Pensions in an independent Scotland

The Scottish Government has published a paper ‘Pensions in an Independent Scotland’. Its main aim is to reassure voters that their pensions will continue to be honoured in an independent Scotland with continuity of systems and regulation.

State Pension
The eye catching headline “Scottish independence: People in Scotland could get pensions earlier” is not quite what the paper says. The actual commitment is, “we would also reserve judgement on the increase to 67 between 2026 and 2028”. This means that the increase from 65 to 66 will be implemented and they will ‘reserve judgement’ on the next step.

They are also proposing, “An Independent Commission on the State Pension Age would be established and tasked with considering the appropriate rate of increase of the State Pension Age (SPA) for Scotland over the long term.”

The retirement age has come under attack variously as a ‘gimmick’ and ‘unaffordable’. It may well be a gimmick as the actual commitment is a pretty modest review, but it is not necessarily unaffordable. The main factor in costing any pension scheme is life expectancy and this is significantly shorter in Scotland. In the occupational schemes I have negotiated this typically delivers a significant saving. However, that is also balanced by the concomitant higher death in service and higher number of ill health retirements in Scotland. This doesn’t immediately impact on state pension payments in an independent Scotland, but it will impact on higher benefits and NHS spending and that is ignored in the paper.

We should also not forget that the real disgrace in Scotland is the huge disparities in life expectancy – nearly 30 years difference between the poorest and most affluent communities. Life expectancy is linked almost entirely to income and many men and women in our poorest communities will not live to collect a pension.

Occupational Pensions
The paper also promises that, “Occupational and personal pension rights and accrued benefits would not be affected by Scotland becoming independent. An individual’s occupational or personal pension will already set out the retirement benefits which will be granted under the particular scheme and under which conditions.”

They will also continue with automatic enrolment and establish a Scottish equivalent of the National Employment Savings Trust (NEST) providing a workplace pension scheme focused on people with low to moderate earnings, which would accept any employer wishing to use it. Somewhat unimaginatively, there are no proposals to address the problems highlighted by the OFT last week, including huge management fees charged by funds. Other small countries, like Holland, do much better and this looks like a missed opportunity to offer a better pensions system in an independent Scotland.

I was making the point on the BBC this morning that the state pension does not provide an adequate income in retirement and we should put as big a focus on occupational pensions. People are working longer, largely because they have to, and this is impacting on the high levels of youth unemployment in Scotland.

Pensions protection will also remain unchanged with the commitment that, “The Scottish Government will ensure that arrangements for an effective compensation scheme are established, mirroring the level of protection provided in the UK Financial Services Compensation Scheme.”

A number of commentators have highlighted the problem with the EU IORP Directive that requires cross border pension schemes to be fully funded. The Scottish Government’s solution is to negotiate transitional arrangements for cross border schemes. Obviously this may just be wishful thinking, but in practice many schemes are large enough to split and that gets around the Directive as well. More disappointing, is that the paper gives no commitment to fully implementing the Directive in relation to local government funds. As we have highlighted, these funds should be separated from day to day council funds and could be better used to support the Scottish economy.

In 2016, the UK Government is planning to penalise employees who make sensible provision for their retirement in a contracted out pension scheme, by hitting them with a 1.4% increase in NI contributions. Employers will pay an additional 3.4%. The paper confirms that the UK Government estimates that the revenue raised through ending contracting-out for DB schemes will amount to around £6.1 billion in Great Britain in 2016. This is estimated to amount to around £520 million in Scotland in 2016. Of this around £320 million is estimated to be from public sector employers, £130 million from public sector employees and £80 million from private sector employees. Sadly, instead of returning this to workers and employers, the Scottish Government proposes pocketing this cash to their Treasury, in the same way as George Osborne plans.

The paper recognises the big changes in public service pension schemes that are currently being rolled out. The Scottish Government has meekly implemented the UK Government proposals and is not proposing to reverse any changes. The commitment is that, “In an independent Scotland, all public service pension rights and entitlements which have been accrued for fully or executively devolved schemes would continue to be fully protected and accessible. There would be no difference to individual contribution rates or benefit levels as a result of independence.”

