said: “This payoff will stick in the gullet of every farepayer and taxpayer who think they pay too much to use our railway. The payoff is based on his contractual rights but most people will feel it doesn’t sit well given the difficult times most families are facing. “I will be seeking assurances that this is the last chapter in the sorry saga of the old Network Rail as set up by Gordon Brown. We have made clear that any future incentive system should focus on rewarding exceptional and sustained long-term outperformance and be based on the principle that bonuses are not an automatic right.” Network Rail relies on the taxpayer for its funding and received £3.7bn from the Department for Transport last year in a financial arrangement that regularly exposes its executive team to pay rows. In 2010, Coucher received a salary and bonus package worth £1.25m, drawing an intervention from Hammond, who questioned whether it was “appropriate” for Network Rail executives to share more than £2m in bonuses when the rest of the population was entering a period of austerity. However, Coucher has consistently argued that Network Rail needed to reward managers charged with turning round a railway system that was on its knees when the company inherited Railtrack’s responsibilities in 2002 following the botched privatisation of the rail network. The announcement comes a month after Coucher was cleared of misusing public funds following an independent investigation. Antony White QC, an expert in asset tracing and employment law, was appointed by the company to investigate allegations that public money had been spent illicitly on perks. White severely criticised the “astonishing” behaviour of Peter Bennett, Network Rail’s head of human resources, who called an employee complaining of sex discrimination a “silly cow”. Network Rail’s chairman, Rick Haythornthwaite, has moved to answer concerns over the company’s governance by requesting another review. The review’s author, Saratha Rajeswaran, a former adviser to rail minister Theresa Villiers, said the company had a “real problem” with accountability to the rail industry and government, adding: “Network Rail has been insulated from real-time economic and political concerns – leading to criticisms that it is arrogant or out-of-touch with the reality for the industry, passengers, the government and taxpayers.” However, the review does not recommend radical changes to the governance of Network Rail, which is technically a private business as a company limited by guarantee, meaning that it has no share capital or shareholders. The role of the latter is performed by Network Rail’s 92 “members”, who are drawn from the transport industry and the public. The Rajeswaran review does not call for an enhancement of members’ powers over pay, instead leaving their role as a purely symbolic one with a vote on the remuneration report at the annual meeting. Nonetheless, the review warns that bonuses will continue to be a “contentious” issue. Meanwhile, Network Rail is now beginning formal discussions over its next funding settlement under its new chief executive, Sir David Higgins, former chief executive of the Olympic Delivery Authority. The company is under pressure to reduce costs following an independent report into rail industry expenditure by Sir Roy McNulty, former chair of the Civil Aviation Authority, who has recommended cutting £1bn from the sector’s annual expenditure by the end of the decade. Nonetheless, Network Rail is optimistic that it can secure a funding settlement for 2014-2019 that is similar to the £30bn it won for 2009-2014 at the height of the previous government’s public spending largesse. Network Rail Executive pay and bonuses Travel & leisure Transport Dan Milmo guardian.co.uk
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China’s best known artist, looking thinner after 81 days in detention, says ‘I’m fine … I’m on bail. Please understand’ After 81 days in detention, China’s best-known artist, Ai Weiwei, returned home a considerably thinner and noticeably quieter man. “I’m fine. I’m out,” the 54-year-old artist told the Guardian in a telephone call shortly after his release on bail. “I’m back with my family. I’m very happy.” The state news agency, Xinhua, said police had released him “because of his good attitude in confessing his crimes” and a chronic illness. Speaking from his home in north Beijing, the usually outspoken artist said he could not comment any further, adding: “I’m on bail. Please understand.” Ai’s sister Gao Ge said: “I’m very, very happy … we thank everyone, including our media friends, for all their help and support so far.” His mother, Gao Ying, told NPR that the family “won’t sleep tonight”. The artist’s disappearance on 3 April sparked international condemnation, with political leaders calling for his release and sustained protests throughout the art world. He vanished after he was stopped by officials at Beijing airport, where he was due to board a flight to Hong Kong. Officials later said police