TUC calls for a worker-friendly new year

TUC new year message

In his new year message to trade union members published today (Tuesday), TUC General Secretary Brendan Barber said:

‘2009 has to mark a decisive turning point, away from the neo-liberal market-always-knows-best conventional wisdom that brought our economy to the brink of a catastrophic collapse, towards a fairer, more balanced economy delivering sustainable prosperity.

‘This is going to be a grim year. Unemployment will increase every month. Some predict it will hit three million, but in truth no-one knows.

‘First because we have little experience of a recession driven by a financial collapse, and secondly because we do not know how bold our Government – and as importantly, other governments meeting together as the G20 in April in London – will be.

‘Government therefore has three priorities in the year ahead:

* it must take every action necessary to make the recession as short and as shallow as possible;
* it must develop the proper policy response to mass unemployment;
* it must use these and other policies not just to ensure that we do not repeat the mistakes that led to the financial collapse, but also to ensure that we emerge from recession as a fairer, greener and more sustainable economy.

Action to tackle the recession

‘The Government must be prepared to take further bold action to counter the recession and to save jobs.

‘The roots of this recession lie in the failure of the finance and banking sectors, and while the Government deserves praise for setting the international pace on the bail-out of banks, we do not yet have a banking system that is truly serving the interests of business or household borrowers. Banks are putting building up their own balance sheets and paying back government loans as their top priorities. But they also still hold high levels of ‘toxic’ debts which prevent them from dealing with other banks in a normal way. The Government and the Bank of England must therefore consider injecting even more support into the financial system to get credit flowing again.

‘The Government cannot be expected to come to the aid of every company that faces difficulties but it must be prepared to look at providing short term assistance to strategic companies in sectors vital to the future of Britain.

‘The Government should consider a further stimulus package in the Budget. Barack Obama’s team are already talking of a big package to boost the US economy. The UK should follow suit – and also use the April G20 summit in London to create a coalition of the willing to wage war on unemployment, poverty and recession.

‘As well as bringing forward planned infrastructure projects, ministers should be fast tracking new projects to ensure that further work can start when these finish. The UK is still suffering from a lack of investment in the key infrastructure a modern low-carbon economy requires.

Action to help the unemployed

‘Too much government policy towards the unemployed still tends to be trapped in the idea that there are enough jobs to go round, and that the unemployed either lack the skills or the motivation to get work. While of course with rights come responsibilities, the thousands of people losing their jobs every week throughout 2009 should not be treated as potential scroungers but victims of economic forces well beyond their control. They will need help through benefits and support through training and job search.

‘Despite its tough presentation and some objectionable policies such as workfare, there were some good proposals in the welfare reform Green Paper to make Job Centre Plus services better tailored to individual needs. Mass unemployment will make it even harder for those who normally find it more difficult to get work such as disabled people and those juggling child care and work. There needs to be specific help for such groups – such as an increase in child care, which in turn creates jobs.

‘The TUC has already called for better benefits, higher statutory redundancy pay and a bigger tax allowance for redundancy pay to provide more help for the newly unemployed. We now look for action in the Budget on these issues.

Action to create a fairer, greener and more sustainable economy

‘2009 is going to be tough, but it can still be made positive if it becomes a turning point – the year in which we set out to build a deliberately different kind of economy.

‘That first means recognising the mistakes of the past – made not just by this Government, but by governments and the economic and political establishment almost everywhere.

‘We have given far too much weight to the interests of the finance sector, and began to believe it could create wealth simply by moving it around, rather than through long-term investment in the goods and services that people want and need.

‘The challenges we face are clear. Even before the recession we were scarred by poverty, particularly child poverty. Our society was coming under increasing strain from growing inequality as a new class of the super-rich escaped their responsibilities to pay a fair share of tax. We had neglected important sectors of the economy as we gave preference to financial services. We have failed to do enough to meet the environmental imperative.

‘This challenges us all to put the measures we will need to beat the recession to a longer term purpose of building a better greener and fairer economy that can emerge the other side of the downturn.

