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Posts Tagged ‘business’

Zero Hours Contracts: Government needs to improve them; not remove them

August 3, 2013 Leave a comment

images (44)Zero hours contracts have been bounding along in this week’s news with a series of stories covering the alleged exploitation of workers by high profile Companies such as Amazon. But what would the real impact be for business and workers themselves if there was no legal provision for what is today’s version of a casual contract?

By their very nature, businesses that have an operational or service-providing side to them have to manage and address variations in sales or workload, depending upon any one of a number of different influences that can dictate how busy or quiet they might be. These could be as simple and regular as seasonality, like the run up to Christmas or perhaps the unexpected changes in customer shopping habits that some retailers and travel companies have experienced as a result of unpredictable factors such the recent hot weather.

As customers in any respect when we are out and about, we will rarely even begin to consider the processes behind the scenes which ensure there are an appropriate number of staff on hand to serve us when we need them, or how things would actually run if Businesses such as hotels, shops and pubs were not able to call upon flexible staff to fill gaps caused by absence or are ready to drop what they are doing – and get paid – for covering those extra hours when more hands are required.

Many extra shifts will of course be covered by the additional hours of existing staff. But the variation in operational need can be far more significant than that which can either sensibly or legally be met by ‘regular’ staff through overtime alone, and businesses must have the ability to cover such eventualities without employing and paying staff for hours that they simply aren’t needed.

Naturally, there are those opposed to the idea that employees should have anything less than ‘proper’ contracts of employment and that rubbishing the ability of firms to engage what are essentially casual staff will force companies to provide would-be employees with much more favourable terms.

But whilst this may sound like a call to arms and the raleighing cry of voices who care about the people who often need these jobs, such impractical views manifested in laws which would prevent use of Zero Hours Contracts or their equivalent would leave many unemployed people without the opportunity to work. They certainly wouldn’t get the chance to demonstrate what an asset they could be to a potential employer, and that employer could itself become even less sustainable because of the costs associated with taking on staff to deal with unpredictable growth when at times they have to behave as little more than a charity to do so.

Sadly, media portrayals of the unemployed and the dependency culture have left many of us with the idea that every person without a job or income is the same as the next and that each of them is basically looking for a free ride at everyone else’s expense.

Whilst this may be the case for some, the reality for many more couldn’t be more different. They see the value of having work and fully appreciate the opportunities that might follow. For others, having an arrangement where they don’t have fixed hours but go in to work at times which are mutually convenient with an employer is actually a positive lifestyle choice and one which many – for instance semi-retired people – may well be very pleased to embrace.

The harsh reality of all this is that like so many other areas of our over-legislated and bureaucratic governed lives, ill-considered solutions or changes brought into being simply because of media tittle-tattle or quixotic rhetoric will cause more harm than than it ever will good for all of the people and businesses who actually need practical and thought-through options most when it comes to the employer-employee relationship.

There will always be a small percentage of businesses that exploit people in every way that they can, just as there will be work-shy people who will manipulate the system to work best for them wherever it will let them. However, these are relatively few in number even if they make it into the press, and it is simply wrong that opportunities are closed down for the many businesses and workers who need them  just because of the self-serving actions of a few.

Responsible companies should be able to employ casual staff without recourse to temporary staffing agencies that cannot offer the same level of continuity as staff who have an ongoing relationship with the business, and the unemployed should be able to take up casual work and make a contribution whilst they work without fear of losing benefits or having a bureaucratic struggle to justify why – especially when it might just be the step that gets them into full time work and helps the sustainable growth of British businesses.

Sustainable business growth requires access to a casual workforce, just as many of the unemployed benefit from access to casual jobs. The Government has the ability and power to deal with this unnecessarily complex issue fairly and imaginatively to the benefit of all concerned.

But do they really want to?

 

image thanks to itv.com

Tax avoidance, foreign companies and the real influence of Utility providers on our cost of living

Utility companies are in the news again and this time for exploiting the foreign ownership loopholes that are allowing an increasing number of monopolistic companies to avoid paying sizeable sums in tax.

