In the UK, supporters of fair taxation, of rebalancing the manufacturing and finance sectors, and those worried about the Government’s commitment to overseas aid and tackling climate change will be redoubling their efforts to secure a Robin Hood Tax. And ahead of the NATO summit in Chicago this weekend, US union National Nurses United will lead a demonstration to Daley Plaza to call on the US Government to tax Wall Street not Main Street. Unions and NGOs in the US are gearing up for the launch of a Robin Hood Tax campaign to influence the debate around the Presidential election in the autumn.

Republican candidate Mitt Romney’s hedge fund career and events like this week’s revelation of huge losses at JP Morgan Chase have put the financial sector’s misdeeds on the electoral agenda, and will encourage further debate about how to tax the sector more effectively, continuing the earth-shaking debate started by Occupy Wall Street and Warren Buffett.

In Europe, the Commission proposal for a financial transactions tax directive will take another step forward next week when the European Parliament debates and votes on a report on the directive from its Economic and Monetary Affairs Committee. The Committee has already adopted its report in favour of the directive, and the Parliament is likely to approve the measure, albeit proposing further strengthening in line with campaigners’ proposals to make it more difficult to avoid the tax.

And on the same day as the European Parliament votes on the tax, an informal summit of EU heads of government will consider a new approach to growth in the EU, responding to the shift in political narratives away from pure austerity. This summit is also a response to the election of FTT-supporting French President Francois Hollande, and he has explicitly put the tax on the agenda for the summit.

German campaigners have already started, staging a mock marriage between Chancellor Merkel and President Hollande ahead of their meeting on Tuesday to emphasise the fact that the FTT is one measure they can agree on.

Robin Hood Tax campaigners will be out in force around the world and on the web. PCS conference in Brighton next week will see tax collectors and DFID staff donning Sherwood green on the seafront to show their support, and I’m taking Robin Hood hats to the G20 employment ministers’ summit in Guadalajara, Mexico where trade unionists from the world’s twenty biggest economies will demonstrate their commitment to make the finance sector pay their fair share to get the global economy back on track. And in Europe, campaigners will join an ETUC rally outside the EU summit and submitting a letter urging those EU leaders committed to introducing a tax to go it alone if Governments like our own continue to resist an EU-wide tax.

It’s a big week indeed for such a tiny tax.

Based on JRF’s usual high quality research we are told how some employers set-out to exploit vulnerable migrant workers. Often this is done through the creation of debt bondage. Gangmasters’ demanding fees for providing work, none payment of wages, unlawful deductions from wages or deliberately with-holding work whilst providing loans. All is done to build a total dependency of the employee on the employer. This compliance through the use of debt bondage is frequently backed up by physical and mental abuse. In addition, accommodation is also provided by the employer which means loss of job also means no-where to live!

The picture painted by the report is I would repeat all too familiar. Where other research has been carried-out focusing on low paid A8 workers, frequently employed through agencies, similar tales of abuse have been unearthed. This abuse is found across many sectors of the economy and is on-going. Without repeating all of the reports sound policy recommendations, I would highlight just one.

‘Continued government support for the Gangmasters Licencing Authority and possible strengthening of its powers’

This strengthening of powers must include a broadening of the GLA’s remit to intervene in all sectors of the economy. The JRF report makes it clear that this terrible exploitation takes part in sectors of the economy in which the GLA can intervene (food processing) and in sectors where it cannot (restaurants). The last government responded to calls for a broadening of the GLA’s remit by saying we don’t have the evidence that exploitation is going on in other sectors of the economy. How much more
evidence does a British government need to act?

Finally, there is a current discussion over the perceived preference of some employers for employing migrant or mobile workers from central and eastern Europe. For some employers there is a genuine preference and is based on an intention to exploit!

In one of the largest studies of its kind, new JRF research on forced labour exposes blatant exploitation of migrants working in UK food production, processing and restaurants.

The vast majority of the workers in the study were in the UK legally with the right to work and live here – most were, in fact, EU citizens. Food retailers must do more to monitor and audit their supply chains, and the government needs to ensure that the Gangmasters Licensing Agency is sufficiently resourced and has enough teeth to deal with illegal gangmasters.

