Another Burberry Own Goal

I found it hard to contain my anger earlier this month when I learned of the obscene pay package that has been awarded to Burberry boss Angela Ahrendts.

Following their immoral decision to cast aside decades of hard work and loyalty from their 300-strong Treorci workforce by moving production to China in 2007, I had hoped we wouldn’t be hearing from these supposed bastions of Britishness again.

The dust has barely settled on the monumental PR disaster in Treorci, but the company has been at it again this week. In a move that is sure to reinforce many people’s disdain for Burberry, Ms Ahrendts received salary, bonus and benefits – including an unspecified clothing allowance – of £3.2m for the year to the end of March. In addition she received matching share and option payouts worth £2.9m.

This cash windfall, worth more than £6 million, could have been used to keep production in South Wales. Instead, the profits from selling out a dedicated workforce, that stuck by the company through thick and thin, have been ‘trousered’ by one person.

I can't imagine how the former Troerci workers, some of who have devoted all of their working life to Burberry, are feeling now. This is yet another example of the greed of the fat cats being placed before the very people that allowed them to make a profit in the first place.

The cutlure of excessive bonuses was an obvious factor in the cause of the recent banking collapse. It handsomely rewarded banking executives for playing a high-risk, high reward strategy. It has been referred to as casino capitalism. That it is still being tolerated, beggars belief.

It is interesting that the companies that are taking a more principled attitude to the way they treat their workforce; John Lewis and Admiral Insurance are two names that spring to mind, are the ones that seem to be doing very well despite the difficult economic situation.

Perhaps Ms Ahrendts and the rest of the overpaid fat cats, from whatever sector of industry they work in, should take heed.

Higher Equality Something to be Proud Of

‘Ageing, health and wealth – the differences across the UK,’ produced by The Office for National Statistics (ONS) recently gave several reasons to be cheerful for those of us living and working in Wales. Levels of inequality are lower here than anywhere else in the UK. Not only has Wales the lowest variation in household income in the UK, but it has seen the greatest increase in average income; rising 16% over the three-year period between 2004/05.

Some other facets of the report show there is more work to be done; for example, far too many children that are brought up in jobless households.

Good news overall? Not for the Confederation of British Industry (CBI). David Rosser, the director of the CBI in Wales, said that this report provides evidence that Wales needs to attract more entrepreneurs and people with higher salaries. Mr Rosser was joined by along with JoJo Maman Bébé founder Laura Tenison in using the report as evidence that Wales needs more super rich people.

Living in a country where equality is greater than anywhere else in the UK should not be derided. Do families struggling to make ends meet in inner city areas such as Bethnal Green or Canning Town feel blessed that the region in which they live has such a high concentration of high earners? Its doubtful.

I'm not sure why the thoughts of the CBI were given such prominence in the Western Mail’s front page story on the ONS report with the headline 'Lack of Top Earners Holding Wales Back.' As the Joseph Rowntree Foundation suggested much further down in the report, Wales does have bigger worries than a dearth of super-rich business men and women.

Common Sense Cuts

It was refreshing to hear the Howard League for Penal Reform and the probation officers’ union, Napo, bring a bit of common sense to the public debate this week on how best to cut the budget deficit. Both suggested abolishing short prison sentences on the basis that they serve no purpose whatsoever.

As unpalatable as it may be to some not to impose custodial sentences for offences such as ABH, theft and motoring, the hard facts bear this out as a win-win policy. Napo's figures show that 74% of prisoners serving terms of less than 12 months were reconvicted within two years. On the other hand, the chances of reconviction are lowered significantly if the offender is given an intensive supervision order in the community, allied with any programme to tackle underlying problems such as problematic substance use, anger or violence.

The Prison Governors' Association also waded into the debate by backing the abolition of short sentences. Eoin McLennan-Murray, the Association’s president, said small jail terms were ill-judged and stemmed from Britain’s "love affair with custody." We can only hope that this government will be an improvement on the last, which saw the prison population almost double in a decade, despite falling crime. But its not possible to forget Michael Howard’s tenure as Home Secretary.

The cost savings of such a change in sentencing guidelines may be just enough to get George Osborne’s ears to prick up. The difference between jailing offenders for 12 months or less and imposing community rehabilitation programmes is huge – anything up to £300 million per year. If the new government really wanted to find ways to save money that do not affect the most vulnerable people, they should have been prepared to take seriously proposals like the abolition of short prison sentences, as advocated by the people working in the field.