were investigating him on suspicion of economic crimes, although police never formally notified his family of his detention, which they are supposed to do within a day of seizing a suspect. The Xinhua report on Ai’s release said: “The decision comes also in consideration of the fact that Ai has repeatedly said he is willing to pay the taxes he evaded, police said. The Beijing Fake Cultural Development Ltd, a company Ai controlled, was found to have evaded a huge amount of taxes and intentionally destroyed accounting documents, police said.” Ai’s works include helping design the Olympic Bird’s Nest stadium in Beijing and last year’s Sunflower Seeds installation in Tate Modern’s turbine hall. But he has become as well known for his activism as for his art – although he suggested it was not easy to draw a line between the two. He is the most high profile of dozens of activists and dissidents arrested, detained or harassed in recent months in what campaigners called China’s most severe crackdown on human rights in over a decade. Several are still held and many of those who have been freed are understood to have been released under strict conditions. The decision to bail Ai comes days before Chinese premier Wen Jiabao visits Europe, where leaders were expected to press the case for the release. It is impossible to know whether the events are connected. Although China has often released dissidents on the eve of major political visits, it has not done so recently. A message on the official Twitter feed for the EU president, Herman Van Rompuy, read: “Happy to learn that Ai Weiwei has been released.” Ai’s only contact with the outside world during his detention – a brief 20-minute visit by his wife Lu Qing – was arranged by police on the eve of Van Rompuy’s visit to China last month. At the time Lu said he had looked mentally conflicted and tense despite appearing to be in good physical health and receiving treatment for diabetes and high blood pressure. Nicholas Bequelin, Asia researcher for Human Rights Watch, welcomed Ai’s release. “His detention was political and his release is political. It is the result of a huge domestic and international outcry that forced the government to this resolution … I think Beijing realised how damaging it was to hold China’s most famous artist in detention,” he said. Although in theory police are able to take further action on a case for up to a year after a suspect is bailed, in practice detainees who are released do not usually face trial unless they are judged to have reoffended. Bequelin said Ai would probably have to report to police and would probably not be allowed to travel abroad without official permission. US state department deputy spokesman Mark Toner told a news conference: “It’s always a good thing when an individual who is only in prison for exercising his internationally recognised human rights is released.” Speaking before Ai’s release, Germany’s foreign minister, Guido Westerwelle, said it “would be a big relief for the artist and his family, even though the reported circumstances of his release on bail continue to appear depressing”. Patrick Poon, executive secretary of the Chinese Human Rights Lawyers Concern Group, tweeted: “It’s ‘good news’ for Ai Weiwei and for all of us who support Ai Weiwei and other human rights defenders, but the Chinese government’s handling of Ai Weiwei’s case once again proves that China is miles away from the real ‘rule of law’.” The Chinese government has said Ai’s case was nothing to do with human rights, while his family believed it was retaliation for his social and political activism. But some human rights campaigners thought the economic allegations offered officials room for manoeuvre, whereas they would not have felt able to drop political charges. Catherine Baber, Amnesty International’s Asia-Pacific deputy director, said: “Ai Weiwei must now be granted his full liberty, and not be held in illegal house arrest as has been the pattern with so many others recently released from arbitrary detention.” She also called for the immediate release of his four associates – Wen Tao, one of his friends, Zhang Jinsong, his driver and cousin, Hu Mingfen, an accountant, and Liu Zhenggang, a designer – who went missing shortly after him . Wen’s girlfriend Shi Jing, who had volunteered at Ai’s studio, said: “For both [Ai's] friends and family, it is positive news. “As for Wen Tao, his family hasn’t got any information so far … I still feel anxious, but since Ai is going to be bailed, there will probably be information about the others. They got into this because of Ai’s case, so there should also be news about them.” Ai Weiwei China Human rights Tania Branigan guardian.co.uk