Some workers experienced a sort of ‘underwork scam’. They’re paid to come to the UK and to live in tied accommodation with the promise of work from an agent. But the hours they’re promised do not materialise – or at best, just enough to be able to service their debt to the agent. They’re trapped by this debt and by the threat of losing their home if they try to move on. These unscrupulous gangmasters are recruiting more workers than they actually need and making money from the deductions they charge their workers as well as through providing labour.

Others spoke about a whole set of ways that the law is broken by employers and/or employment agencies. This includes:

• not being paid
• not being paid the hours owed
• and not being paid the minimum wage

In one case, wages were kept for safe keeping in the personal bank account of the employer and there were cases where piece work was not made up to the minimum wage.

On reading the report you are left with an impression of a climate of fear being present in many of the workplaces. Some workers were threatened with dismissal if they complained (it was pointed out to them that there were others queuing up to do the work); some were dismissed to avoid paying their wages and one woman was dismissed for being pregnant.

Workers talk about excessive surveillance on production lines including not being given proper toilet breaks and being shouted at. In some cases bullying is of a racist nature and there are photographs of racist graffiti in the report. Workers who lived on site or who had accommodation supplied as part of their job found that their house (or caravan) was overcrowded and of poor quality. One worker described a caravan where five people lived including one person sleeping in the lounge.

This study raises a number of questions, for example:

How prevalent is this experience within the food industry? The majority of employers and labour providers act lawfully and there are many examples of good practice. However, this phenomenon was found at 5 different sites and we have seen worker abuse like this recorded in other studies. So although we may be looking at a problem that is small given the size of the industry as a whole it would be quite wrong to dismiss it as insignificant.

How does food produced or processed using exploited labour enter the supply chain?  Illegal employment agencies and gangmasters operate right at the bottom of the supply chain, undercutting the business of legitimate labour providers. And this food is ends up in our shopping bags.

The NAO queried the cost-effectiveness of a tenth of the 219 projects endorsed by Ministers. However, the £33K average was in line with similar government schemes, and the RGF awards were appropriately targeted at vulnerable regions.

1,000 firms applied for funds, promising 328,000 jobs. A fifth succeeded. It’s worth looking at the NAO report, released on 11 May and buried under the day’s anti-austerity headlines in France, Greece and elsewhere.

The Coalition set up the £2.4bn Regional Growth Fund to encourage private sector enterprise focussing on “those areas and communities that are currently dependent on the public sector make the transition to sustainable private sector led growth and prosperity.”  The RGF was intended to help the private sector fill the gap left by public sector job cuts. The Office for Budget responsibility forecast that 710,000 jobs in the public sector could be lost between 2011 and 2017.

The Fund’s initial £1.4bn pot was allocated in two funding rounds (see table). A further £1bn was provided for in the 2011 Autumn Statement, with a third bidding round closing in June 2012. The £2.4bn budget is split between DCLG (80%) and BIS.

Bidders estimated that 64,000 of the jobs, around 20%, would be created or safeguarded directly, with the remaining 264,000, or 80 per cent, being indirect.

The government expects to agree final offer letters securing about 117,000 full
time equivalent jobs (providing work for at least 30 hours a week). However, the NAO says not all the jobs created or safeguarded, whether direct or indirect, will be ‘additional’. “Some would probably have been created or safeguarded anyway, because there is always a possibility that firms might have made the investment without public support, or would have found alternative support. Also, assisting one firm could generate a competitive advantage over its rivals, decreasing competition in the wider market.”

Taking these factors into account, the NAO concludes that the first £1.4bn of the RGF could “create, safeguard or support” the equivalent of 41,000 additional full time private sector jobs in the economy for seven years, including 13,000 direct jobs from
supported projects and 28,000 “indirect” jobs through supply chains and “knock-on effects in the wider economy”.

The Fund supports a wide range of projects, from automotive and business support and finance initiatives to ports, waste and energy infrastructure. Overall, the projects were more likely to be located in vulnerable areas of high unemployment and
“vulnerable to public sector job losses”, principally the North and Midlands.

