The gross exploitation of paying two pence per hour less than the minimum wage

Apparently there are grossly exploitative employers with the temerity to pay people less than the legal minimum wage:

Tesco was Britain’s worst minimum wage offender as the business department identified a raft companies that failed to pay staff in full.

The supermarket chain was among 139 firms, including Pizza Hut, Costco and Wigan Warriors, the rugby league club, named and shamed by the Government.

The companies were investigated between 2016 and 2018 and they failed to pay £6.7m to more than 95,000 employees at the time.

If we take 95,000 employees each working a 1,750 hour year (not quite right but we’ve got to make some assumption) that £6.7 million comes out to underpayment of two pence per hour.

We take it that this is indeed evidence of the gross exploitation of the workers by capitalism? Worthy of a press release and the full power of HMRC to deal with?

Or perhaps we don’t. This is not an actual exemplar, just an example of the sort of thing being argued about here. If the boss says that you must wash your hands before starting work then that time spent washing hands is a requirement of the job - and should therefore that time should be paid for. Again, that’s not an exact description but that is the sort of thing that is being complained about here.

Over those two years total incomes in the UK were some £4 trillion - that’s easy as total incomes are, by definition, the same as the annual GDP of about £2 trillion. That is, 0.00017% underpayment when taken over all incomes. We think that can usefully be described as a rounding error.

Of course, neither Tesco nor any other of those named were in fact the worst at underpaying the minimum wage. They were, at worst, the cases caught. And it’s worth noting that they’re all entirely legitimate businesses operating in the full sight of the law. The people we think who might be really violating pay rates are odd backstreet factories in Leicester, farm workers perched in caravans far from anywhere. There’s not much trumpeting about successes on those fronts. Presumably because there wasn’t much success to trump about.

Isn’t that a surprise? A vast state bureaucracy concentrates upon the trivial offences of the largely law abiding and ignores the scofflaws. Really, who would have thought such a thing could happen?

With that thought about the success of an overweening state we wish you the very best for the New Year.

So, we've left, now what?

It’s morning in the United Kingdom. Strangely, World War III has not broken out. Japanese carmakers are still investing here. House prices have not plummeted; indeed, in recent months they have surged. No punishment budgets are planned. The pound has held up, the stock market has had a bit of a surge. The banks have not left. Freight still seems to be crossing into Calais, and medicines back to Dover. 

It’s also morning in Europe. And as Boris keeps saying, we are still European. We account for 12% of Europe’s 513m population and 93,000 square miles of its land area. Not to mention 9.6m square miles of fishing grounds.

We are the largest military power in Europe by a long, long way, and the only nuclear power other than France. We account for around a quarter of European defence spending. We have a seat on the UN Security Council. We are Europe’s closest ally to the world’s largest military (and economic power), the one that bankrolls NATO, the United States. 

Britain is one of the handful of leading financial centres in the world. It is by far Europe’s most prominent one. It accounts for a third of Europe’s capital market and is essential to the operations of (probably most) European firms. It is the leader in financial technology investment, attracting more than the entire EU. It can now resist moves to transaction taxes, clearing house rules, bans on short selling and micro-management that EU chiefs were about to impose. It remains, as before, outside the eurozone and now, there is no question of it paying into the eurozone rescue fund that will be needed to avert a eurozone crisis, perhaps soon.

We are one of the world’s largest manufacturing nations. Our share of trade with the EU has fallen from 60% to 40% since 1999, leaving us with a trade deficit against them. But out trade with the rest of the world has risen, and that is where 90% of global growth now happens — not in the EU. We have signed around 60 free trade agreements with other countries in no time flat. We have historic and friendly relations with many of the world’s leading nations, and with scores of developing countries in the Commonwealth. We will henceforth be able to buy goods at world prices rather than imposing EU tariffs that in some cases (such as certain agricultural products such as cocoa and chocolate) can reach nearly 30%. 

We will also enjoy free trade with the European Union. And yet, the 95% of UK firms who do not export to the EU will not have to abide by EU regulations. It remains to be seen how far the UK will ease regulations on them, but there is no logical case while anything other than our exports to the EU should be bound by EU standards. And the EU constitutional court, the European Court of Justice, which has imposed billions of pounds worth of restrictions on our economy, will have no jurisdiction here.