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China’s best known artist, looking thinner after 81 days in detention, says ‘I’m fine … I’m on bail. Please understand’ After 81 days in detention, China’s best-known artist, Ai Weiwei, returned home a considerably thinner and noticeably quieter man. “I’m fine. I’m out,” the 54-year-old artist told the Guardian in a telephone call shortly after his release on bail. “I’m back with my family. I’m very happy.” The state news agency, Xinhua, said police had released him “because of his good attitude in confessing his crimes” and a chronic illness. Speaking from his home in north Beijing, the usually outspoken artist said he could not comment any further, adding: “I’m on bail. Please understand.” Ai’s sister Gao Ge said: “I’m very, very happy … we thank everyone, including our media friends, for all their help and support so far.” His mother, Gao Ying, told NPR that the family “won’t sleep tonight”. The artist’s disappearance on 3 April sparked international condemnation, with political leaders calling for his release and sustained protests throughout the art world. He vanished after he was stopped by officials at Beijing airport, where he was due to board a flight to Hong Kong. Officials later said police were investigating him on suspicion of economic crimes, although police never formally notified his family of his detention, which they are supposed to do within a day of seizing a suspect. The Xinhua report on Ai’s release said: “The decision comes also in consideration of the fact that Ai has repeatedly said he is willing to pay the taxes he evaded, police said. The Beijing Fake Cultural Development Ltd, a company Ai controlled, was found to have evaded a huge amount of taxes and intentionally destroyed accounting documents, police said.” Ai’s works include helping design the Olympic Bird’s Nest stadium in Beijing and last year’s Sunflower Seeds installation in Tate Modern’s turbine hall. But he has become as well known for his activism as for his art – although he suggested it was not easy to draw a line between the two. He is the most high profile of dozens of activists and dissidents arrested, detained or harassed in recent months in what campaigners called China’s most severe crackdown on human rights in over a decade. Several are still held and many of those who have been freed are understood to have been released under strict conditions. The decision to bail Ai comes days before Chinese premier Wen Jiabao visits Europe, where leaders were expected to press the case for the release. It is impossible to know whether the events are connected. Although China has often released dissidents on the eve of major political visits, it has not done so recently. A message on the official Twitter feed for the EU president, Herman Van Rompuy, read: “Happy to learn that Ai Weiwei has been released.” Ai’s only contact with the outside world during his detention – a brief 20-minute visit by his wife Lu Qing – was arranged by police on the eve of Van Rompuy’s visit to China last month. At the time Lu said he had looked mentally conflicted and tense despite appearing to be in good physical health and receiving treatment for diabetes and high blood pressure. Nicholas Bequelin, Asia researcher for Human Rights Watch, welcomed Ai’s release. “His detention was political and his release is political. It is the result of a huge domestic and international outcry that forced the government to this resolution … I think Beijing realised how damaging it was to hold China’s most famous artist in detention,” he said. Although in theory police are able to take further action on a case for up to a year after a suspect is bailed, in practice detainees who are released do not usually face trial unless they are judged to have reoffended. Bequelin said Ai would probably have to report to police and would probably not be allowed to travel abroad without official permission. US state department deputy spokesman Mark Toner told a news conference: “It’s always a good thing when an individual who is only in prison for exercising his internationally recognised human rights is released.” Speaking before Ai’s release, Germany’s foreign minister, Guido Westerwelle, said it “would be a big relief for the artist and his family, even though the reported circumstances of his release on bail continue to appear depressing”. Patrick Poon, executive secretary of the Chinese Human Rights Lawyers Concern Group, tweeted: “It’s ‘good news’ for Ai Weiwei and for all of us who support Ai Weiwei and other human rights defenders, but the Chinese government’s handling of Ai Weiwei’s case once again proves that China is miles away from the real ‘rule of law’.” The Chinese government has said Ai’s case was nothing to do with human rights, while his family believed it was retaliation for his social and political activism. But some human rights campaigners thought the economic allegations offered officials room for manoeuvre, whereas they would not have felt able to drop political charges. Catherine Baber, Amnesty International’s Asia-Pacific deputy director, said: “Ai Weiwei must now be granted his full liberty, and not be held in illegal house arrest as has been the pattern with so many others recently released from arbitrary detention.” She also called for the immediate release of his four associates – Wen Tao, one of his friends, Zhang Jinsong, his driver and cousin, Hu Mingfen, an accountant, and Liu Zhenggang, a designer – who went missing shortly after him . Wen’s girlfriend Shi Jing, who had volunteered at Ai’s studio, said: “For both [Ai's] friends and family, it is positive news. “As for Wen Tao, his family hasn’t got any information so far … I still feel anxious, but since Ai is going to be bailed, there will probably be information about the others. They got into this because of Ai’s case, so there should also be news about them.” Ai Weiwei China Human rights Tania Branigan guardian.co.uk