Were it not for the near exponential rises that we seem to experience from energy and water companies alike on regular basis, you might be forgiven for having a little sympathy with a company which is struggling to make money.

But these are companies which are not only achieving great success in securing stratospheric profit margins from the services they provide using what appears to be increasing levels of media-friendly scaremongering; they are arguably doing so without making any real contribution to the wider society that pays them whilst customers also seem to pay for all their upgrade work as well.

This situation has of course been in the making for a considerable time and whilst it would serve the political interests of some groups to blame the problem on the process of privatisation in its basic sense, it is pretty certain that the sale of shares to everyday taxpayers was never intended as a direction of travel which would result in foreign ownership, or to the cartel like behaviour which has contributed to the creation of rip-off Britain.

Coalition Government or hung Parliaments don’t lend themselves well to dealing with issues of any real importance when they are in power as we all continue to witness each and every day. But that of course is when they face issues that we as a public are openly aware of because Politicians have chosen to acknowledge them for whatever politically expedient purpose that it might serve.

The real travesty with the issues regarding utility companies and the influence that they are having on the true cost of inflation to us all – which has this week been suggested to be as high as 25% – is that there is not even the will to talk about the true impact of their actions upon us all in Westminster.

With the economic fall-out of credit-card government and the continuation of spending with money that the UK simply doesn’t have, reality suggests that negligible or zero percent rises in wages for the workforces operating within the commercial and public sectors alike are here to stay. That benefit and service cuts will remain the uninventive and ill-considered weapon of choice used by a political elite which seems bereft of any consideration for the mechanics of life outside their own societal bubble.

However, there are choices for our leaders and within the constraints of Coalition Government or not, Politicians taking their responsibility to the Electorate seriously would and should all be using them.

Before anything else, acknowledgement that companies providing what are in fact essential services are profiteering and are misusing the opportunities that they have would be a significant step in itself. People would at least begin to feel that leaders are identifying with what real life is really like.

This would by its very nature have to been done with clarity and purpose and with much more than a mere suggestion of what action lies ahead. Another mealy-mouthed effort like that on the part of Politicians when it has come to addressing the previous actions and future behaviour of bankers simply will not do.

It has become clear that self-regulation in such key industries isn’t working for anybody but the companies themselves, and this is where those with Government responsibility should really be taking a lead.

The next step would be to regulate pricing to allow the true cost of service provision to be reflected in the prices that we pay and dictate the formula under which such Companies can raise funds for new and improved infrastructure which in most other industries would rightly come from the bottom line.

Because the services that these Companies provide are essential to everyone, profit should be capped and systems put in place through vigorous auditing processes  to ensure that clever accounting methods cannot provide a conduit through which different cost centres or budgetary areas can be manipulated to provide an enhanced dividend.

Company owners wouldn’t like this approach, but the fact remains that with services that customers have no alternative to use, profiteering before doing what is right has created a cash-cow for the few, whilst inflicting financial misery on the many in circumstances where people cannot even earn more just to compensate. That’s why foreign owners have been so happy to throw cash in the direction of companies in the UK that governments most other Countries would at least keep very close to State control and why our Politicians must now recognise the power and influence that these industries actually have in our everyday lives.

Finally, the time has long since passed when simplification of the Tax system was required on a comprehensive basis to stem the flow of revenue from leaving the Country that we desperately need and to which we are entitled.

Tax should be applied at the point of sale; not at the location where the account managers and owners  are based. This one simple and realistic change could find tax raised from the tills where coffees are physically bought; from the sale on the actual computer and screen where products are purchased; and from the meters where our power, gas and water are measured and supplied inside the houses in which we live.

Scary as the prospect of taking on the industrial and financial monoliths might seem, it is for reasons just like these that Politicians are Elected and why Governments are given power. It might not be easy, but if those who seek our votes at Elections take the trust we have given them seriously, it necessarily follows that they will use it for our benefit too.