Soon, the sun will be dawning over the United States, Canada, Mexico, South America, and then, across the pacific, over New Zealand, Australia, and the rest of the world. We can trade and collaborate with all these nations, free of the protectionist armour we have been forced to wear for the past decades. We might even be able to organise the right to live and work throughout the CANZUK nations. If we like, we can go even further. We can recruit experts from anywhere in the world, without being obliged to accept people from EU countries whether they are needed here or not.

As Joel Rodriques recently pointed out, of the ten best universities in Europe, eight are in Britain. Culturally, we have the English language, the most widely spoken language in Europe and one of the most widely spoken in the world — the language of business, commerce, trade, aviation, shipping and much else. Paris and Vienna may have Opera Houses for the rich too, but it is to London’s West End (Covid permitting) that world tourists come to see theatre. In Edinburgh we have one of the world’s biggest arts festivals. Our Premier League is the leading soccer league in the world. Our English citizens play a game that could be mistaken for cricket, but which at least makes us part of a diverse association of countries in which we are respected for our values, if not our fielding. And they are used to our warm, flat beer.

We could brag about this. Talk about how great we are. The world’s best at so many things. Well able to stand up for ourselves, and indeed inspire the world in the direction of free trade, free markets, the rule of law, human rights, and indeed common decency. We could brag about how great we know that our future is going to be now we can choose our own path. We could talk ourselves up, and we would be well justified to do so. We could do all that. But it wouldn’t be very British, would it?

Still, we will manage.

That's it, we're out

“That’s it, we’re out!” said David Dimbleby in the early hours of Referendum night as the mathematics became inevitable. He was premature: it has taken four years to fend off the petulant determination of the deniers to overturn the result.

Now, I hate referendums. Changing the constitution — the rules by which we can be inspected, regulated, taxed, licensed, repressed, judged, censured and punished by our politicians — you should have near-unanimous agreement. And not just a small majority, as the losers keep bleating. Mind you, they didn’t bleat when giving Scotland an entire new government on the basis of a 51.6% to 48.4% vote — not so far off the Brexit majority that Nicola Sturgeon was so anxious to overturn. Wales was even slimmer, 50.3% to 49.7%. But we didn’t have four years of hissy fits trying to overturn those results. 

Nor should we have had it over the Brexit referendum, which was far more justifiable than the devolution polls. We were taken in (!) on the mere say-so of the politicians. Only later did we have a (simple majority) referendum to remain (I voted Yes, BTW). So, it’s reasonable that we should now leave on the basis of a simple majority too.

But the entire establishment, plus wealthy or state-funded, self-styled ‘world citizens’, plotted to overthrow the decision made by the majority (despite billions of EU and UK government money, plus warnings of World War III thrown at them). It was ‘only advisory’, just a ‘protest’; voters were ‘lied to’, ‘didn’t understand’. We needed a second referendum — no, think grander, advised PR guru Roland Rudd from his Georgian mansion in Somerset (or maybe his swank Holland Park townhouse), we need a People’s Referendum. Which is what we all thought we’d just had.

Then it was Gina Miller (either from her £7m home in London or her one in France, I’m not sure) spending her husband’s £40m fortune on London’s snootiest law firm to stop the government moving Article 50 without the say-so of an overwhelmingly Remainer parliament in which it had a wafer-thin majority. It was “a matter of democracy,” she declared. Pure, cynical, monied opportunism, more like. And so it went on for years, more petulance, more scares, more litigation, more machinations designed to — well, overturn democracy. It looked like the 2019 general election (oh, no, not another one!) had settled the issue, but even then, scheming merely re-focused to ensuring that the ‘deal’ pretty much maintained the status quo. There’s even dismay that the final deal exceeded expectations — because now we’re out for good.

It wasn’t leaving the EU that divided the nation, it was being in it. And now at least we can all focus on doing what is in the interests of people in the UK, and indeed the rest of the world. We can at last renew our role as the global leader in free trade, extolling the merits of free trade and the folly of protectionism. Unlike the EU, we know that trade barriers hurt our own consumers. We’ve already signed umpteen trade deals, with more to come. It’s a big world out there. We can provide markets for the produce of the poorest countries instead of walling them off with 30% tariffs. And by showing what can be achieved, we will probably have more influence on the EU than we ever could as one of 28 horse-trading countries.

More broadly, we can be the global leader promoting the rule of law internationally too. We have a pretty good record on freedom, democracy and justice that we can recommend to the world. To replace opportunism with law — on trade, treaties, arms, finance, and dispute resolution. To re-engage with the Commonwealth to consolidate liberal values and spread them more widely. To work for peace and counter threats such as cyber warfare with all our allies — instead of being split from them by submerging into the inevitable EU army. To promote international understanding through education — we have some of the best universities in the world, remember.

