Download Uni Global Union Speech

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Uni Europa and World P&M Conference
15th April 2013
Speakers Notes
Colleagues,
Introduction
Thank you very much for inviting me to speak to this
conference today.
It has been a historic week in the UK. Exactly one
week ago, we had just learned of the death of a
former British Prime Minister, Margaret Thatcher. Mrs
Thatcher was the UK’s first and, so far, only woman
Prime Minister. She was our longest service peacetime
Prime Minister. In the UK, the Miners Strike, the
Falklands War, the Brighton bomb that nearly killed
her and Mrs Thatcher’s increasingly hostile approach
to Europe have become very firmly established in the
nation’s consciousness.
Internationally, Mrs Thatcher earned the nickname
‘The Iron Lady’. She infuriated the African National
Congress by opposing sanctions against apartheid
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South Africa, while declaring the new Soviet Leader,
Mikhail Gorbachev was a man with whom she could “do
business”.
But it was her chemistry with the US President,
Ronald Reagan, that stands out. In particular,
Margaret Thatcher and Ronald Reagan kicked off the
neo-liberal economic revolution, which minimised the
role of the state and maximised the role of the
market.
Until then, in the UK there had been a consensus that
the state had a role to play in supporting employment
and underpinning industry. Keynesianism, and the
concept of counter-cyclical demand management in
particular, had been accepted across the political
divide. Margaret Thatcher tore up the books. And her
hostility to trade unions is well-known.
What is more, after she left office, her philosophy
was not seriously challenged. The New Labour
Government of Tony Blair supported the idea of
minimum standards at work. A National Minimum Wage
was introduced and new rights to belong to a trade
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union, and to have that union recognised for
bargaining purposes, came into law. These were
important reforms.
But the voice of business remained the primary voice.
There was scepticism about the role of government in
economic affairs. The need for a balance to the power
of business was downplayed. When the TUC published a
report calling for industrial policy in 2005, it fell
on deaf ears.
So what has changed? Most obviously, in September
2008, Lehman Brothers filed for bankruptcy. This was
the biggest bankruptcy in US history and the most
visible symbol of an economic downturn that has
lasted longer than the Great Depression and that, as
we meet today, is far from over.
The UK has experienced a double-dip recession and may
yet experience a triple-dip. The situation in the
eurozone is precarious on so many levels.
This means that politicians, economists and many
others have been considering not just how to get back
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on a path of sustainable economic growth, but how to
develop an economic model fit for the future.
What should that economy look like? What tools do we
need to provide steady growth and good, well-paid
jobs in the years to come? I will try to share a few
thoughts on these questions in my remarks today.
Good Work
I think the biggest long-term challenge that we face
is this: how do we create economic growth in such a
way that it promotes quality jobs for those young
people who do not go to university?
In the 1960s and 1970s, the heyday of British
manufacturing, industries such as automotive and
aerospace provided millions of jobs for working class
people. Many of those jobs were skilled jobs. What is
more, they were jobs that paid proper wages. Those
working for manufacturing companies may never have
got rich, but they earned enough to feed and clothe
themselves, provide for their families and enjoy
dignity at work.
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Since the decline of manufacturing, the UK has
developed an hourglass economy. Well educated
professionals can often earn very good wages, while
many jobs for non-graduates pay such low wages that
those doing them rely on government support to top up
their pay.
So how do we create jobs for what sociologists call
the skilled working class? I’ll come back to that
question shortly, but in the meantime, let us agree
that the government has a responsibility to ensure
that it happens. It is not the government’s role to
directly supply the jobs, although the public sector
has an important role to play in a modern economy.
But an economy that provides good jobs has to be a
political priority and if the market does not provide
them by itself, government must do more than simply
shrug its shoulders.
Industrial Strategy
The TUC strongly believes that the UK needs a modern,
intelligent industrial strategy. There will be no
return to the UK’s golden age of being the workshop
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of the world. Trade unions are not naïve about
economic change; even if the UK achieves an
industrial renaissance, that will not create jobs in
the numbers that manufacturing provided in years
past.
But we need an industrial strategy because we need a
rebalanced economy. We have seen the dangers of an
economy over-reliant on one sector, the financial
services sector. Instead, the UK needs to think about
those industries where it can compete in the age of
globalisation for the next 10, 20,30 years. Some of
those industries, such as automotive, aerospace and
pharmaceuticals, already exist. Others, such as
environmental technology, need government support
until they are viable. This is exactly what Germany
and the Scandinavian countries have done. It is what
the UK must now do.