£33K average cost per job. The average cost of each of the expected 41,000 net jobs created or safeguarded is £33,000 (range £4,000 to over £200,000). This is significantly higher than the £28,000 cost per job achieved by the Regional Development Agencies. The NAO is critical of the poor value for money of about a tenth of the approved schemes. The 27 least cost effective projects will average £106,000 per additional job. No Ministerial limit was placed on the cost per job.  “Making a significant number of less cost-effective awards reduced the cost-effectiveness of the Fund overall.”

Leverage. The ratio of private-to-public investment averaged around £6 of private investment expected for every £1 of public investment from the Fund. This ‘leverage’ ranged from similarly varies between individual projects and programmes, from less than £1 of private investment expected per £1 from the Fund, to over £19.

It’s too soon to say what the Fund’s overall contribution will be to rebalancing the economy in any particular region. If Minister’s heed the NAO advice on value for money, the combined £2.4bn RGF, including round 3, could eventually support 70,000 jobs. This assumes the Ministers sustain an average cost of £33K per job. The Fund could also leverage say six times that amount or around £14bn.

Green Investment Bank. It’s worth comparing the RGF’s achievements with the Green Investment Bank. The GIB has an initial £3bn capitalisation which, according to Budget 2011, will leverage an extra £15bn of private sector investment over the course of the parliament. This 5:1 ratio seems consistent with the leverage achieved by the RGF. However, the GIB is likely to lean towards capital intensive investments; for example, the first £100m tranche of its funds will be available to support bids for low carbon technologies from the energy intensive industries.

Welcome though the GIB’s £3bn contribution will be for the green economy, it is unlikely to match the RGF for jobs created.

While there are still many more women than  men who report that they do not want full time work (854,000 men as opposed to 4,287,000 women at the last count), there has been a notable decrease in the number of women who do not want full time work. This is matched by an increase in women who are working part time because they can’t find a full time job.

Increasing rates of part time work amongst women are often seen as unproblematic as there’s a presumption that all women with children want to work part time (never mind the fact that many are lone parents and have no other source of income, or are the main breadwinner or sole earner in a couple and cannot afford to work part time, or they simply like their jobs and want to work full time).

In fact, you don’t have to dig too deep in the depths of the ONS labour market data to see that increasing numbers of women are finding themselves in part time work, not through choice, but through lack of full time alternatives.

The number of under-employed women has increased by 74 per cent.

There are noticeable regional variations too with the number of women trapped in involuntary part-time work has more than doubled in Northern Ireland and London since December 2007.

The ONS data shows that while the number of women who are working part time but would like to be full time is on the rise, the number of women working part-time who don’t want a full-time job, often because of family and caring responsibilities, has been falling. I’ve tried to illustrate the changing pattern of involuntary versus voluntary part time work with a chart.

 Part time women who could not find a full time job (red line – right axis) compared to part time women who did not want a full time job (blue line – left axis)

With the threshold for receiving tax credits set to change from 16 hours to 24 hours, those stuck involuntarily in part time work are set to lose out yet again.

Furthermore, under Universal Credit, new conditions will be placed on in-work benefits which will mean that employees earning less than £212.80 per week will be obliged to work more hours or face sanctions.

Where all of this extra work is meant to be found remains a mystery. 

The proportion of women working part-time that don’t want a full-time job, often because of family and caring responsibilities, has also been falling. This shows that the recent rise in part-time employment has mainly come about through necessity rather than choice.

Number of people doing part-time work because couldn’t find full-time jobs,Q4 2011 (by region and gender)

(Quarterly Labour Force Survey, October – December, 2011)

The analysis suggests there is a link between between rising under-employment and rising overall unemployment, with the North East and Northern Ireland struggling on both measures.

People living in the East of England have experienced the sharpest increase in under-employment over the last four years, with the number of men trapped in part-time jobs more than trebling to reach 58,385. The North East, Northern Ireland and London have also experienced sharp increases in involuntary part-time work. The number of women trapped in involuntary part-time work has more than doubled in Northern Ireland and London since December 2007.

Percentage increases in involuntary part-time work, Q4 2007–Q4 2011, (By region & gender)

(Quarterly Labour Force Survey, October – December, 2007 & 2011)

(To download full analysis)

While we had good news last month that overall unemployment fell so too did the number of people in full-time work. While part-time or temporary jobs may be, better than no work at all, people are having to take huge salary sacrifices, reduce their hours and trade down their skills to stay in work. This is bad news for the family finances and the UK’s overall economic performance as people are not working as much and as productively as they could do.

