I’m taking over as the new TUC General Secretary this week, as many people return to work after the New Year. And 2013 is already looking to be a critical time for our movement and the UK as a whole.
The economy is stuck in the middle of what at best looks like a lost decade. Jobs continue to go across the public sector – including in services like health that we were told would be protected. And while we should be pleased that unemployment hasn’t been as bad as many feared, it’s still far too high, especially for young people.
Unemployment looks set to rise again in the year ahead, and the hidden problem of under-employment is growing too – Many people in part-time jobs want to work full-time, and many more are working in jobs that don’t use their skills and education to the full.
Even for those in work, living standards are stagnating as wages fail to keep pace with prices. Family budgets are under real pressure, particularly when you look at what those on middle and low incomes actually spend their salaries on, such as food, childcare and transport.
In short our economy is sick, and the government’s medicine isn’t working. We were told that short-term pain would deliver long-term gain, yet all we see are nasty side-effects with no sign of a cure.
What is worse is that we now seem to be locked into a vicious downward spiral of cuts. And as they don’t work, the government cuts even more. That is why I’m starting the new year with a focus on the benefits up-rating cap – a measure that will do nothing to target the tiny number who play the system but will hurt millions of low-paid workers who rely on benefits to top up their poorly-paid jobs, and millions more without a job who are desperately trying to find one.
Reducing the living standards of some of the poorest and most vulnerable in society, while attempting to tar them all as scroungers, is perhaps the very definition of a party determined to be seen as nasty. And, what is more, it will further depress demand and slow the economy. People on the breadline spend every penny of their income, and mainly spend it in the local economy – while those who will benefit from the cut in the 50p tax rate coming this year are as likely to save it or take it off-shore.
The government is failing to offer people a vision for the economy or hope for the future. What the great bank crash brought home is that we do not have an economy that works for ordinary families. Even before the recession, living standards were stagnating for the majority and the resulting unsustainable growth of credit-fuelled consumption was one key cause of the crash. There has been a long-term decline in quality, skilled, well-paid jobs that should make up the back-bone of the labour force, as the short-term interests of banking and finance dominated the economy over the last few decades.
This is why I, with the TUC, will be campaigning for three priorities in the year ahead.
First we need the government to change course and abandon the austerity that is doing more harm than good. That means stopping self-defeating spending cuts, and instead putting investment in jobs and growth first.
Second we need a long-term vision of how we can make an economy that works for the many. That means leadership from the very top of government to drive a new industrial policy, including investment in the country’s infrastructure, affordable homes and transport.
We also need a laser-like focus on the need to create decent jobs and apprenticeships, in the parts of the country that need them the most. Lord Heseltine’s recent report offers a good start, and it won widespread support across political parties, business and unions. It may not go as far as we would like, but even a few steps along its route would be a distinctive break with the dominant approach since the 1980s.
Rebuilding Britain will take time but we need to start now. Simply trying to go back to business as usual is a limp ambition that fails to address the causes of the crash and offers little to all those excluded from the proceeds of growth. We need rapid progress on reform of banking and the creation of a modern industrial bank to invest for the long term. It also means facing up to the immediate challenge of climate change and the investment that requires.
And third, we need to build a fair society – one where we really are all in it together. It’s no coincidence that the economic model that we have followed since the 1980s led to a huge increase in the gap between the super-rich and the rest of us. Recession has only made this worse.
Some say that we can’t make social progress at a time of economic difficulty. But we set up the welfare state and the NHS amid the economic ruins of war. We need to tackle the root causes of growing inequality. This is why I want to see a major push for many more people to be paid the living wage in the year ahead, and why I want to see the benefits up-rating cap defeated. But fairness is also about those who can afford to paying their fair share, which is why the battle to stop tax avoidance and evasion will be another priority in the year ahead.
A fair society is also one where people have a real say in the decisions that affect their working lives and their families’ security. Short-termism driven by runaway greed proved to be unsustainable and we can no longer entrust the best long-term interests of a company to shareholders alone. So I want to help begin a public debate about what might be called economic democracy or ‘worker voice’.
Giving workers a say over top pay through employee representation on company remuneration committees is one example. But it is also about making all workplaces more like the best performing ones and genuinely giving staff a strong voice in the strategic decisions on which the future success of a company, and our economy, depend. Stronger trades unions must be a vital part of creating a better Britain, helping to re-balance power back towards ordinary people.
This all adds up a very different approach to the economy and a challenge to all the political parties, employers and indeed unions. My strong belief is that when we look back at the period from the 1980s to the 2008 crash, historians will see these as exceptional times – as damaging in their way as the 1930s.
What will dismay them most is how slowly we are building a new economic model to replace the one that fell with Lehman Brothers. There is surprisingly broad consensus that we need real change. What we need now is the determination to deliver it. I – and Britain’s unions – stand ready to play our part.