I'll declare an interest in this debate because I worked as a probation officer before my election to the Assembly and I've retained associate membership of Napo. As a probation officers in the valleys, we saw too often the same faces - usually young men who had been jailed briefly for petty offences and not had any form of rehabilitation whilst inside because there simply was not enough time. Prisons hardens many young people. It certainly makes them more likely to re-offend. We regularly saw many first-time offenders jailed for less than 12 months lose everything sometimes for just a few weeks inside; their home, their job and, in some cases, their relationship and kids. Has society improved for having punished this person with a short prison sentence? I would argue the reverse is the case.

In the old days, the Lib Dems stood for fairer and evidence-based criminal justice. They are now in government and committed to making huge cuts. This is a saving that could be made with very little pain. It should be a no-brainer. Somehow, I don't think it'll be as simple as that.

Robin Hood in reverse

Plenty of people knew that the Tories would be devastating for Wales if they gained power at the UK general election and so it proved with George Gideon Osborne’s ‘reverse Robin Hood’ budget on Tuesday. He has taken from the poorest while leaving the richest relatively untouched.

Mr Osborne prefaced his bombshell by saying his budget was “tough, but fair.” This old Etonian millionaire should ask himself if it is fair on pensioners who cannot afford to heat their homes as well as eat properly through the winter to increase the most regressive of all taxes, VAT, to 20%. Is it fair that child benefit, housing benefit, and family tax credits have all been targeted in measures that will see £11 billion taken out of the welfare system?

Is it fair that so many public sector workers will inevitably lose their jobs with Osborne’s vow to cut Government departments, with a few exceptions, by 25% over four years? Plaid believes this will signal 60,000 job losses in Wales alone. What will this do to our economy?

Yet the bankers, who by-and-large caused the financial meltdown, appear to have got off scot-free. There is to be no curbing of the bonus culture that rewards short-term risk at the expense of long-term stability. At the end of last year, the National Audit Office calculated that the cost of bailing out the banks had, so far, reached a staggering £850 billion. Now that tax-payers money is being used to prop up so many of these institutions, why isn’t the UK Government being firmer and more punitive towards them and their obscene profits? The reason is that the Tory party has always existed, and always will, to preserve the wealth of the few while paying nothing more than lip-service to the needs of the many.

But what of the Liberal Democrats, the sheepish collaborators in this coalition? Millions of people voted for their promise of fairer politics. Those voters must feel utterly betrayed now. Clegg and his cronies have allowed their mouths to be stuffed with gold.

The Con/Dem Government have now set out their stall and given us a taste of what we can expect over the course of their parliament. It is up to us now to make sure their plans to rob the poor and give to the rich are not allowed to get through with ease.

The cuts are on their way

In the last few weeks it has become clear that big cuts are coming our way. The new coalition Government in Westminster has laid out its plans to reduce the spending deficit by £6.2 billion this year alone. By their own admission, this is just the tip of the iceberg. Public sector pensions, which have historically balanced out the lower wages of workers when compared to their counterparts in the private sector, are now in the firing line.

Following Chancellor George Gideon Osbourne’s initial announcement of cuts, it has been calculated that £162.5m will be slashed from the Welsh budget. We have ‘generously’ been given the option of deferring the cuts from this year only to store up double budgetary pain next year. Some choice.

There is no doubt that in Wales, where a high proportion of workers are employed in the public sector, these austerity measures are going to bite hard. Plaid Cymru has maintained that it is wrong to force those on the lowest incomes and those who depend on public services to pay the price for the deficit, which has largely been caused by the tax-payer funded bail-out of the banks. What is more, it does not make economic sense in the long run.

We have recently heard how the cuts will be affecting Companies’ House which employs hundreds of people at locations in Cardiff and Nantgarw in Rhondda Cynon Taf. This UK Government department has been told that it must find savings of 11% in this financial year. We all hope that the workers there can avoid compulsory redundancies. The proposed pay freeze, which will hopefully stave off enforced job losses, will nevertheless hurt hundreds of employees living in South Wales. The closure of the site in Nantgarw, where 250 people are currently based, will also be a bitter blow for the local economy of the valleys. Surrounding businesses will no doubt be hit hard by the loss of the spending power of so many staff.

The Con/Dem Coalition has set its course and seems to have made up its mind to target us all. Public bodies and institutions should be looking to achieve savings in the upper echelons of their organisations, involving their workforce in the process of identifying where savings can be made. I'm sure the lower paid workers in Rhondda Cynon Taf would have a view as to whether the Jaguar car used to transport the mayor to Stansted airport or to Brighton for an awards ceremony and fish supper was money well spent.

Universities are also going to feel the squeeze. Will we see admin workers made redundant or courses scrapped while the bill for consultancy fees and Vice Chancellors pay keeps rising? Investigations by my office revealed that Cardiff University’s bill for consultants topped £3m in just three years. This was on top of a £1.5m bill for agency workers at a university where the Vice Chancellor collects £275,000 per annum.