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Former business secretary and pension reform architect calls for deal with unions and says coalition risks exodus from scheme The former Labour business secretary who designed the coalition’s contentious public sector pension reforms will warn ministers on Thursday that their plans are risk becoming so punitive they could force people out of pension schemes altogether. Lord Hutton of Furness will warn of a “serious” risk of a mass exodus from the local government pension scheme – which is funded and has 3.5 million members – if contributions are raised too high and no other compensation is provided. But he will also urge the unions and ministers to get back round the negotiating table to thrash out a deal. “If these reforms have any chance of succeeding then people need to know that they are being treated fairly … there should be full and proper consultation and discussion with the trade unions,” he will say. “That is how we do things in Britain – the public would take a very dim view of any government that fails to honour this basic requirement. “We must try and avoid the confrontation and division that marked previous decades and must not turn the clock back.” Danny Alexander, the chief secretary to the Treasury, sparked a union backlash last week by unilaterally announcing plans to increase contributions for public sector workers and raise their pension age to 66 by 2020. Ministers have also accused some unions of undermining talks by announcing strike action on 30 June before the negotiations conclude. Hutton, who was work and pensions secretary in the Blair government, will speak at the Institute for Public Policy Research thinktank in London. He will stress that there is no choice but to reform pensions as people live longer. “This issue is coming down the track at us whether we like it or not and we can’t afford to duck it or fudge it,” he will say. He will question the coalition’s moves – under the “fair deal” consultation that ended last week – to allow private companies to drop public sector pensions when they take over a state service in an outsourcing arrangement, saying: “We have to avoid a new race to the bottom here.” On the risk of opt-outs, Hutton will urge ministers to consider alternatives being proposed for local government workers. His report to the government in March urged caution about the risk of members pulling out more generally, but on Thursday he will highlight the plight of the local government pension – a self-contained, funded scheme unlike the majority of public sector pensions, which rely heavily on the Treasury. Ministers have acknowledged the risk of the welfare system being left to pick up the pieces after a mass opt-out from public sector pensions. Last week Alexander announced that those earning under £15,000 a year would be exempted from the 3.2 percentage point average increase and for those under £18,000 it would be limited to 1.5 percentage points. But that underpinning means even bigger increases for higher earners, including teachers, doctors and managers. A survey by the GMB union suggested that about 50% of middle earners in local government could opt out as a result of higher contributions. Delegates at Unison’s annual conference in Manchester on Wednesday heard appeals for co-ordinated walkouts in the first week of October to disrupt the Tory party conference should the talks on pensions, due to resume on Monday, collapse. Unison, the biggest public sector union, voted to mandate its general secretary to ballot for strike action at any point, with some members calling for a strike to disrupt the Tory conference in October, which is also in Manchester. Amid defiant warnings that state employees would not be railroaded into changes, John McLoughlin, a delegate from Tower Hamlets council, London, said: “We should come back to this city, and when Cameron and George Osborne get up to speak they should be met with resistance.” David Cameron’s official spokesman said on Wednesday the government wanted to avoid strikes. “Our objective here is to protect public sector pensions in a way that is fair to public sector workers but also fair to taxpayers,” he said. Public sector pensions Danny Alexander Welfare Trade unions Liberal-Conservative coalition Conservatives Polly Curtis Dan Milmo guardian.co.uk