Creating more well-paid, skilled, full-time jobs is the only way to secure a sustainable recovery that works for everyone, as it will raise people’s incomes and help them to work at their potential again.

What can Government do to create more paid work? And how do we get better quality jobs – both more fulfilling and rewarding for individuals and better for the economy? This is one of the topics being discussed at the upcoming TUC Conference – After Austerity.

With the country facing a decade of economic stagnation we need real change if we are to secure jobs and living standards for the future. At the conference, expert speakers will share their in-depth knowledge and expertise on how to rebuild the UK economy through securing strong and sustainable growth.

To view the conference programme and to register go to www.afterausterity.org.uk

But the big story really has to be the continuing decline of Chancellor Merkel’s CDU, who – again, this is according to exit polls, and I’ll update later when the final tally is in – saw their vote decline by a quarter from 35% to 26%. With Germany’s General Election due next year, this almost makes Merkel’s administration a lame duck, and it can’t even be blamed on the collapse of her coalition partners the FDP (whose vote again held up, as it did last week in Schelswig-Holstein).

In Germany’s most populous state, covering cities like Dusseldorf and Cologne, this is a major blow, and, coupled with Hollande’s ascent to the French Presidency, will put German-led austerity in Europe under increasing pressure this summer. The 23 May informal summit of EU leaders will not quite see Merkel isolated, but certainly increasingly embattled.

By the way, a lot of the comment will focus on the entry into yet another state legislature of the ultimate post-modern fringe party, the Pirates, up from 2% to 8%. But as in Schleswig-Holstein’s regional elections last weekend, their entry into the legislature has seen the left-wing Die Linke party exit the stage. So yet again, Germany has given only minimal support to the narrative that says voters are abandoning traditional, centrist parties for the extremes.

The Court was ruling on a Dutch case where the Province of North Holland had required coffee machines – of all things! - to have certain environmental labelling. And whilst the Court ruled against the Province on the details of the case (beccause it had just required certain eco-labelling rather than including the underlying environmental standards to be met in tenders), the judgment defines what the public sector is required to do to so that social and environmental objectives can be included in the procurement process.

The EU procurement directives are currently under review, and unions are arguing for clearer language on these issues, so the Court judgment will be very helpful in setting down how that language could be drafted. But the Court’s judgment is also immediately applicable to all public procurement in the UK, and the Government should make it clear to all that social and environmental standards can and should be included in all future contracts.

The Fair Trade Advocacy Office, an NGO with which trade unions in Europe work closely, welcomed the judgment. Its Executive Director, Sergi Corbalán, said “we welcome the confirmation by the European Court that Fair Trade criteria can be supported through public procurement under the current EU rules.”

As last weekend showed, it’s not safe to speculate about what’s happening in Europe, because the detail keeps changing – and this month’s plethora of Presidential, Parliamentary, regional and local elections
suggest the primacy of the bond markets may have to give way to the primacy of electorates. However, we do seem to be living between two competing narratives.

On the one hand, an argument that Europe has a serious problem of market confidence and global competitiveness which needs to be addressed by a more or less prolonged period of austerity, and a smaller state. Market confidence requires fiscal conservatism, balanced budgets not just over the business cycle but pretty much permanently. Competitiveness requires labour market flexibility, low levels of  taxation, and lower wages.

On the other hand – and this is what I think – the story is one of a lack of demand, public sector deficits driven by the need to tackle the global financial crisis and growing inequality. The solution is growth and redistribution, not austerity. This narrative envisages a programme of public investment in infrastructure rather than cuts, training rather than deregulation and greater regulation and taxation of the banks (and a more redistributive tax and benefit system generally). Unions want wages to rise in countries like Germany to restore domestic demand and rebalance trade with the EU periphery.

Of course, people don’t fall conveniently into these two camps. Growth is the new mantra; most Greek political parties, even those who eject the bailout, favour remaining in the Euro; and everyone agrees to balance the books some time! But electorates who spent the last two years punishing centre left Governments now seem to have turned their fire on the centre right, and that looks to most observers like the crunching of the narrative gears.