Isn’t it time that they started living the mantra ‘action speaks louder than words’, rather than simply just paying lip service to it?

image thanks to source unknown

The 2013 Budget has created more perspiration than aspiration for those who keep on paying the Nations bills. It’s about time the Coalition Government started growing balls on their own Bench, rather than gifting their Opposition the opportunity to do it for them

March 22, 2013 Leave a comment

This week’s Budget has been received differently by us all and in a manner which illustrates all too clearly how shallow Policy making has now become when imbalance and impact are considered.

Talk of support for working mothers with young families, tax free loans for first time home buyers and even a 1p drop in duty on a pint of beer have done little to disguise the fact that there are so-called  ‘winners’ and then real losers at every turn. The Chancellor has done little to give any credence to his ‘Budget for an aspiration Nation’, other than the complexity of the words he used to speak this statement.

As a culture which now thrives on the use of labels and stereotypes, we have happily painted ourselves into a set of social pigeon holes where many of us hide from the realities which we share with many others. Successive Governments have formed policies on this basis which has left very few of us with any immunity from the pros and cons of a Taxation and Benefits system where the only thing universal is its level of unfairness and the disparity that now fails us all through its application.

Getting to grips with economic problems which are continuing to grow at an alarming rate will not be achieved by tinkering around the edges. Nor will we as a Nation be insulated against the gathering storm of explosive financial issues within the European project, such as those in Cyprus, unless Government begins to consider all Policies in terms of how they will impact upon all others and not just in the isolationist manner that they have continued to do so up until now.

A truly balanced and fair approach to formulating Government Policy now seems to be the most alien of concepts to our Politicians, particularly when party politics has been the long accepted means by which to target benefits to those whom are considered to be your bread-and-butter support.

But until the time that Politicians accept the principle of fairness in a meaningful way as a guide to Policy making, and particularly where Taxation and Benefits are concerned, nothing for anyone else outside the Westminster Village is going to change.

Government will soon have no option but to use systems such as a Flat Tax and wholesale simplification of the Taxation System if they genuinely want to treat everyone fairly whilst encouraging growth, prosperity and ambition in a way which balances the books.

Benefits must be targeted and restricted for the use of those who genuinely need them using common sense as a guideline, rather than the culture of tick-boxes which allows so may to play the System within a politically correct and fearful age.

Above all, Politicians must now accept that Policies created on the basis of improving rights in the workplace have now gone so far beyond their point of good, that they have made some of the very jobs they were created to improve unaffordable to the employers who at one time provided them.

Whether Westminster likes this as a truth or not, each and every Government Policy in existence today interchanges with almost every other, through the impact it has upon the lives of us all. Policy implementation may have its benefits to some, but this has for far too long been at the unacceptable cost to the many. This has to change.

Government is not the same thing as a business, and should never be run like it is one

AU491810_942longThe word ‘business’ conjures up different meanings for different people, depending on their background and of course what exposure they may have had to its use or application.

Most will agree that its use as a term suggests enterprise and methods of working which would sit snugly within a commercial environment. But should this word actually be applied to the modus operandi of any form of Government when the two terms are completely incongruous?

Much is made of the idea that the best people to run Government at any level are those who have a business background. One of the current arguments against the demographic makeup of our MP’s today is the substantial lack of solid business experience possessed by those who lead the Country from Westminster, with the accompanying notion that MP’s who have run or owned businesses of their own would somehow automatically have an almost esoteric level of understanding and midas touch which would solve just about any problem. They wouldn’t; they don’t and they never have.

With years of Local Government experience as both an Elected Member, an Officer and from working within 3rd Sector Organisations alongside, I have also often heard the term ‘business case’, ‘business plan’ and the idea often suggested that Councils are now run ‘like a business’ in meetings.

The problem with this is of course that the political leadership and members of Councils rarely have ‘hands on’ experience of running any kind of business you could draw reasonable parallels with themselves, and when they do, it is often the case that it has been so long since they did so, that any lack of an appreciation that time moves on or that things continually change will soon erode any tangible benefit.