The current level of spending is set out in the paper including a table on page 95. However, this overstates costs as it does not include the impact of current changes. I would also have expected some actuarial calculations on projected costs and the paper is weak in this regard.

The paper does recognise that the, “average funding level of the LGPS scheme in Scotland (the biggest fund) has been significantly better than that of the scheme in England and Wales and is currently around 10% (or £2.5billion) better funded than the scheme overall in England and Wales. This would suggest that the LGPS in Scotland is significantly more sustainable than its counterpart scheme in England and Wales.”

Conclusion
Overall, this is a useful paper that describes pension arrangements in Scotland well. The headline on pension age is actually something of a distraction. It seeks to present a ‘steady as she goes’ picture of pensions in an independent Scotland in line with the general ‘Yes’ campaign strategy of reassurance. It therefore lacks imagination and doesn’t address many of the faults in the current system, some of which could be addressed using current or extended devolved powers as well as through independence.

Government spending in Scotland

The highly respected Institute of Fiscal Studies has produced a useful briefing on public spending in Scotland.

If we ignore the spin both sides of the referendum campaign have put on the report, it does give us a better understanding of Scotland's financial position. Some of the key points include:

Government spending in Scotland is around 9.3% of government spending in the UK, substantially higher than Scotland’s 8.4% share of the UK population. This means that spending per person in Scotland (£12,629) was 11% higher than for the UK as a whole (£11,381).

Spending as a proportion of GDP in the UK is 45.5%. Scotland ranges from 50.6% down to 42.7%, depending on how you allocate North Sea oil revenues. While this shows that Scotland more than pays its way in the UK - Scotland is also very sensitive to the level of economic output generated in the North Sea, which does vary significantly over time. The report highlights the OBR projections of falling oil revenue and a consequential £5.9bn 'black hole', equivalent to a 15% spending cut. However, oil revenue projections are notoriously unpredictable.

Household income in Scotland is a little (4%) above the UK average, but with wide variations between high and low income areas.

Spending on public services was £7,932 per person in Scotland, 16.6% (£1,128) higher than the £6,803 spent on average across the UK. In contrast, spending on benefits and tax credits was only a little higher per person. The higher spending is largely on devolved services. Revenue spending is 12.5% higher than the UK as a whole, whilst capital is 48.2% higher. This reinforces the point we were making to the Economy Committee this week on the risks of shifting revenue to capital.

There are significant differences in spending patterns in Scotland compared to the rest of the UK. We spend twice as much on agriculture and three times as much on enterprise and development. Ten years ago the pattern of spending was similar and this reflects different spending priorities in Scotland. Health and education have had smaller than average increases.

Since the introduction of austerity in 2010, Scottish cuts have been in similar areas to the rest of the UK. One exception is spending on housing and development.

Overall, a very useful study.

Libraries in peril

A survey of nearly 2000 library staff (including Scotland) by UNISON, reveals a service in jeopardy, with the public paying the price as they lose their local library or face increasing charges, dwindling opening hours and shrinking staffing levels in those that remain.

Library staff are working harder than ever to keep services running and report escalating stress levels as a result - one in four are stressed at work ‘most of the time’. This is hardly surprising given that 60% have seen full time job losses, and more than half (54%) have seen a reduction in part time posts. 79% say they are working harder to try to maintain the same level of service, whilst 57% say it is impossible to maintain the same level of service as existed before the coalition’s drastic cuts.

One third report that libraries have reduced their opening hours, and a third have introduced charges for services previously provided for free. Libraries are also placing limits on services, such as internet use, which is problematic for people who can’t afford a home computer and rely on library access to search and apply for jobs and benefits.

The position in relation to privatisation and reliance on volunteers is not as bad in Scotland yet. However, hard pressed councils are cutting library provision here and the coming budget round will no doubt see more proposals like those in Moray.

Great local campaigns like Love Moray Libraries illustrate why libraries have been at the heart of Scottish communities for more than a century. Lets keep it that way!

