First I want to thank the Greater Manchester Association of Trades Councils, and Manchester TUC, for organising this meeting. We need many more such events in the run-up to the TUC’s demonstration against austerity on October 20.
The failure of the Coalition government’s economic policy is obvious to all, except perhaps to the Coalition.
Cameron has said there will be no change in the government’s course. Making a virtue out of consistency is presumably easier than admitting failure.
Yet by the government’s own measures, it is not difficult to demonstrate their failure.
If you recall, austerity was going to be good for us because it would:
- return the economy to growth
- lead to a ‘March of the Manufacturers’
- increase private investment to cover public sector cuts
- reduce the public sector spending deficit
But in all of these measures the government has failed:
- Far from growing the economy, it has gone back into recession – down 0.6% since the Spending Review
- Manufacturers aren’t marching – they are stagnating along with the rest of the economy
- Far from a boost to private investment, we see a strike by private investors
- Far from a shrinking public deficit, it is growing – £9 billion higher, so far this financial year compared to last year.
The major disaster is the economy, but the failure of the government to change course is disastrous too.
There are some things which we can take immediate heart from. The collapse of the deal between the Coalition partners on the issues of constituency reform and House of Lords reform is encouraging. It now seems very likely that the Government will not to last until 2015.
It is also most likely – at least the bookies agree – that the next government will be a Labour government.
One of the things that Ed Balls said at the TUC last week, I very much agree with..
He said: “The fact is you and your members cannot just sit back and wait for a Labour government.”
I’m pleased to say that Congress took this to heart. In an important composite motion moved by UNISON, Congress adopted an eight point action plan.
The headline point is probably one that directs the General Council to: “co-ordinate unions which take strike action to challenge austerity policies that are loading the costs of the crisis onto workers in both the public and private sectors, while government cuts taxes for the rich.”
What is interesting is the intention to co-ordinate action between workers in the private and public sectors. This is very necessary, although it will be very difficult given the precise negotiating arrangements across sectors.
I think the most certain development is that you see co-ordinated action on public sector pay. There is an appetite of this, and no obvious obstacles to achieving it.
This can be a tremendous encouragement to all workers, and we should try and ensure public sector workers are supported in this move.
One new policy that was floated at the TUC was the proposal from Len McCluskey for an immediate one pound an hour increase in the minimum wage. I think this is an excellent idea.
It is very evident that tax cuts to the rich simply result in the rich accumulating more. If however you give money to workers and poor people they spend it.
So lifting the minimum wage is a direct stimulus to the general economy.
This process is also understood by the Labour leadership. Ed Balls’s proposal to reduce VAT assumes that this reduction in tax from consumers will be spent by them on other commodities.
VAT is a tax which bears disproportionately upon lower income families.
A real stimulus to the economy must be based on a mix of major investments to the infrastructure and services – alongside immediate improvements in wages and benefits to raise consumer spending.
Simply waiting for private investors to invest is a recipe for further stagnation. At the moment private firms are holding around £750 billion in bank accounts.
They are waiting for wages and benefits to plummet further. The bosses believe that this is the only way to get a risk free and healthy profit. It is a strike by investors.
If we reject such an approach, then we have to demand government action on investment. The TUC made a good start on this too.
Congress agreed that the banks already in government ownership – particularly RBS – should be directed by government towards supporting growth, by increasing lending to promote investment.
Congress also went so far as to call for the nationalisation of the entire financial sector.
Certainly a publicly owned banking service would allow real investment in the future of our country – offering an end to the scourges of unemployment, housing shortage and the decline in public services.
So given this boost from the TUC, it is important that we go all out to make a success of the 20th.
The CWU is alerting all of its members to this important event. We will call upon all our activists do something towards building the demonstration.
At the same time will be considering our options for co-ordinated action with other unions. We organise workers in both the public sector – especially Royal Mail – and in the private sector in telecoms and financial service companies.
I think many people are shocked by how severe the attack upon living standards have been. Yet only a fifth of the proposed austerity cuts have been made so far.
We have to prevent our communities becoming demoralised by the difficulties they face. Trade unions can connect with communities and present a united front against the Coalition’s attacks.
We must make every effort to build the October 20th action. And we must prepare for action after that day. Together we will win.
Thanks for listening.