So what does this mean for EU employment and social law?

It suggests, I think, that we might be nearer a turning point.

Last week in Romania, the incoming Social Democratic government renegotiated its deal with the IMF to reverse a 25% cut in public sector pay, and the German Finance Minister Schauble – a Christian Democrat, mind – has endorsed the metalworkers’ 6% wage claim, precisely because it would rebalance demand.

In terms of taxation, even the Secretary-General of the OECD has come out in favour of more redistributive tax and benefit systems (along with better education and training and job creation) as a way to create growth through greater equality: a manifesto for social policy that would go further than most European governments at the moment. Despite continuing hostility from the UK – or more accurately from the City of London – the Robin Hood Tax is getting closer and closer to implementation, albeit without the UK benefiting from the resources that will be raised.

On equality, there is a broad consensus that more needs to be done, including the measures in the Queen’s Speech, although we would have preferred them to go further, and there is still a crying need to address child-care and the growing need for elder-care across the EU. Where we’re really not making progress is on income inequality: as the TUC’s new living standards tracker launched today shows, it is the poorest households who are bearing the brunt of price increases.

We do not, however, seem to have reached the end of the road for labour market flexibility – also a feature of the Queen’s Speech and still, as the EU’s employment strategy showed when it was launched a fortnight ago, still a part of the Commission’s thinking despite the absence of evidence that making it easier to sack people or weaken their job security generally does anything to create jobs.

On industrial relations, the Commission’s attempt to regulate through the Monti II proposals looks unlikely to be agreed, which to be honest is probably the right decision – Monti II wouldn’t have worked – but does still leave the imbalance between economic freedoms and fundamental human rights that European Court Judgments have created. If unions and employers are going to play a constructive role in getting Europe out of the crisis its economy is in, unions need to be able to play that role without one hand tied behind our backs.

But overall, I think this month’s election results suggest that the second narrative that I set out may be beginning to win more support.

We are expecting a large number of people who receive less housing benefit to be able to negotiate their rents downwards.

I’ve always been sceptical about this claim and the latest mortgage and landlord possession statistics from the Ministry of Justice suggest that this is a really bad time to rely on tenants’ ability to persuade landlords to cut their rents.

Mortgage posession actions came down after a peak in 2008 and have not risen again – the MoJ argues that “lower interest rates, a proactive approach from lenders in managing consumers in financial difficulties, and various interventions, such as introduction of the Mortgage Pre-Action Protocol” made a difference.

But landlord posession actions have been rising since early 2010:

We shouldn’t over-interpret these figures, but you’ve got to say that there’s no sign of landlords being reluctant to repossess when they think they need to. It does not look like a good time to rely on tenants’ strength to avert a catastrophe of social cleansing.

A variety of factors both domestic (such as the hike in VAT) and global (a rising oil price following the Arab Spring) pushed inflation higher in 2011, but as different households spend a  differing proportion of their income on different items, the impact of rising prices has been far from uniform.

This means that as the poorest 10% of households spent a much greater proportion of their income on items such as food and utility bills which were bigger drivers of inflation in 2011, they experienced  inflation rates well above the published headline level.

As the graph above makes clear, since June 2011 the poorest decile of earners have been the hardest hit. By contrast in 2010 it was the higher earners who were most affected by rising prices.

Whereas the poorest 10% of households spent 43% of their income on household utility bills and food, the richest 10% spent just 20%.

It was been widely reported that the UK is going through a squeeze on living standards of historical proportions – the worst since the 1920s according to Sir Mervyn King – but what is less appreciated is how this has affected different family types.

Real wages have been falling for two years and are not expected by the OBR to start growing again until mid 2013. The fact that prices are rising faster than earnings has cost the median worker an annual £727 in real terms since January 2010 – 3.4% of their wages. And that’s before we take account of things such as changes to tax credits.

The Chancellor might like to say ‘we’re all in this together’ but the data is saying something quite different.

We’ll be updating these series throughout the year as the data becomes available.

Methodology: the inflation series were worked by using the Family Resources Survey to see how households spend their income and then comparing the ten expenditure categories to the published breakdowns of CPI. All of the data is available here.