How do we identify the sectors which should be
prioritised? I suggest this approach. First, we think
about what we are good at. What industries are we
good at? What skills do we have that would enable us
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to shine in other industries, perhaps industries such
as nanotechnology, that are not yet mature, but will
be huge in the years and decades to come?
Second, we need to consider what will be the major
needs, wants and challenges of our world in the
coming decades. Then we should match the two lists.
Mega Trends
Last year, the TUC published a report called ‘German
Lessons’. As the title suggests, this report sought
to learn lessons for UK industry from Europe’s
powerhouse economy, Germany. One company we spoke to
for ‘German Lessons’ was Siemens. Siemens is, of
course, a transport and communications company. A
central concept of Siemens is the idea of megatrends.
Siemens knows exactly what it is good at and what
industries it should be able to break into. But
Siemens is also interested in world trends. A member
of the Siemens works council told us: “What will
London look like in 2020 or 2025? What are the major
things that need to change in a city like that? For
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Siemens, that is a kind of headline, a possibility to
develop business.”
Free market politicians have argued against trying to
identify future industrial and economic trends which,
they say, cannot be done. Yet this is exactly what
Siemens does. The oil industry is another that takes
very long term planning seriously. If industry can do
it, why cannot government do it, if there is the
political will?
So identifying the key industries of the future is a
central part of industrial strategy. What else should
industrial strategy cover?
In our ‘German Lessons’ report, the TUC called for a
new industrial eco-system. What we meant by this was
that various policies need to knit together, rather
than standing side by side as piecemeal, unrelated
activities. So if the UK wishes to focus on certain
world leading industries of the future, how will
skills policy respond to that? Can procurement policy
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support it? Can the best brains of universities be
harnessed for the cause?
A role for trade unions
And, of course, what is the role of trade unions?
Germany has a social market economy, which is highly
prized among the population. Of course that country
has its problems and challenges, but the levels of
division and inequality experienced by Anglo Saxon
countries under the neo-liberal model have been
avoided under the model of so-called Rhineland
Capitalism.
But the Social Market Model implies strong unions and
strong employers’ associations. In the German system,
employee representatives, who are usually trade union
members, have seats on Works Councils and Supervisory
Boards. Under this system, known as ‘codetermination’, they often have the power to block
change, but they recognise that if they simply say
no, this will ultimately result in the company losing
competitiveness.
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The Social Market Economy and co-determination are
distinctly Germanic concepts and we must be wary of
trying to import models into countries with different
histories and cultures. Yet I do not accept that
British people are inherently unfair, greedy or
selfish. A model, built on UK history, that promotes
greater equality and mutuality, with a greater voice
for workers as well as businesses, is another
important aspect of industrial strategy.
The need for care
Finally, I mentioned Siemens and industrial megatrends, but we must consider other social, economic
and demographic trends as well. In particular, the
ageing population and the need for more and longer
social care is an obvious trend that we can all
predict.
I said earlier that I would discuss good jobs for the
skilled working class. Automation and technology
means that a manufacturing renaissance could increase
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these jobs, but there would still be a large
shortfall between the jobs created and those needing
them.
There is no single place that other workers should
go, but investing in care a good way to provide high
quality jobs in the future, meeting social needs as
well as creating employment and wealth. The coming
decades will see a need for a massive expansion in
care work for the elderly. This must be accompanied
by a major improvement in the terms and conditions of
care workers. At present, care is poorly paid and
undervalued. This must change.
This leaves the obvious question of how this care can
be paid for. There is no obvious answer, but we will
need to consume less over time and the richest will
need to consume much less. A fairer society, in which
wealth is shared more equally, will help us to meet
this need.
Conclusion
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In conclusion, the economic downturns should spell
the end of neo-liberal economics. If we wish to build
a thriving, prosperous, sustainable economy, we need
a commitment to full employment and a modern
industrial strategy. We also need a better balance
between the needs of business and those of other
stakeholders.
Trade unions have traditionally been strong in the
manufacturing sector and when we speak of industrial
strategy, we often focus on manufacturing. The UK
needs a rebalanced economy, with modern manufacturing
at its heart, but industrial strategy must reach
wider, into the service sector, as well. Among the
most important service sectors is that of personal
care, a sector which will grow in importance in the
decades before us. We must rise to that challenge,
providing high quality jobs through care, and giving
dignity in old age in the process.
Thanks for listening.
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