At home, we can grow our SMEs into world-beaters, giving them the oxygen of low corporate taxes and sympathetic, growth-aware regulation. No longer do we need to subject businesses to EU regulation, even if they export nothing to EU countries. And our financial markets can avoid the slide into transactions taxes, bans on short selling and the micro-regulation that has driven financial services to Singapore and elsewhere. Forbes Magazine already ranks us as the world’s best country for doing business, and we can build on that with business-friendly policy and opening international markets.

Perhaps the most significant benefit is one that is never noticed. We will get our legal system back. Instead of being bound into a prescriptive system, we can reassert our permissive one. Instead of having to wait for legislative permission to do things, we can get on with invention, innovation and entrepreneurship and sort out any problems in the courts when they arise. The Continental legal system imposes a detailed micro-managing rule book on individuals and businesses. Our system relies on the test of what is reasonable, not what some official decides should and should not happen.

We are not leaving Europe: Scandinavia and Continental Europe are and remain our friends, allies and partners. But our eyes, hearts and tradition range more widely. In fact, rather than being reluctant participants in a local, centralising political and economic vision that we do not share, our departure will actually make us better friends, allies and partners in the future.

Sure there are bureaucratic barriers into the EU now

The latest complaint about Brexit and the European Union appears to be about musicians and the like being able to tour Europe. We do indeed sympathise:

Actors, musicians and comedians have reacted with alarm to provisions in the Brexit trade deal that will prevent British performers moving around many European countries without a work permit.

Leaders of the culture sector fear the clauses will severely curtail the ability of performers to go on tour in Europe, and will hamper the recovery of the arts after the devastating impact of the pandemic.

The clauses in the deal will affect tens of thousands of people in the UK’s creative industries, including film-makers, technicians and models as well as performers.

We’re entirely in favour of people being able to move to work, to tour.

However, we’d still like to point out something we regard as pretty important. So, there are difficult bureaucratic rules that must be followed now that the UK is fully out of the EU.

Musicians and other performers requiring equipment face the added burden of having to fill out a carnet, a passport for goods that involves paying a deposit on the gear involved.

….

He also pointed out that from January musicians face the added risk of having their instruments confiscated if they contain rare wood or ivory and don’t have the correct paper.

Our point being that all of these rules have, all along, applied to those from outside the EU who wish to tour inside it.

That is, the EU is not some delight of a free trade area, or not only. It’s an area with very high barriers to the people outside it however lax the impositions inside it. It is, in fact, a zollverein, not a free trade area. We are now able to see the frustrations and barriers that the 160-ish countries out there not members of the EU have in trying to offer us their fine goods and services. That is, every complaint about how difficult it is now to export from the UK into the remnant-EU is a reminder of what we’ve been missing all these years from all those places outside it.

The more people complain about the new situation the stronger the argument for actual free trade is. Every mutter about how difficult it is to export British beef, or banking services, or musicians, should remind us of how difficult it has been for us to import Argentinian beef, or Antiguan banking, or American musicians. Perhaps we don’t actually want all of those but the edifice of bureaucracy which denies them to us is being brought home, no?

Certainly, we’d have rather more respect for them if those now complaining had also been complaining before.

Surely Owen Jones, of all people, understands his Marx?

Owen Jones tells us that Brexit requires stronger unions. If he actually understood the Marx he derives so many of his prejudices from he’d understand that Brexit is the cure for the very thing he bemoans:

Workers, after all, had been stripped of bargaining power when it came to demanding higher wages. Simplistic generalisations often made about the triumph of leave should be avoided – most full-time and part-time workers voted to remain, as did a majority of those whom pollsters classify as working class under the age of 35 – but that real wages had fallen or stagnated for so long fuelled the disillusionment that Brexit fed on. When rightwing Brexiteers argued that migrants were undercutting wages, they were redirecting blame away from the weakening of unions and the so-called “flexible labour market” – but they had a receptive audience. In many ex-industrial areas, the replacement of jobs that had security and prestige with ones lacking both fed that disenchantment: the ingenious slogan “take back control” appealed to many for a reason.

