P&O Ferries. Ferry company P&O has come under fire for sacking 800 members of staff by video. Staff were told that they would be made redundant with immediate effect after the company had lost £100 million a year for the past two years. The workers will be replaced, with some of the new staff reportedly being paid £1.80 per hour. This makes this a controversial ‘fire and rehire’ case in which workers are made redundant and then either given worse contracts to do the same job, or replaced by cheaper alternative labour.
Government response. The Government gave P&O Ferries a deadline (22nd March) to respond to ten questions about the redundancies and has said it will review its links with the firm. Maritime Minister Robert Courts called the redundancies ‘unacceptable’.
Fire and rehire elsewhere. Though P&O’s strategy has been to fire employees in order to hire foreign workers on much cheaper wages, the Covid-19 pandemic has seen a rise in companies firing staff only to rehire them on worse contracts. This has become widespread in recent years, according to research conducted by the TUC, with nearly 1 in 10 workers having been told to re-apply for their jobs on worse terms and conditions or face the sack. The House of Commons Library has provided a useful explainer on the practice and its status in employment law.
Employment rights. The TUC has called on the government to introduce an Employment Bill which would: end fire and rehire style practices and stop companies firing at will; increase penalties on companies that break employment law; and ban other forms of exploitative practices, including zero-hours contracts and bogus self- employment under so-called ‘umbrella companies’.
Spring Statement expectations. The Institute for Government previews the Chancellor’s Spring Statement, highlighting six things to look out for. Rishi Sunak is widely expected to cut fuel duty by at least 5p and raise the threshold at which low income earners begin to pay National Insurance Contributions in tomorrow’s Spring Statement.
Inflation, profits and wages. Christine Berry looks at the political economy of inflation and the decisions of businesses to pass on the increasing cost of production to consumers through higher prices, and workers through lower wages, rather than passing them on to business owners by reducing profits.
Interest rates. Last week, the Bank of England raised the base rate of interest from 0.5% to 0.75% in a bid to curb inflation. The central bank’s Monetary Policy Committee (MPC) voted 8-1 for the rise, making it the first time in over twenty years that the Bank has raised rates at three successive meetings.
Energy security strategy. BusinessGreen’s Cecilia Keating reports that the government’s awaited energy security strategy has been delayed due to a ‘growing rift’ between Boris Johnson and Rishi Sunak over the role of clean energy in the government’s response to soaring energy bills. However, both have expressed support for renewables in clean energy recently, with the PM arguing that the UK must ‘double down’ on renewables in the Telegraph and the Chancellor writing a ‘Strategic steer to the UK Infrastructure Bank’ stressing the need to increase investment in low carbon energy and energy efficiency. (Read E3G’s response explaining how the UK Infrastructure Bank can finance green homes.)
Monopoly power in the energy sector. Common Wealth’s new report on electricity and gas distribution networks argues that a ‘fragmented system of private monopolies that delivers outsized returns for investors’ are partly to blame for rising energy bills. Common Wealth proposes a windfall tax on the UK’s 10 big electricity and gas distribution companies, which have complex ownership structures, with some based in offshore holding companies and tax havens. It argues that ‘in the long run these monopolies should be in public ownership’.
Climate finance. Jubilee Debt Campaign’s Tess Woolfenden analysed the latest IPCC report’s analysis of debt and climate finance. She concluded that ‘IPCC scientists recognise the harm of private lending deepening the debt trap facing climate vulnerable countries’ but that ‘the report returns to the orthodoxy that private sector debt issuance could provide finance to address the climate crisis. The same companies that have to a large degree caused the climate crisis are encouraged to continue profiting from it by lending at interest to the countries that are suffering the effects.’
Manifesto for a Green, Just and Democratic European Economy. Over 270 prominent academics, unions and civil society organisations issued a letter calling for reform ofing the EU’s fiscal rules to enable public investment necessary for transforming economies to hold global heating below 1.5°C.
Carbon tax and dividend scheme. Autonomy has released a report on the effects of a global carbon tax and dividend scheme. It calculates that this could effectively end extreme poverty globally, lifting more than a billion people above the poverty line of $3.20 a day. In the UK the scheme would benefit 70% of the population who would receive dividends from the scheme from the top 30% of the population, with the majority of contributions coming from the top 1%. (Read Autonomy’s Twitter thread summary and coverage in the Independent.)
Windfall tax on North Sea oil and gas firms. The FT’s Chris Giles came out in support of a windfall tax on North Sea oil and gas companies, arguing that the Chancellor should go further than Labour’s proposal of a 10% tax increase. (See also NEB Managing Editor Michael Jacobs’s analysis in the Guardian last month.)
Sanctions and taxes on Russian assets. Economist Thomas Piketty argued in the Guardian that ‘the western elite is preventing us from going after the assets of Russia’s hyper-rich’. Piketty calls for the establishment of an international financial register and for western states to levy a heavy tax on these assets.