‘This will require:

* a new kind of industrial strategy – not a return to picking winners and easy hand-outs, but strategic support to the sectors where we are already strong but could do better. Some will be in manufacturing, but others will be in services and parts of the economy often neglected in such discussions such as the creative sectors.
* A green industrial revolution that recognises that many industries will have to adapt to survive, but that also that the environmental challenge can generate thousands of productive worthwhile jobs, and build on the strength of our science base.
* An intensification of efforts to make society fairer – the recession should encourage the government to speed up efforts to eliminate child poverty.
* A fairer tax system. The government is right to increase borrowing to maintain the strength of the economy. But this borrowing and decent public services will have to be paid for, and 2009 must see a real debate on how to make the tax system fairer. There is a real demand for the super-rich to pay a fairer share. President Elect Obama has been a long-time supporter of a crack down on the tax havens used by multi-nationals and the mobile super-rich to avoid tax.
* A new kind of banking system that no longer threatens international economic stability and instead serves the rest of the economy and society. Britain’s banks already look very different. Some are now state-owned, some have large public stakes and all have received substantial help from the Bank of England and the taxpayer. At the very least we will need new regulatory structures to enforce stability but also to protect the consumer in a sector with less competition.

‘2009 will not be easy year, but it could be the turning point that will make 2010 not just the start of recovery, but the first steps in building a new economy.’

Too little, too late: demutualisation a mistake, admits Tory spokesman

Whatever next? They’ll admit privatisation of the utilities has landed us with multinationals holding us to ransome?

Interesting comments from New Labour minister Hazel Blears, too:

Demutualisation was a mistake, says shadow Treasury minister
December 29 2008

Building society demutualisations had been wrong, a Conservative Treasury spokesman admitted at the first ever Mutuals Forum.

“We can see with hindsight what a mistake they were,” said Mark Hoban, the shadow Treasury minister. “Those institutions were too small as listed entities to survive.” However, Hoban resisted a suggestion from conference delegate Vivian Woodell — Chief Executive of the Phone Co-op and representing Midcounties Co-op at the London event — that the Government should now ‘re-mutualise’ Northern Rock. “I can see the attraction of it,” responded Hoban, “but I am not sure that you can do that now.”

Adrian Bailey, a Labour/Co-op MP speaking alongside Hoban at the conference plenary, reported that he and other MPs had unsuccessfully tabled an amendment to the Banking Bill currently going through Parliament that would enable Northern Rock to be remutualised. “There has to be a balance between the [Government’s] responsibility to taxpayers and the benefits of mutuality,” said Bailey.

The Forum’s keynote speaker was communities secretary Hazel Blears, who told delegates she was a long-time and committed supporter of co-operatives, other mutuals and community organisations.

“I think we need to do more [as a government] than just have a level playing field [between mutuals and PLCs] and see where mutuals can offer us an opportunity to do things,” Ms Blears said.

She added that mutual organisations were already doing the kinds of things “we are trying to do in communities across the country”. Blears explained that she believes that mutuals “are better placed” to weather the recession than are PLCs. “There is a new hankering for solidarity and a new interest in people taking control of their own affairs,” she suggested.

Ms Blears made a promise to delegates on behalf of the Government that further legal reforms would be introduced to enable co-operatives and other mutuals to run their businesses more effectively, including reforms of the need for paper-based communication.

New legislation will be proposed to allow mutuals to make greater use of electronic communication. Other intended measures include helping mutuals to bid to act as agents for the Government in its welfare reform and other programmes. Ms Blears said there was more of a mood to support co-ops and mutuals following the collapse of the banking system.

In return, Ms Blears said, the mutual and co-operative movement should do more to explain to the public how big, how important and how useful the sector is. Ms Blears added that the first ever Mutuals Yearbook was an important step forward in achieving this. The Yearbook — which was launched at the Forum — contains statistical information and key facts about the largest parts of the mutual movement.

The Forum heard from executives of the Building Societies Association, the Association of Mutual Insurers, the Association of Friendly Societies and the Employee Ownership Association, who each explained how large their sectors were.

The 58 remaining building societies have nearly 52,000 staff, 23 million members and £380bn in assets. Mutual insurers in the UK control £83bn in assets and have 15 million policyholders. And employee-co-owned businesses — not including workers’ co-operatives — have an annual turnover of £25bn.

Closing the Forum, David Anderson, Chief Executive of Co-operative Financial Services and Chair of the Mutuo think-tank, which organised the event, told delegates that they should expand the size of the sector by increasing inter-trade at the expense of existing contracts with PLCs. “Let’s get out of our silos and start doing business with each other,” he urged, to enthusiastic support from delegates.

The event attracted 200 delegates from the co-operative, building society, mutual insurance, co-operative trust schools and foundation trust sectors.