It is one of those - rare - areas of economics that Marx did get right. The wages of the workers are determined by the bargaining power of the workers. Unions are only a minor part of this though, an artificial creation of said bargaining power. The real influence is that reserve army of the unemployed. As and when there are those willing to work for any crust going then employers both don’t have to raise wages to gain more labour, nor do they have to raise wages to keep the labour they currently employ.

So, rises in productivity flow into the pockets of the capitalists and not into those of the workers. Unions are indeed a potential response to this. But they only work to benefit those in the union, leaving those in the reserve army quite out in the cold. The answer, as is obvious from Marx, is the absence of the reserve army - full employment is what raises the workers’ wages.

We had full employment among people actually in Britain pre-covid. But we also had 450 million people in the European Union who could join that British labour force by hopping on a £50 flight. That is, stagnation of wages didn’t stem from “the immigrants taking all our jobs” but from the existence, in parts of Europe, of a substantial reserve army of the unemployed.

The end of the free movement of labour rather solves this point. Yes, we do indeed prefer free movement ourselves and we’d not regard this change as a justification of anything. But it does actually solve the problem Jones is complaining of. The annoyance here being that if Jones actually understood that Marxism he gains such impetus from then he’d grasp this - in a manner that he clearly doesn’t.

It is, after all, one thing to be a socialist, or a Marxist, and quite another to actually understand either.

Only bad policy can follow from generally believed untruths

Policy is not one of these things where we can, randomly, alight upon the correct answer. It is necessary to understand the problem, even to work out whether there is a problem, that needs to be dealt with before the correct solution can be crafted.

If, for example, the gender pay gap is about children and their care then that is where any solution needs to be found, not in reports about the size of the gap. If Covid death rates vary by Vitamin D levels then that is where the solution is to be found, not in tirades about racism. Note the if there - the if being that important point. If those are not the causes of the perceived problems then the solutions will be found elsewhere.

So it is with these food restrictions:

Supermarkets in England are to be barred from displaying unhealthy food and drinks at checkouts or using them in buy one, get one free offers, as part of a proposed government crackdown on obesity.

The planned restrictions were praised by health campaigners as a “bold first step” in Downing Street’s promised campaign against obesity.

The checkout restrictions will apply to other sales-boosting locations such as the entrances to stores or at the end of aisles. Similar rules will apply for websites, banning sales links to unhealthy foods on places such as homepages, or at checkout or payment pages. Restaurants will no longer be able to offer free refills of sugary drinks.

There must, for this to be allowable in a free society, be some significant justification. The problem with this being that not only is there no such justification, the one on offer is not in fact true:

Prof Graham MacGregor, the group’s chair, said: “Finally, Downing Street is acting decisively with a bold first step to restrict the sale of junk food on multi-buy offers and at checkouts, and taking on one of the biggest threats to Britain’s future health – childhood obesity.”

We’d not support such restrictions even if childhood obesity were a real problem. But that’s the thing, it isn’t anyway:

In England 63% of adults are classified as overweight or living with obesity, while a third of children leave primary school overweight or obese.

That number given for children simply is not true. And yet it’s a widely believed number and is one that - quite obviously from the above - is used to drive policy. As Chris Snowdon has been pointing out over the years.

It just isn’t true that one third of children are obese. Therefore this untruth cannot - sorry, should not for of course it is being - be used to justify policy. The argument in favour of this sort of technocracy, that the wise will save us from ourselves, is that the technocrats be both wise and informed. When their heads are filled with blatant lies then the system not only doesn’t work it has entirely lost its justification, hasn’t it?

The joys of government planning. Again.

The argument in favour of government planning things is that only those looking from the disinterested and Olympian heights can possibly take all societal interests into account. If mere economic actors, those who would be directly affected by decisions and actions, were to decide what is to be done then important larger considerations would be ignored.

Then we have the reality of government planning:

Up to one in five train services will be axed next year under radical plans being considered by ministers to prevent a multi-billion-pound taxpayer bill spiralling out of control.

Whitehall officials are considering proposals to cut Britain’s rail capacity to around 80pc of pre-Covid level, The Sunday Telegraph has learnt.

Nothing wrong with that as a proposal nor action. A smaller economy will have fewer people travelling. It will have less money to subsidise those who do. We’ve all had a taste of working from home and some at least - enough to shade the numbers travelling - have found that both it and we work when we do so.

However, this is being done at the same time as HS2 starts, that plan to expand the capacity of the network, for commuters, at the cost of £100 billion and counting.