Scottish economy and the budget

I was giving evidence to the Scottish Parliament's Economy Committee this morning on the draft budget.

When it comes to the economy we have to be realistic about what Scottish budget can achieve. Government can support and mitigate but there are limitations. However, we can take action in Scotland with existing powers, while arguing for more.

My key point was that our profoundly unequal society is at the root of Scotland's economic ills with the richest people 273 times wealthier than poorest. More than 40% of those below poverty are line in work and welfare cuts making matters worse. The big structural economic issue is the shift from wages to profits and income growth for the super rich.

Austerity economics has resulted in longest and deepest recession for several generations. The recovery is taking too long and even IMF have said recently that the, "case for rapid deficit reduction in the wake of a crisis is increasingly difficult to support". The nascent economic recovery is still stuck at pre-recession levels and will stay there unless there is an increase in real wages rather than relying on private borrowing and a cut in personal savings. Employment is also stuck at pre-recession levels. The public sector in Scotland is down 52,000 jobs or 8.6% since its peak, while the private sector is down 5,000 or 0.3%. Self evidently the private sector has not plugged the gap.

The Scottish Government can support job creation through public spending and boost the 

spending power of the lowest paid through the Scottish Living Wage. This has a direct impact on the local economy. This is the time to borrow for investment while money is cheap, but we also need action on taxation and tax dodging. We are also not doing enough to rebalance the economy from financing to productive industries. This requires greater investment in workforce skills. A topical issue today in the oil industry, but it has a wider impact.

Some members of the committee were particularly exercised about the shift in funding from revenue to capital. No one disputes that capital investment is important, but there are risks if it is at the expense of revenue. There are significant leakages from capital spending, even allowing for the economic multiplier. You only have to see the disgraceful race to the bottom in the care sector, to understanding the damage revenue cuts can do.

Scotland Performs also needs a much wider range of indicators and it would help if it was kept up to date. Oxfam and the Carnegie Trust have shown how this could be done better. GDP is not the only measure.

Any discussion about the budget inevitably gets us into robbing Peter to pay Paul. There are areas of spending including the regressive Council Tax freeze and ineffective small business bonus scheme that could be redirected. Public sector pay cuts, college regionalisation, local govt funding cuts and the dead end of regulatory reform are other areas of the budget that are doing little for the economy. Government MSPs are always keen to highlight wasteful PPP spending and there is even a separate annex to the budget that notably covers the last government's PPP schemes, but ignores the SNP PPP schemes!

There was an understandable focus on fuel poverty and I explained the key elements, most of which are outside the control of the Scottish budget. But we could do more on energy efficiency with great economic spin offs. On broader energy policy the recent Audit Scotland report is a frank appraisal of progress towards the challenging targets. Spending is not at anticipated levels largely due to uncertainty over the UK energy market reforms.

Finally, we need to take a different approach to the budget, breaking away from the silo culture. The debate about ring fencing the health budget would be very different if the focus was on tackling health inequalities. You could say the same about climate change, food strategy and others. Most of the big challenges require cross cutting solutions, so why not think about the budget in the same way.

Listen to Parents

Save the Children have collated the views of parents into a great report on childcare in Scotland. There is a remarkable consensus amongst parents about what the problems are and what they need. The high cost of childcare causes real problems for families across Scotland.

Parents in work either struggle to make ends meet because of the cost of childcare or use a complex mix of support from friends and family and childcare to keep costs down. Others give up work or don’t take up opportunities to work because the cost of care makes it unworkable. Even finding out what’s available for what age group is complex and time consuming. There is a catch 22 where you can’t confirm childcare arrangements until you know when you will be working or studying nor can you confirm when you could work or study until you have childcare sorted.

What we need is to look at the system as a whole. There is still a split between childcare and early years education with one paid for directly by parents and the other via taxation. Childminders and private nurseries while regulated by local authorities are not under their control. There is no strategic planning about how many are needed in each area, in fact no one knows:
• the level of demand/need for childcare in Scotland.
• how many more parents would be working if childcare was available/affordable
• how many hours of childcare parents want/need to balance the needs of their child and the need to earn money
• what mix parents would really like between childminder/nursery provision and providing that care themselves.