Perhaps worse is the ability that Officers and Civil Servants have been gifted by political demographics and the opportunity to use such terms in plans, which are then taken as read by those who simply don’t know any better as being a true ‘business case’, when such ‘business’ cases could never be any such thing.

Recognising the differences between running a business in its purest sense, and running Government under the delusion that it can be run as business has never been more essential for today’s politicians, because neither Central or Local Government are businesses, and the people running them have to stop believing and behaving like they are.

A business is of course run for the profit of an individual or shareholders. All decisions will normally be made with the form of pay-off that they will receive firmly in mind. It can be expanded or changed to meet the demands of customers as it sees fit, and a business can choose which customers it may wish to target and how much profit it will seek from delivering any particular product or service. Its revenues are never guaranteed.

On the other hand, Government does not run to make profit, but to provide services and support for all those which it has been elected to serve.

Run properly, Government would not actively target any particular group of customers to provide a different quality of service depending on the feedback or profit that it gets from that group, and would work to meet demand for services as best and prudently as it can, well knowing that it has a duty to do so without seeking payment from one customer to pay for the benefits of another, or to irresponsibly borrow money from lenders that it knows it doesn’t have the appropriate levels of revenue to comfortably repay.

However, Government revenues – as long as they remain sensible – will always be guaranteed, and it is with this significant difference that come the even greater levels of responsibility than no one business should ever realistically be able to have.

One of the greatest dangers facing us as a society comes from the fact that politicians at all levels of Government have either failed to recognise these basic differences and therefore maintain them, or have willingly abused their ability to raise revenues to cover badly managed services or implement policies without any due regard to striking the balance for every member of this society or in applying fairness to all, while they have given every thought to political expedience and electability.

The British political system is broken, because it has adopted those very same values of a profit-making business, which are to further the interests of that business. For politicians, this comes in the form of power, whilst they have ignored the basic rule of business as they have done so; the rule which states they must deliver profit to every single one of the shareholders rather than to themselves. Profit in this sense should always be seen as the delivery of the same results for all.

So if our politicians really feel that they have to treat Government like a business, they then must also realise that if they continue to keep raising the fees on the same old products time and again without offering new products and value for money, they will soon price their offerings way beyond the purse of the people who normally pay, and the cash will soon start ceasing to flow.

Government is not run for a financial profit, any more than it should ever be so for the bottom-line benefit of just the ‘staff’.

Whatever their backgrounds, experience and level, politicians must remember that they are the managers; the facilitators; the decision makers; not the beneficiaries themselves – and especially so where the end profit is not even perceptively the same as what it would be for a business.

The time has long since passed when the electorate could continue to live decent lives, whilst those within Government continue to focus on the end result for themselves. Government is not the same thing as a business, and should never be run like it is one.

Osborne’s threats to break up Banks: True banking reform will take leadership by example rather than the issue of diktats to the financial leviathans for whom God is profit first and the interests of the very customers who keep them there come a distant second

February 7, 2013 Leave a comment

Commercial Altruism is perhaps an aspiration, but a term which certainly describes the kind of ethics that we need to see exhibited more often within industry and certainly within the Financial Sectors where its absence has been so painfully apparent.

Any resistance to George Osborne’s plans to require Banks to split their retail and less-stable investment arms in attempt to avoid further Taxpayer-funded bail-outs will hardly come as a surprise,  and particularly so when politicians themselves hardly exhibit anything near that type of mentality. But is this really all that the Government actually has within its power to do?

Few could actually believe the sums thrown at the rescue packages of the Banks which had effectively beached themselves through little more than acts of greed and complete disregard for anything other than maximising profit on the part of a few – all at the cost of people who have paid perhaps not just once through fees; but twice by then paying out on the losses when speculation – upon what is effectively thin air – crashed to the floor, as anything without true foundation surely would. The true wonder is how they kept the charade going for so long.