The next few years are going to be painful enough without frittering money away on extortionate salaries, consultants and expensive cars.

The True Cost of Oil

The world is watching with collective dismay the environmental nightmare in the Gulf of Mexico following the explosion of the Deepwater Horizon rig on April 20.

Eleven workers were killed outright in the disaster which led to the rig sinking. In the longer term, the lasting consequences are sure to reach far and wide. The immediate concern is how to stop oil spewing out from the burst pipeline at an estimated 24,000 barrels every single day. BP has managed to capture some of the oil with a containment cap but thousands of litres are escaping in any 24 hour period. This has been going on, unabated until recently, for the best part of two months.

The oil spill is already the USA’s biggest ever environmental disaster with the slick having spread towards the Louisiana, Alabama and Florida coastlines. This will have ramifications for the ecology, wildlife, the fishing industry and tourism of such a large strip of America. Some beaches in Florida are already beginning to display warning signs to would-be bathers. It is extremely worrying that the oil may reach Cuba where the economy is so reliant on foreign visitors. If the oil reaches the Cuban shoreline, it could be the tipping point for a country struggling to survive as a result of the damaging trade embargoes America has placed upon it.

This is not the first time BP has suffered an explosion in the United States. The company was fined $87 million last October for failing to correct safety problems at one of their refineries in Texas in 2005 following a blast which killed 15 workers. This hugely wealthy company continues to prioritise their profits above the safety of their employees and the environment.

Now BP is facing a huge clean-up operation which they must surely foot the bill for. The cost of the clean-up has been estimated to date as £1 billion – less than one month’s profit for the company. However, much more damaging has been the £55 billion that has been wiped off BP’s value since the spill began. This will have huge consequences for the pension market in the UK since so many portfolios are invested in the company. Is it not time for the UK Government to start regulating pension funds so that they are invested in ethical companies? The Fair Pensions campaign, supported by trade unions and charities, has long called for the government to regulate pension funds so that people’s future livelihoods are protected from market failure and irresponsible corporate behaviour. The raising of the state pension, which Plaid Cymru has repeatedly called for, could compensate for any losses following on from the collapse in BP's market value.

In an illuminating article, Guardian columnist George Monbiot has argued whether BP actually delivers a profit. Despite pumping billions of pounds every year into the pockets of its shareholders, Monbiot argues this is money which should be set aside for future liabilities, much in the same way that Norway has treated its oil money. Is it ethical for BP to be making a net profit of £17 billion in 2009 without reinvesting those profits in the planet it is benefiting from, yet ulimately wrecking? Its not. Unless oil companies, and BP are by no means the only offender, begin to invest serious money in the environment and prepare for a future where our need for oil does not outstrip supply, then we are in serious trouble.

Despite the projections that the disaster will spell the end for BP, Monbiot also predicts that the company will ride out the storm and still be in business ten years from now. If that is the case, I hope they will have been forced to learn lessons from the Gulf of Mexico.


UPDATE, FRIDAY JUNE 11 - The US Geological Survey has this morning estimated that up to 40,000 barrels of oil could have been escaping from the ruptured pipeline every day before a cap was fitted at the beginning of the month. This is double the amount of oil previously thought to have been escaping.

Kicking Racism Into Touch

Last Saturday I spoke at the anti-fascist rally held in Cardiff. The reason why I was there, along with hundreds of other like-minded people, was to protest against the presence of the racist English Defence League on our streets.

This divisive band of thugs want to drive a split between white people and anyone else who is not white. They encourage people to hate. Support for far-right racist politics grows during times of economic strife, and this is why they feel strong enough to march through our streets now. It was heartening to see that the anti-fascist protestors heavily outnumbered the EDL, showing that racism is an anathema to the vast majority of Welsh people.

The main message of my contribution to the anti-fascist rally was that Wales has rejected racism time and time again and as yet, the British National Party has not been able to win an election in this country above community council level. These racist hate-mongers, whether they are BNP, EDL or National Front, are not welcome in Wales and I called for solidarity with our “Muslim brothers and sisters,” who have been specifically targetted by these groups.

I also mentioned the Rhondda’s unequivocal response to Oswald Mosley and his black shirts in the 1930s after the area had been identified as a fertile breeding ground for his despicable policies because of the high rates of unemployment. I am proud to say the black shirts were sent packing and were left in no doubt about the views of the South Wales valleys.

A special mention must be made of the Cardiff City supporters who turned up on Saturday to strengthen the anti-fascist gathering. They showed us all that most football supporters abhor racism and want all people in Cardiff to live side by side in harmony.

** Thanks to Plaid Cymru member Andrew Jinks for taking photos at the rally, including the one above. **