UNISON is a long-term supporter of publically delivered service free at the point of use. Delivering childcare in the sameway as post five-education will make the system, simpler, cheaper for families and of a higher and more consistent standard. As an IPPR report shows that the provision of childcare free at the point of use pays for itself in increased tax income from extra hours worked by women entering the workforce. The extra hours promised in the Children’s Bill are welcome but the whole system needs to change if we are to really move forward. The findings of this report suggest that parents would welcome this change.

Framing the economy. The austerity messages

The New Economics Foundation has published a paper 'Framing the Economy: the austerity story'. They have analyised the messages the coalition uses to sell austerity economics and how effective it has been. Then they look at the various responses and how effective they are. Finally they suggest some new approaches.

Here is their suggestion of another story about Britain to show the process that opponents of austerity must begin if they want to reframe how we see the economy.

"Our economy has become a casino.

Britain used to be a country where people invented and made things. Then we decided the easy money was in money. We let the City of London grow larger and larger until it dwarfed the rest of the economy.

We felt like we were getting richer, when in fact bankers were making high stakes bets, taking big risks in order to make huge profits. Then the banks gambled everything and lost. The financial system crashed.

We were given no choice: we had to use public money to bail out the banks or risk our economy collapsing. Now, five years on, bankers have gone back to business as usual, taking lavish bonuses while the rest of us pick up the bill for their recklessness.

But that’s not all that’s wrong with our economy. We live in a country where there the rich and powerful play by their own set of rules, while the rest of us struggle to get by. Where there are people who want to work but cannot find a job, and many that do work who don’t take home enough to pay the bills. Instead of things getting better, for us and our children, we’re running to stand still.

We can’t trust the Coalition to tackle this. They’re on the side of the people who fund them: big companies and wealthy bankers. The financial crisis gave them a chance to do what they’ve always wanted to do: sack nurses, close fire stations and cut benefits to disabled people.

Our economy is down but not out. We need to focus on rebuilding what we had and investing in a better future. We will need to make big changes to create an economy that makes things other than debt. It will not be easy or quick. We need to invest in old industries like manufacturing, as well as new ones like green industries and new technologies. And we need to invest in the people of Britain.

Because we are the ones who can rebuild the country in the years to come."

Councils lose out again in draft budget

The Scottish Government’s recently published draft budget states “Local government is a critical partner in leading the transformation of public services and enabling the innovation, co-production and partnership-working that is needed to radically improve wellbeing and outcomes for people and communities across Scotland.”

Fine words, but is the Scottish Government putting its money where its mouth is?

Tucked away in an annex to the budget document is a comparison of budget allocations by portfolio since the SNP’s first full budget in 2008-9. I have extracted the main portfolios and displayed them below as a chart and a table.

What they show is that local government is the only major portfolio to show an overall reduction in spending. The cynic might say, in difficult times push the difficult decisions as far away from ministers as possible – the ‘not me guv’ school of spin.

Even these tables mask real cuts in funding. The apparent increase in funding over the next two years comes largely from increased revenue from Non-Domestic Rates. The General Resource Grant to councils is being cut from £7.189m this year to £6.971m next year and £6.809m the year after. In real terms the cut is even larger - £6.841m and £6.564m.

In addition, a significant amount of spending is either ring fenced or has to be bid for like the Council Tax freeze, small business bonus, teacher numbers, police numbers (until totally centralised), change funds etc. Ministers get to make the ‘good news’ announcements, while councils announce the pain.

No one disputes that the Scottish Government has to manage a difficult budget imposed by Westminster. But within that budget there are choices to be made and councils are clearly the losers.

Two year Scottish Government pay policy announced

The Scottish Government 2014-15 Public Sector Pay Policy will be a two-year policy for pay settlements over the period 2014-15 to 2015-16. While it only covers a limited number of public service employers, it is persuasive in other sectors.