Forcing banks to ‘ringfence’ funds and therefore prevent further Government intervention through the creation of dedicated retail arms, is hardly likely to encourage a growth in benefit to domestic or small business customers. It is in fact more likely to increase the cost of basic banking services to people who already struggle to make ends meet and to those small businesses that need to be subsidised themselves, rather than to be given no option but to subsidise focussed services that banks are currently reluctant to give.

The development and provision of a an easy-to-access or ‘peoples’ bank which would provide the basic account services that everyone is entitled to access is the responsibility of Government, and should be set up as such.

Providing basic free-banking services in this way would provide Government with many advantages such as access to unfettered borrowing streams without 3rd party profit margins being included. But it could also support the administration of ‘smart’ card payments to retailers by customers, restricting the purchase of certain items by those being encouraged into work, with the added benefit of instantly losing the stigma which would be associated with payments made with a non-bank-derived payment card.

Better still, a Government-based bank run as a public service and with a customer focused culture, rather than one based upon benefits to employees and stakeholders may be able to provide many of the products which those on low incomes currently seek such as ‘payday loans’ without the utterly unrealistic levels of interest, and also provide the low-cost services and low-margin lending which new and existing small businesses need in order to survive and then thrive as we have so very long been seeking.

Creation of such a new bank – or indeed adaption of one of those that the Taxpayer already owns – would require a radical change in thinking and the type of leadership which has been sadly lacking in British politics for far too long. But it could be done.

The real question here is whether the Chancellor and the Government really want to affect change in the way that the Financial Sectors operate.

True banking reform will take a lot more effort than simply telling the banks to split their operations or even go back to employing managers within every branch.

Reform will take leadership by example and the provision of the best services possible for those who have the least money first; not by sound-biting newsworthy diktats to the financial leviathans for whom God is profit first and the interests of the very customers who keep them there come a distant second.

Labour’s ‘jobs guarantee’ for the unemployed: Politicians should guarantee their own jobs by giving industry the policies and systems that work for business so that business itself can start working for us all.

January 4, 2013 Leave a comment

Tackling unemployment should be an issue for any Government. But Labour’s attempt at generating meaningful headlines with meaningless content will do little to reassure either business or the unemployed about what the post 2015 future may hold. It will also do little to enhance Labour’s kudos on matters of care for the elderly if they are planning even more ‘Brownite’ onslaughts upon the pension funds of those who are already working.

Subsidising low-paid jobs does little to incentivise those who have not already taken them, but does a great deal for companies who need and profit from a low-skilled workforce; staff who require minimum induction or ongoing training alongside next-to-no supervision; all packaged neatly within a low-risk environment.

People should not be fooled either by the idea that cash-strapped charities would immediately benefit from having unskilled staff delivering services which may currently be undertaken by experienced volunteers, when such staff themselves would in all likelihood require supervision at much greater cost.

Perhaps I will not be alone in seeing the irony that the only businesses which can therefore profitably gain from the implementation of these ideas are primarily the big retailers, who are already targeting such groups for their shop-floor staff pools and don’t actually need Government money to help them do so.

The retail fat-cats must surely be laughing themselves all the way to the bank as they thank the gods of democracy in anticipation of the delivery of such idiocy made manifest in political form.

Getting people of all ages into work isn’t just about job creation. It is about empowering business, education and developing skills based upon the strengths of the individual, rather than devaluing the future of a whole generation on the basis of the weaknesses of groups.

If Westminster politicians were to adopt a more reasoned and practical approach, they might conclude that tackling employment issues tomorrow might be better served by tackling the causes of unemployment today. They might also conclude that the unemployed and disenfranchised young people of today, may well become the long-term unemployed and unemployable of tomorrow. Can it really be that difficult to see how many of these issues actually roll into one when you think ahead?

As Education Secretary, Michael Gove has impressed many with his fervour to return a world-class British system of education for school-age children. But will that really go far enough if it actually happens?

Children are always different and will always react differently to education. Some work best with their heads, whilst some will always work better practically and ‘with their hands’. Any system of schooling which therefore doesn’t recognise that difference and more importantly cater for it, is going to fail many of those who might otherwise go on to succeed – especially when that difference may just have been a simple issue of age and time at individual level.