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Former business secretary and pension reform architect calls for deal with unions and says coalition risks exodus from scheme The former Labour business secretary who designed the coalition’s contentious public sector pension reforms will warn ministers on Thursday that their plans are risk becoming so punitive they could force people out of pension schemes altogether. Lord Hutton of Furness will warn of a “serious” risk of a mass exodus from the local government pension scheme – which is funded and has 3.5 million members – if contributions are raised too high and no other compensation is provided. But he will also urge the unions and ministers to get back round the negotiating table to thrash out a deal. “If these reforms have any chance of succeeding then people need to know that they are being treated fairly … there should be full and proper consultation and discussion with the trade unions,” he will say. “That is how we do things in Britain – the public would take a very dim view of any government that fails to honour this basic requirement. “We must try and avoid the confrontation and division that marked previous decades and must not turn the clock back.” Danny Alexander, the chief secretary to the Treasury, sparked a union backlash last week by unilaterally announcing plans to increase contributions for public sector workers and raise their pension age to 66 by 2020. Ministers have also accused some unions of undermining talks by announcing strike action on 30 June before the negotiations conclude. Hutton, who was work and pensions secretary in the Blair government, will speak at the Institute for Public Policy Research thinktank in London. He will stress that there is no choice but to reform pensions as people live longer. “This issue is coming down the track at us whether we like it or not and we can’t afford to duck it or fudge it,” he will say. He will question the coalition’s moves – under the “fair deal” consultation that ended last week – to allow private companies to drop public sector pensions when they take over a state service in an outsourcing arrangement, saying: “We have to avoid a new race to the bottom here.” On the risk of opt-outs, Hutton will urge ministers to consider alternatives being proposed for local government workers. His report to the government in March urged caution about the risk of members pulling out more generally, but on Thursday he will highlight the plight of the local government pension – a self-contained, funded scheme unlike the majority of public sector pensions, which rely heavily on the Treasury. Ministers have acknowledged the risk of the welfare system being left to pick up the pieces after a mass opt-out from public sector pensions. Last week Alexander announced that those earning under £15,000 a year would be exempted from the 3.2 percentage point average increase and for those under £18,000 it would be limited to 1.5 percentage points. But that underpinning means even bigger increases for higher earners, including teachers, doctors and managers. A survey by the GMB union suggested that about 50% of middle earners in local government could opt out as a result of higher contributions. Delegates at Unison’s annual conference in Manchester on Wednesday heard appeals for co-ordinated walkouts in the first week of October to disrupt the Tory party conference should the talks on pensions, due to resume on Monday, collapse. Unison, the biggest public sector union, voted to mandate its general secretary to ballot for strike action at any point, with some members calling for a strike to disrupt the Tory conference in October, which is also in Manchester. Amid defiant warnings that state employees would not be railroaded into changes, John McLoughlin, a delegate from Tower Hamlets council, London, said: “We should come back to this city, and when Cameron and George Osborne get up to speak they should be met with resistance.” David Cameron’s official spokesman said on Wednesday the government wanted to avoid strikes. “Our objective here is to protect public sector pensions in a way that is fair to public sector workers but also fair to taxpayers,” he said. Public sector pensions Danny Alexander Welfare Trade unions Liberal-Conservative coalition Conservatives Polly Curtis Dan Milmo guardian.co.uk
Continue reading …Sending A Shock Through The Market, PIMCO Director Bill Gross Says Fiscal Conservatism Doesn’t Equal Job Growth
June 22, 2011 No Comment