The key features of the policy in each year are:

• A 1% cap on the cost of the increase in basic pay for staff above £21,000.
• The pay freeze on salaries over £80,000 is lifted and the 1% cap will apply. 
• All staff earning less than £21,000 per annum should receive a minimum pay uplift of £300 in each year, excluding any increase that may be paid for progression. Pro-rata basis for part-time employees.
• The Scottish Living Wage will continue to be applied. Details of how it is to be calculated will be in a later technical guide.
• Nothing in this policy is intended to interfere with pay progression arrangements and the cost of these is outwith the 1% cap. The Scottish Government is therefore not following the Chancellor on this issue.
• No Compulsory Redundancy agreements remain for the duration of their pay settlement in return for continued and, where appropriate, additional workforce flexibilities or efficiencies.

While it is a two year policy, agreements can be for one year. They can also be front or backloaded as long as within the overall cap.

It is of course disappointing that the Scottish Government has yet again followed the UK Government pay policy for most staff. This means a further 2% cut in real pay with the consequential impact on local economies. It is real wage cuts that have slowed recovery from the recession and resulted in a unprecedented shift of income from average wage earners to profits and the super rich.

It does have to be recognised that with wages making up 55% of the Scottish budget, that itself is suffering a 9% real terms cut, John Swinney's room for manoeuvre is limited. Some improvement in the weighting at the bottom end of the pay scale is welcome as is the ongoing commitment to the Scottish Living Wage. The no compulsory redundancy policy, all be it with strings, is also welcome, as is the refusal to follow the Chancellors planned attack on contractual salary progression in England. 

However, not all of these apply automatically to the largest pay groups in local government and the NHS. Local government is suffering from another real term budget cut that will no doubt be used as an excuse, yet again, not to apply the underpinning to low paid council staff.

UK Economy Unspun

The TUC economics team have produced an excellent slide presentation, UK Economy Unspun. You can view it at:

http://touchstoneblog.org.uk/the-uk-economy-unspun

It explains why the UK Government's claims about the economy are not quite true. They undo the spin in very simple slides and charts. An invaluable resource. Please share it.

And here are five reasons why George Osborne is wrong from Left Foot Forward:

1)      Plan A has not brought the growth he promised

As Will Straw points out, Osborne promised growth of 6.9% over 3 years, but instead there has only been a miniscule 1.8%. Osborne is setting the bar incredibly low for what counts as an economic victory.

2)      His government is worst in recorded history for living standards

As LFF editor James Bloodworth wrote last month, this government has seen 36 months of falling wages, which is more than under any Prime Minister on record. Prices have risen faster than wages in all but one month under this government.

3)      Osborne won’t meet his deficit reduction plan

In 2010 Osborne declared that he would eliminate the structural deficit and make sure that debt is falling as a proportion of GDP. He won’t achieve either target in this parliament.

4)      Long-term unemployment is highest since 1996

There are 915, 000 people in the UK who have been unemployed for longer than a year. This is 32, 000 more than last year. 474, 000 people have been out of work for more than two years.

5)      The rise of foodbanks

The Coalition has presided over a staggering rise in the number of people using food banks. The number of people using food banks has jumped from 128, 697 in 2011-12 to 346,992 in 2012-13.

Commission for Developing Scotland’s Young Workforce

Having had, an admittedly quick, read of the Wood Commission’s interim findings it’s a bit disappointing that there are no recommendations to tackle gender segregation in workplaces and modern apprenticeships or low employment rates for people from BME communities and people with disabilities.

Wood Commission’s interim report offer recommendations on the “educational offer to young people“ with the next session on employer’s support still to come. The recommendations are somewhat predictable, schools and colleges to develop better links with local businesses, and more focus on economic development. Nothing new here: businesses want the public sector to ensure young people are ready to become workers.