Civil society has been discussing for at least the last two years what should replace the UN Millennium Development Goals adopted in 2000 and due to be achieved by 2015. Everyone knows that, even though progress has been made, the global financial and economic crisis of the last few years put an end to hopes that the MDGs would be realised on schedule.

The MDGs were an ambitious attempt to give the world measurable goals for poverty reduction, and they include many measures that unions welcomed, such as education for all or combating HIV/AIDS. Unions have a development agenda, of course – we are a movement dedicated to poverty eradication, equality, and economic and social justice, and with members across the world, north and south, after all. Much of what we are committed to is shared by others in civil society and in many political parties that form Governments.

But we are focused in a very particular way on the key determinant of poverty – the world of work. So we would like to see some new targets that currently aren’t part of the MDGs (except obliquely: decent work is one of the indicators for MDG 1, on poverty itself). What about full employment, a commitment to which is required by ILO Convention 122? Or the ratification and implementation of the core ILO conventions against forced and child labour, discrimination at work, freedom of association and collective bargaining?

Even more fundamentally (I’ll come on to ends and means) what about setting targets for equality within nations using indicators like the OECD’s Gini coefficient, which could, among other things, radically redefine the recipients of overseas aid? There are more poor people in India than in the whole of sub-Saharan Africa but India is considered a richer country than most of those sub-Saharan countries, for example.

David Cameron has indicated that he wants whatever replaces the MDGs to focus more on the economy, so I’m half with him. But then he had to spoil it by suggesting that this meant property rights, entrepreneurialism and investment. These are only means to an end (and not necessarily the means I’d choose, either!) but they are not sensible objectives for a strategy aiming to make people healthier, wealthier, wiser and more free.

International development charities and the Shadow International Development Minister Ivan Lewis have tempered their criticisms, pending the delivery of the actual expenditure next year. But clearly, people in the sector are worried that the Government may renege on the deal. That would be a massive breach of faith, and it is difficult to imagine how the pious International Development Secretary Andrew Mitchell could resist calls for his resignation. He would certainly have to develop a teflon-coated hide to avoid career-ending shame.

It may well be that the pledge will survive the increasing – and partly self-inflicted - pressures on public expenditure. And even if it does reach the promised level of aid, the Government could do harm enough simply by spending that money badly (for instance, on indiscriminate subsidies to the private sector). Successive Congresses have supported the 0.7% target and legislation. But we also want overseas aid to be promoting people’s rights, economic and social justice, and trade unionism, not just providing what some cynically call “more and better biscuits”.

Unless the government manages to develop a compelling growth story to its Electricity Market Reforms, we can look forward to an Energy Bill under attack from the anti-wind farm brigades.

The key aim of the Green Investment Bank is to take on the riskier end of investing in new, low carbon technologies, some of it tried and tested in operational terms but not on the market. One aspect of risk is availability of capital. A large proportion of UK companies operating in the energy intensive industries like steel or chemicals are subsidiaries of global organisations. They compete internally for capital investment.  Higher costs and risks make it more difficult to justify internal group investment in the UK.

But the Green Investment Bank is seen as potential source of capital for energy efficiency projects among small and medium firms in other energy hungry sectors like ceramics. In the joint TUC-EIUG study, Technology innovation, the British Ceramic Confederation reported that the GIB “was potentially useful as a provider of capital for energy efficiency projects with proven technologies …The recession had run down cash in many companies compared with many European competitors (who were able to use temporary short time working compensation schemes). Many UK banks would also not lend to extend overdrafts even to expand production or help credit as firms pulled out of the recession – so the UK Government needed to recognise that conventional finance is often not available for this type of work.”

Potentially, the Green Investment Bank could drive renewable energy investments and industrial growth as potential source of capital for energy efficiency projects.

There is practically no detail on what proposals will be included, with one exception: section 439(5) of the Companies Act will be repealed, which effectively paves the way for a binding shareholder vote on future executive pay, one of the Government’s key proposals as set out in its recent consultation. Introducing a binding vote on future pay is a sensible step which the TUC supports. However, unless shareholders exert a much tougher approach to remuneration reports than they have done hitherto, there is a danger that in practice it will have very little impact.