That is, government planning doesn’t mean disinterested decision making from those Olympian heights. The why being that HS2 or not, or more train capacity or not even, has become a political argument not a rational one. HS2 doesn’t even pass its own cost benefit test but tribes are lined up on either side and they shout at each other. Who wins, whether it goes ahead or not, is based upon who can shout loudest - who has the political power.

This being the problem with political direction of the economy. It always does come down to politics. Debate and persuasion are good and useful things in their place but as it turns out they’re not good ways of spending money.

But what sort of diversity is to be championed?

The BBC has this office, and officer, to champion diversity:

If there’s one thing that unites Tory MPs, it’s mistrust of the ‘north London liberal elite’. Members of this shadowy group live in Islington, voted Labour and Remain, and hold highly-paid jobs in metropolitan institutions where their decision-making shapes the direction of the country.

So, I venture to June Sarpong, director of creative diversity at the BBC, and former face of the Britain Stronger in Europe campaign, as she speaks to me from her home in Islington: "I think they might be talking about you."

The important question is clearly well, what sort of diversity is it that is being championed?

But Ms Sarpong is in no doubt that white privilege is a fact of life. “There is unfairness baked into our system,” she says, and while the “elite white male” is at the top of the tree, even the white working class has an advantage over people from black and Asian backgrounds.

Ah, that kind. Something of a pity. An insistence upon a certain ideological view - this white privilege - is not what we’d consider to be a useful or interesting form of diversity. Even if it were true, an objective fact - not something we think it is - that British society is engrained with this institutional racism it is still true that diversity of ideological view on this, as with any other matter, is the useful and interesting form of said diversity.

In fact, we’d say that an office, or department, of diversity that actually has an ideological view is in itself missing the point of the existence of the office.

But what if it's actually true?

Sure, many people insist that this isn’t true:

Yet without a draft paper even being discussed by his fellow commissioners, he said the report would “challenge perceptions of racism” and that “our early findings suggest that life chances are more influenced by age, sex, class, and geography rather than race”. In other words, despite the massive increase in awareness of racism all around the world this year, the government inquiry will tell us race is a minor consideration.

We have excellent evidence that geography is the most significant influence over lifetime income for example. Which country you’re born into has more effect than anything else - class, gender, race, anything - over how much you earn. Being born into a rich country puts you well up the listings, into a poor one well down them.

This all being rather important. Take the analagous gender pay gap. If this is the result of direct discrimination against women then the solution will require one set of actions. If, instead, it’s about children, childcare and sexually dimorphic responses to those pressures then the solution will lie elsewhere. Even, it would be possible to ponder whether a solution was necessary.

So too with any considerations of race or anything else. If we spot differential outcomes then we need to know why. Appalling inner city schools perhaps, being from recent immigrant families, linguistic skills, and, yes, consider actual and direct racism as a cause. But only when we’ve done so and narrowed down the cause can we get anywhere close to evaluating a useful solution.

Simon Woolley is the director of Operation Black Vote. He was chair of the No 10 race disparity unit until July 2020

Ah, we might not have the most open of minds considering this issue then.

An answer and a question for Owen Jones

Owen Jones wants us all to know that the British response to the coronavirus has been worse, vastly worse, than that anywhere else. We’d at least start to argue that the vaccine results belie that but then that’s when government has sensibly leveraged the private sector and of course Jones isn’t going to accept that.

It is possible though to give and answer to part of his lament:

Those who support the Conservatives – the party most likely to wrap itself in the flag and denounce the left for doing Britain down – are most likely to damn the public for the steep rise in Covid cases. Presumably they believe that Germans, South Koreans, Australians and New Zealanders have a superior national character to the reckless Brits, rather than governments that did not lock down too late, prematurely reopen the economy without a functioning test-and-trace system and allow the constant re-importing of the virus through a lack of border checks.

We are talking about health care here so the first stop would probably be to examine the health care systems in each country. None of the four mentioned have anything like the National Health Service even as all have universal health care systems. If the health care response has been institutionally terrible then perhaps it’s the health care institution that’s responsible for the response having been terrible?

This might even be true and certainly there’s enough logic there for us to examine the point, no?

It’s the question for Owen that we think is more interesting though. Assume that the analysis is correct, that the British state simply is incapable of dealing with matters more complex than MPs’ pensions. Why then does Owen want it to be responsible for ever more of our lives rather than our switching to a system of societal management that doesn’t rely upon this incompetence?