What is disappointing though, is that tackling inequality does not appear to be core to the commission’s thinking. The foreword says that “An appropriate title for our school/college vocational initiative would be ""attainment for all", enriching school education with clearer and more open routes for all young people,” but we will have to wait for the second half of the study to find out their the results of their plan to “look to make meaningful recommendations to improve employment outcomes in relation to gender, disability and ethnicity.” The issues Scotland’s people face from discrimination on the grounds of gender, disability and ethnicity should have been central to this report. Allowing discrimination to prevent people reaching their potential and so contributing most to our society and economy should have been to use the jargon “mainstreamed” into the commission’s work.

The fact that the interim report only mentions gender in order to park it for another section does not fill me with much confidence about their recommendations. Equalities issues need to run through all of the work done to improve workforce development; they are not a separate issue.

UK Government's 'Red Tape' review of equality duty

The UK Government has published its review of the Equality Duty under the ‘Red Tape’ challenge programme. As Scotland has its own public sector duty this report mostly focuses on the English duty.

The main conclusion is:

“The Steering Group believes it is too early to make a final judgement about the impact of the PSED, as it was only introduced in April 2011 and evidence, particularly in relation to associated costs and benefits, is inconclusive. While the Steering Group has found broad support for the principles behind the Duty, the review has found the main challenges lie in its implementation, which varies considerably across the public sector.”

When you read the report it churns out much of the predictable ‘Red Tape’ ideology in its high level messages. However, when you dig deeper the most notable feature is that business interests largely ignored it. The annex of those submitting evidence shows that virtually no business interests even bothered to submit evidence. Strange when we were told this review was necessary because of the concerns of business.

As TUC General Secretary Frances O'Grady said:

“This review has exposed the government's Red Tape Challenge as a waste of taxpayers' money. The fact that businesses have failed to engage with it shows they are far too concerned with real issues like access to finance to humour a futile political exercise. The review has however highlighted where the public sector duty has made a difference to people's lives. It was the duty for example that halted the government's disgraceful 'Go Home' vans, which drove through London over the summer. Ministers should use this review to help public bodies share best practice on how to use the duty more effectively.”

The report does make at least one useful point that also applies in Scotland. Far too many Equality Impact Assessments are just ‘tick box’ exercises. However, the solution to that is a more rigorous process and better data collection.

A thousand council workers to fund one fat cat pension

The hypocrisy of top bosses is highlighted by the TUC's annual Pensions Watch survey. The  average pension pot for a FTSE 100 director increased by £400,000 last year to £4.73m - with one director alone amassing a huge pension pot worth £22.2m.

I was reminded of a TV interview earlier this week when the fat cats union, the CBI, were responding to calls for expanding the Living Wage. He solemnly lectured that these are hard times for all of us. Well self evidently they are not for his members. The UK's top bosses continue to enjoy platinum-plated pensions, with most still able to retire at 60. The average accrued pension is 25 times the average employee occupational pension £10,452 a year. Of course, these are the same fat cats who lectured us about 'gold plated' public sector pensions

The latest PensionsWatch findings show that rather than exercising restraint on their remuneration packages, Britain's top bosses are simply finding new ways of rewarding themselves. As pensions don't even bother with pretence of performance-related, there is no justification for this growing pensions divide. Private sector companies should follow the lead of the public sector and ensure that all staff are entitled to the same pension terms and conditions, irrespective of their seniority.

With millions of people joining workplace pension schemes over the next few years through auto-enrolment this divide will come under ever closer scrutiny. It's time companies created a level playing field when it comes to their pension schemes.

I find this hypocrisy particularly galling at present as I am spending much of my time renegotiating the Scottish Local Government Pension Scheme. Not because it needed any renegotiation, but because the UK Government decided to interfere in Scottish pensions on the back of the gold plated campaign by these hypocrites. Lets also not forget that Nick Clegg was one of those shouting about gold-plated pensions. 

The changes I am negotiating all have to be cost neutral. No prospect of a £400k increase in total let alone for one person. The average pension in payment in Scottish local government is £4700 - barely bronze plated. That means it takes 1,000 council workers pensions per year to fund the pension pot of one fat cat.