enlarge PIMCO director Bill Gross. Bill Gross is the manager director of PIMCO, the world’s largest bond fund, and thus one of the most important bond traders in the world. And his concerns about the deficit have been cited as a compelling case for austerity. Now? Via Ezra Klein, not so much: But in an unusual mid-month note to his investors, Gross hammered the “anti-Keynesians” in both parties who believe “that fiscal conservatism equates to job growth.” The truth, he says, is just the opposite. “Fiscal balance alone will not likely produce 20 million jobs over the next decade. The move towards it, in fact, if implemented too quickly, could stultify economic growth.” Gross goes on to spend some time mocking the “ivory tower theorem” that deficit reduction will convince consumers to spend more now because they’ll worry less about taxes and service cuts later. “I know of no family,” he writes, “who, after watching the Republican candidates’ debate in New Hampshire, went out the next day and bought themselves a flat screen under the assumption that their Medicare entitlements would be cut in future years and the U.S. budget balanced.” That theory belongs “in the trash bin of theses and research aimed more towards academics than a practical remedy to America’s job crisis.” So what should we do? “Government must temporarily assume a bigger, not a smaller, role in this economy, if only because other countries are dominating job creation with kick-start policies that eventually dominate global markets.” But what about the deficit? “Deficits are important, but their immediate reduction can wait for a stronger economy and lower unemployment. Jobs are today’s and tomorrow’s immediate problem.” Gross goes on to offer some ideas for how the government can goose job growth, both in the short term and the long term. Some of them I find convincing, some of them I don’t. But his overall point is well-taken, and more subtle than some commentators are giving it credit for: Politicians have increasingly been pretending that deficit reduction slices, dices and blends. Don’t believe them. Cutting deficits tends to destroy jobs. And though the deficit matters in the long run, we need to survive the short run first. Gross’s credentials as a deficit hawk are unimpeachable, but he’s arguing here that, to be a deficit hawk over the long term, you need to be jobs-focused now, as no economy with 9 percent unemployment is going to achieve the growth necessary to get its deficit under control. And he’s right. The question is whether his call for the government to refocus on jobs and brush aside fantasies that deficit reduction is also job creation will get as much attention as his concerns about debt and deficits.
Continue reading …Sending A Shock Through The Market, PIMCO Director Bill Gross Says Fiscal Conservatism Doesn’t Equal Job Growth
June 22, 2011 No Comment
enlarge PIMCO director Bill Gross. Bill Gross is the manager director of PIMCO, the world’s largest bond fund, and thus one of the most important bond traders in the world. And his concerns about the deficit have been cited as a compelling case for austerity. Now? Via Ezra Klein, not so much: But in an unusual mid-month note to his investors, Gross hammered the “anti-Keynesians” in both parties who believe “that fiscal conservatism equates to job growth.” The truth, he says, is just the opposite. “Fiscal balance alone will not likely produce 20 million jobs over the next decade. The move towards it, in fact, if implemented too quickly, could stultify economic growth.” Gross goes on to spend some time mocking the “ivory tower theorem” that deficit reduction will convince consumers to spend more now because they’ll worry less about taxes and service cuts later. “I know of no family,” he writes, “who, after watching the Republican candidates’ debate in New Hampshire, went out the next day and bought themselves a flat screen under the assumption that their Medicare entitlements would be cut in future years and the U.S. budget balanced.” That theory belongs “in the trash bin of theses and research aimed more towards academics than a practical remedy to America’s job crisis.” So what should we do? “Government must temporarily assume a bigger, not a smaller, role in this economy, if only because other countries are dominating job creation with kick-start policies that eventually dominate global markets.” But what about the deficit? “Deficits are important, but their immediate reduction can wait for a stronger economy and lower unemployment. Jobs are today’s and tomorrow’s immediate problem.” Gross goes on to offer some ideas for how the government can goose job growth, both in the short term and the long term. Some of them I find convincing, some of them I don’t. But his overall point is well-taken, and more subtle than some commentators are giving it credit for: Politicians have increasingly been pretending that deficit reduction slices, dices and blends. Don’t believe them. Cutting deficits tends to destroy jobs. And though the deficit matters in the long run, we need to survive the short run first. Gross’s credentials as a deficit hawk are unimpeachable, but he’s arguing here that, to be a deficit hawk over the long term, you need to be jobs-focused now, as no economy with 9 percent unemployment is going to achieve the growth necessary to get its deficit under control. And he’s right. The question is whether his call for the government to refocus on jobs and brush aside fantasies that deficit reduction is also job creation will get as much attention as his concerns about debt and deficits.