This is why the Government’s other key proposal in its consultation – raising the threshold of support required for remuneration reports to 75% – is so important. Counting the two defeats so far this year, a total of 20 remuneration reports have been defeated at company AGMs since the advisory vote was introduced in 2003, out of literally thousands of votes that have taken place. Had the threshold been 75%, over 85 remuneration reports would have been defeated up to and including 2011 – still a low proportion of the total, but significantly higher than 20 (or 18 as it was at the end of 2011).

There has been much talk recently of a ‘shareholder spring’ (meaning increased levels of shareholder activism), fuelled in particular by the recent defeat of Aviva’s remuneration report at its AGM last Friday. It is great to see shareholders finally flex their muscles a bit on executive pay, but it is premature to read signs of a ‘shareholder spring’ from one AGM defeat.

There have been flurries of shareholder activity on executive pay in the past. Four companies had their remuneration reports defeated at their AGMs in 2005, yet this was followed in 2006 with just one defeat, and in 2007 and 2008 there were no defeats at all. The next peak came post financial-crisis in 2009, which saw the defeat of five remuneration reports; yet this was followed by three defeats in 2010 and three last year. The recent high levels of ‘no’ votes on remuneration and the defeat at Aviva, while welcome, may be more a case of shareholder burps than a shareholder spring.

Average votes against remuneration reports as a whole, while creeping upwards, remain extremely low, rising from 3.3% in 2006 to 6.0% last year. This modest increase covers a period of recession, characterised by poor company performance, low (in some cases negative) levels of shareholder returns and public outrage over executive pay. In this context, an average ‘no’ vote of 6% does not look like the spark needed to set the executive pay bonfires burning.

Several commentators have interpreted Aviva’s remuneration report defeat as a vote of no confidence in its Chief Executive Andrew Moss. Yet, shareholders supported Andrew Moss’s re-election by a margin of over 5:1. Confused? Apparently, the explanation for this seeming contradiction is that shareholders are reluctant to vote against a director (in this case the Chief Executive) because these votes are binding, so they would rather use the currently non-binding remuneration report vote as a means to send a signal of disapproval of the Chief Executive.

This contorted logic is as surreal as it is ridiculous and raises serious questions about whether investors are on the right page when it comes to using their voting rights. It raises particular questions about how the introduction of a binding vote will affect voting behaviour. If this is the logic that informs the way shareholders use their current voting rights at companies, is strengthening their voting rights really the best way to curb excessive executive pay?

Even those proposals that go in the right direction have too often been watered down so we have a green investment bank that is not a real bank and executive pay curbs that lack teeth.

What is worst is that ministers are wrapping up a real attack on rights at work as good for growth and employment. Those who opposed the minimum wage and rights for paid holidays are using the recession as a cover to introduce policies that they know have little support and that will be seen as nasty by most. There is no actual evidence that making work insecure does anything for the economy – easy fire will not lead to new hires.

This is no more than a bad boss’s charter that will make people insecure at work and will feed straight into lower consumer confidence.

Even where legal protections remain, the government is to undermine them by reducing inspections or making it far more difficult to take tribunal cases – which have been falling over the past year, contrary to claims from some business organisations.

The UK already has the second lowest level of worker protection among the 36 rich countries in the OECD, and the government has made it possible for employers to sack staff for no reason for up to two years from when they start. The government’s own surveys show that excess regulation is cited by only six per cent of small and medium sized businesses as a big barrier to growth. Their real problems are the depressed economy and difficulties with bank lending. 

This agenda is likely to be controversial within government. The lack of evidence that it will help the economy shows that this is driven by the hard-right agenda set out in the secret report by Wonga owner and Tory donor Adrian Beecroft. Those who opposed the minimum wage are using the economic crisis as an excuse to roll back modest employee protection.

In particular we will oppose lump-sum benefits in lieu of maternity pay and cuts to maternity rights that will particularly hit poorer mothers. ‘Protected conversations’ in which employers are free from legal constraints are deeply unfair to employees and likely to be unworkable in practice. Removing rights from staff in small businesses will turn them into second class citizens at work, and make it harder for smaller firms to recruit good staff.

Of course any modest increase in rights to request flexible working is welcome, but this should not obscure the fact that this government is taking the workplace backwards