If you need any further example of how unequal our society has become - look no further than pensions.

Just pay your taxes

It seems that Mike Russell is exploring ways of encouraging philanthropists to take on a role is Scottish schools. The cabinet secretary was speaking this week at a conference organised by the David Hume institute. Lindsay Paterson presented his report: Outstanding Students and Philanthropic Contributions in Scottish School Education” at the event. Here Professor Paterson lays out ways in which “the imagination of the philanthropic entrepreneur can be brought to bear on providing opportunities for outstanding students to flourish”.

It’s great that people want to give money to support Scottish education but there are also risks. Lindsay Paterson is right to say that we have to retain democratic accountability in policy making. The Herald also rightly raises concerns about whether such a scheme will widen the existing gap between top and bottom. Too many children fail to achieve their potential.

What happens to pupils with outstanding talents isn’t really the issue in Scottish education. The outstanding students in Scotland already match the outcomes of the highest achievers in international comparisons. Last week at another conference on inequality in education I learned that in maths the highest achieving children match those in Hong Kong but at the other end of the scale we rank alongside Turkey. The issues are why the outcomes are so poor for those from deprived backgrounds and how to raise their attainment. As Mike Russell said “promotion of greater social justice and greater equity in educational outcomes for all our children and young people” should be the priority for government initiatives. Fresh ideas and energy are always welcome but schools need adequate secure funding, (not tied to the whims of big money donors) and education professionals, trained to high standards in order to achieve these goals.

Another way forward would be if those who have lots of money who want to support our schools just pay their taxes at a decent rate. That’s how we maintain democratic control over spending. They wouldn’t get a flashy building or fund with their name on it but they would be able to help a lot more children reach their potential.

More Business Rates Cuts

The Scottish Government has annouced it plans to allow councils to adjust business rates relief. Business rates and reliefs are set for all Scotland by the Scottish Government and funds distributed to councils under a set formula. The new plan will allow authorities some scope to vary the relief they offer local businesses. The Government claims this is both a boost for business and significant empowerment of local authorities. This plan highlights the Scottish Government’s commitment to reducing business taxes. We are more concerned with having enough money to pay for public services.

Another question is: is this really as Derek MacKay claims
“allowing them to respond to the needs of their communities”?

All that is actually being offered is a choice over where and how much councils can reduce business rates. Nowhere are councils being allowed to increase their income. Earlier this year UNISON showed how council’s were increasing charges to residents in the face of budget cuts. Businesses benefit from local government services and should pay towards the costs of delivery like the rest of us.

Instead of a national system where councils can choose where to make reductions it would be better to allow local authorities to set their own business rates. This would give them a valuable leaver for both economic development and funding to pay for services and infrastructure. Local control would be a much simpler and cheaper system to operate rather than a complex set of local reliefs. That really would be allowing them to respond to the needs of their communities.

Scottish Government unveils programme for coming year

The Scottish Government has published its legislative and other activity programme for 2013/14 - 'Empowering Scotland'. This briefing highlights the main legislative proposals that impact on UNISON members.

Budget Bill

The annual Budget Bill provides Parliamentary approval for the Scottish Government’s spending plans. The draft spending plans are usually published at the end of September and will address the further spending cuts imposed by the UK Government in the Chancellor's June statement. This will include some £400m of revenue cuts with the consequential impact on services and jobs.

Revenue Scotland and Tax Powers Bill

This Bill will establish Revenue Scotland as the tax authority which will be responsible for collecting taxes devolved to Scotland in the latest Scotland Act from 1 April 2015.

Community Empowerment and Renewal Bill

The Community Empowerment and Renewal Bill will include measures designed

to: strengthen joint working and accountability in Community Planning Partnerships; strengthen community voices in shaping and delivering outcomes; make it easier for communities to take on public sector assets; streamline the community right to buy; bring clarity to the common good and allotments; and make it easier for local authorities to recover costs in respect of dangerous and defective buildings. UNISON Scotland's response to the consultation expressed concerns that this Bill could lead to further privatisation and centralisation of democratically accountable local services.