Returning to a fully parallel and universal system of academic and vocational education from the age of 14 would be akin to pushing the first domino in a whole run of social issues concerning us now and for the future – however ‘un-PC’ they may be.

Removing red tape and legislation that currently prevent businesses of all sizes from employing teenagers at realistic wages during realistic hours and within the real-world employment environment, could give non-academically inclined children the real hope of attaining like-for-like qualifications through the timed-served, rather than the academic route.

Creation of the ‘apprenticeship-degree’ would bolster the competitiveness of British Industry and business of all sizes which themselves would then be able to draw upon an affordable pool of trainees, making investment in their future entirely more feasible; whilst taking Young People off the streets, giving them value in themselves, money in their pockets and taking them away from crime which the Country can already ill-afford to tackle.

Savings to Government from no longer filling what are arguably wasted places in schools could be significant, even if some funds were then redirected to tertiary and higher education colleges which support the vocational route for many of what would be the mile-stoned route to that real and vocationally-based degree. And let’s face it, degrees need to regain the value that the one-size-fits-all mentality of the last Government did much to destroy, whilst giving all those who actually want to work the opportunity to do so.

Getting the unemployed who want to work into work will always be a job done better by employers. Politicians should guarantee their own jobs by giving industry the policies and systems that work for business so that business itself can start working for us all.

Rail fare hikes and tough talk on welfare waste: Today’s problems will not simply be solved by continually taking more from pockets when there is even less to replace it.

January 2, 2013 1 comment

With a 4.2% average rise in ticket prices hitting rail commuters today, just how long do politicians think that rises in the cost of essential services, utilities and products will remain ‘sustainable’?

Stories such as this one and also the attack on welfare payouts by Iain Duncan Smith in just the past two days alone demonstrate just how little emphasis there really is in dealing with the root causes of problems, which may be unpalatable to those in power, but are nonetheless very real indeed.

As a businessman with both conservative and capitalist principles, I have enthusiastically embraced the opportunity to be both enterprising and entrepreneurial throughout my career. However, I also learned very early on that there are basic laws at work within business, one of which is that costs will generally be fixed, but profit will always be variable.

Where this goes wrong in the economy is in situations where those in control of businesses are able to fix minimum profit margins and then seek the cost of investment and renewal through price hikes which usually only affect people and other businesses who themselves have no ability to raise their own incomes or margins to cover those very same costs.

Those reading this who have experience of the commercial sector in its broadest sense will know that the circumstances which generally allow this darker side of capitalism to thrive, only exist within monopolies or within industries which provide services or products which people must have; many of which were once in public hands.

The history which has given privately owned businesses the ability to dictate the ‘breadline’ or to become able to ‘profit in misery’ is a long one. Profligate spending by idealistic politicians who believe in the principle of something for nothing, simply created a situation which left others with a more realistic understanding of the way that an economy really works with little choice in the way they had to respond.

The age of privatisation was soon born and responsibility for its evolution cannot be levelled at the door of any one Conservative, Labour or Coalition Government, as all have played their part since the 1960’s.

What can equally be said is that no one person who can ask for the votes of many thousands of people, can reasonably expect to retain any sense of respect as an MP if they have accepted that responsibility and then failed both to recognise and then to act upon the damage and pain that such levels of power are causing in the wrong hands.

Yes we need travel fares that make a job worth travelling for. Yes we need reform of welfare, benefits and taxation so that there is an incentive for all to work and stay in this Country. Yes we need managed investment in just about every area of life and infrastructure that we could conceivably imagine.

But we also need Government which is responsible, confident in taking risks and ready to deliver reforms which may well include legislative restructuring of businesses offering essential services in order to limit what they actually make.

The failure of Government to ensure and safeguard basic costs for independent living is a root cause of many of today’s problems and will not simply be solved by continually taking more from pockets when there is even less to replace it.

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