Continue reading …After Giving Free Pass to Planned Parenthood Head, Spitzer Batters FRC’s Tony Perkins Over Abortion Funding
June 22, 2011 No Comment
It was an obvious contrast in demeanor last week, Eliot Spitzer's lapdog interview of the president of Planned Parenthood and his aggressive sparring with social conservative Tony Perkins. Spitzer simply let Planned Parenthood president Cecile Richards air her spin on the organization, but went after the Family Research Council's (FRC) Perkins from the get-go on CNN Thursday night. Consider the statements Richards made last Wednesday night that Spitzer was content not to scrutinize: Planned Parenthood has received “enormous support” from both Democrats and Republicans, the organization is “very transparent” about its services, Planned Parenthood reduces need for abortions through family planning, and the recent efforts by Congress and state legislatures to cut its funding “were to eliminate access for women to get access to life-saving breast cancer screenings, pap smears, and birth control.” [Video below the break.] Spitzer is no foe of the pro-choice movement. It was known that he was pro-abortion as New York's governor and attorney general. A NARAL New York PAC bragged about being “central” to his election as attorney general in 1998. He was pushing a pro-abortion bill as governor before he was ousted in a prostitution scandal in March of 2008. In the Perkins interview, Spitzer grilled the FRC head over his assumption that Planned Parenthood has been implicated in multiple scandals involving covering for child prostitution and improper funding. Spitzer outright told Perkins that he was guilty of slandering Planned Parenthood. Perkins was steadfast in his accusations. “Let me tell your listeners, your viewers, to go to LiveAction.com and they can see for themselves the undercover video that was filmed in Planned Parenthood clinics that shows them covering and facilitating sex trafficking. And then let your viewers make that decision for themselves,” he told the news host. Spitzer wouldn't buy that, conveniently ignoring the accusations made by Live Action. Meanwhile, Spitzer even took Cecile Richards' spin as his own words. Richards had claimed that Planned Parenthood works “like every other hospital in America, every other medical provider” in ensuring federal money covers health care, but not abortions. Spitzer then used those words as fact against Perkins. “The structure that Planned Parenthood has, that you're saying should prohibit their getting any federal money, is identical to the structure that every hospital in the United States has,” Spitzer claimed. “Hospitals provide abortions. Hospitals cannot use federal money to provide those abortions. They segregate those services. They account for them separately, just the way Planned Parenthood does.” Perkins argued that the tax dollars are fungible go to underwrite abortions at Planned Parenthood. “Dollars are fungible,” he insisted. “And so what is happening is government tax dollars are being used to underwrite the overhead of Planned Parenthood doing abortions.” For a transcript of the segment, which aired on June 16 at approximately 8:28 p.m. EDT, is as follows: ELIOT SPITZER: In tonight's American issues segment, the return of the highly-charged battle over abortion rights and the funding of the procedure. Three states have voted to eliminate Planned Parenthood's funding and three more states are about to do the same. Last night, I spoke with the organization's president Cecile Richards, and she had this to say. (Video Clip) CECILE RICHARDS, president, Planned Parenthood Federation of America: I think it's a political miscalculation, Eliot. I think that they are playing politics with women's health care. And when you talk about – we're not even talking about abortion here. The moves by these legislatures, and the efforts by the U.S. Congress were to eliminate access for women to get access to life-saving breast cancer screenings, pap smears and birth control. And the American people don't want that. (End Video Clip) SPITZER: Joining me now from Washington is someone who has been working feverishly to cut Planned Parenthood's funding, Tony Perkins, President of the Family Research Council. Tony, thanks for joining us. TONY PERKINS, president, Family Research Council: Good evening, Eliot. SPITZER: Let me begin with this question. Aren't you trying to prevent the government from funding health care services that are constitutionally protected, services the Supreme Court has said women should have access to? PERKINS: No, not at all. I mean, this is not about health care. In fact, all of the procedures in terms of health care are still being funded in these states. What's being done here is that funding to the nation's largest abortion provider is being redirected. And so –
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