Courts Reform Bill

This Bill will take forward many of the recommendations from Lord Gill’s Scottish Civil Courts Review including a new Personal Injury Court. UNISON is concerned that these proposals together with the Damages Bill will downgrade personal injury claims with the consequential impact on health and safety.

Licensing Bill

This Bill will change aspects of alcohol and civic government licensing including new powers to regulate sexual entertainment venues. It will create a new licensing regime for air weapons that have been devolved to Scotland.

Food Standards Scotland Bill

This Bill will set up Scotland’s own food safety and standards body, Food Standards Scotland. Its primary concern should be making sure that food is safe to eat. However, UNISON has identified concerns over the introduction of 'light touch' regulation as a result of lobbying from some in the food industry.

Mental health and adults with Incapacity amendment Bill

This Bill aims to improve the operation and efficiency of the mental health and adults with incapacity legislation for service users and practitioners.

Scottish Welfare fund Bill

This Bill implements the new discretionary Fund to provide vulnerable members of the community with a safety net in an emergency. The Bill will make provision about how the Fund will be delivered, what the public reporting arrangements will be, and how applicants to the Fund might challenge decisions.

Housing Bill

This Bill will end all right to buy entitlements for social housing tenants; create a new Housing Tribunal to resolve disputes in the private rented sector; strengthen the regulation of Letting Agents; increase flexibility for landlords in the allocation and management of social housing; modernise the licensing of mobile homes and park homes; and enhance local authorities’ powers to improve the quality of private sector houses. While most of these measures will be welcomed, the urgent need is to build more affordable houses as set out in UNISON Scotland's Housing Strategy.

There are no legislative proposals on lobbying after the Scottish Government indicated that they would take over the proposals in Neil Findlay MSP's members bill. This is being delayed until later in the parliamentary term.

Current legislation

As well as the new programme of Bills set out above there are a number of Bills that have already been introduced and these will conclude their parliamentary stages in the coming year. These Bills include:

➢ Scottish Independence Referendum Bill

➢ Children and Young People Bill

➢ Regulatory Reform Bill

➢ Marriage and civil Partnership Bill

➢ Public Bodies (Joint Working) Bill

➢ Procurement Reform Bill

➢ Criminal Justice Bill

There are UNISON briefings and submissions on these Bills on our website.

Other Measures

This programme also describes other planned government activity for the coming year. There are three key themes:

➢ accelerating economic recovery and creating more jobs;

➢ creating a fairer Scotland and empowering communities; and

➢ mitigating the impacts of austerity on people in Scotland.

The coming year will also include the independence referendum on 18 September 2014. Unsurprisingly, this is a constant theme within the programme. The programme confirms that a White Paper containing the Scottish Government's detailed proposals will be published in the autumn. No date has been specified in this programme.

Conclusion

This legislative programme and other government activity will have a significant impact on UNISON members. However, the legislative elements are not huge and it is very clear that the focus of the Scottish Government is on the independence referendum.

State pension age and inequality

A new report published by the TUC (‘Life expectancy inequalities and state pension outcomes‘) shows how much pension inequality will grow by 2028 as a consequence of the Pensions Bill going through Westminster. The Bill will accelerate the timetable for increasing state pension age (SPA) to 67. It will now reach 67 for both men and women by 2028, compared to 2036 under current legislation.

This is important not just for the state pension but because the public sector pension normal retirement age is also tied to this legislation.

Trade unions have long argued that it is grossly unfair to increase State Pension Age while vast inequalities in life expectancy exist. We know that inequalities in life expectancy at 65 based on both class and geography are increasing. 

Every increase in SPA reduces the portion of life spent in retirement. But because SPA is universal, the reduction is disproportionately greater among people with a lower life expectancy and as a consequence those people will receive less state pension income. Male managerial/professional workers can expect to receive 17.6 per cent more than routine/manual workers from 2028. For women in the same groups the difference is 20.2%.

As the TUC say, this simply rubs salt in the wounds of life expectancy inequalities.