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It’s not every day a Tory chancellor gives a press conference in which he stresses (four times by my reckoning) that he is keen to meet with trade unions as a matter of urgency in order to devise a plan to protect jobs and wages. And when he is flanked by a prime minister who hitherto has hardly seen fit to give trade unions the time of day, the spectacle is stranger still. These, though, are not ordinary times.
The acute hardship facing millions upon whose labour our nation depends must be seen as high a priority as shielding the vulnerable from the coronavirus itself. The unions must get stuck in to the discussions — and fast.
The context of these talks will be unique to all the main players. Union leaders will know that their leverage is limited — plainly none of them will be threatening industrial action if they don’t get their way — so there will no place for idle threats. Constructive dialogue and persuasive argument must be the way.
Meanwhile, the Government’s decision to provide much of its multi-billion pounds rescue package in the form of loans means that many business owners, unwilling to saddle themselves with future debt, may simply decide to battle on against the odds. The risk of mass business failures and interruptions, therefore, remains high.
So the unions must, as a first concern, seek an agreement that the Government underwrite the wages of any employee who is either laid off or unable to work through having contracted the virus (or has self-isolated). The same must be sought for anyone who, as a consequence of school closures, finds themselves in the unavoidable position of having to take leave from work to look after children. Ensuring that workers are not compelled to choose between wages, health and childcare must be paramount.
In Austria, Norway and Denmark, tripartite negotiations between government, unions and employers have resulted in agreements on substantial wage support for workers in financial difficulty as a consequence of the virus. There is no reason why the UK should not seek to emulate any appropriate elements, even though these countries’ employment and social security arrangements will be different.
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SubscribeExcellent article. In 2008 the government (i.e. taxpayers) righty did what was necessary to shore up the banks and financial system. Now the government is supporting businesses to remain afloat, but that is not sufficient. Business has to also play its part. To protect people (taxpayers) the government should make it a condition that any business that gets government support must commit not to make any staff redundant during the crisis period.
I myself am a retired trade union official. While I agree with Paul Embery concering dialogue with trade unions and Government, i am unsure whether UK trade unions are mature enough to accept real social responsibilty in light of the current pandemic. My own experience is that of trade union leaders, general secretaries in particular, being simple one track minded in pursuit of simple goals such as money and holidays. To quote what trade unions in Scandanavia may agree to with their respective Governments is misleading where the UK is concerned. Uk trade unions cannot achieve that kind of dialogue even if they wished to (which they dont). It is a shame our trade unions are not mature enough because in times like these we need them to be.
This is a time when for great social change & the unions have an unprecedented opportunity & duty to provide solutions not only for their members but society at large. In this context perhaps it wouldn’t be remiss to provide food parcels. Whilst at the same time, someone like Richard Branson should pay his employees to stay at home. Instead of using politics as a means of refusing to participate in the decision making, unions need to be politically neutral & look to see how new skills could replace new ones or revive old skills that will not only help communities be self-sufficient, but keep them together. Instead of resisting change look to see how they can be a part of the changes. Both the Unions & big businesses need to think more about what’s best for the economy in the long term rather than in the short term. This is a global crisis in which we all have a part to play that could & will throw up some interesting results, as to how our world could change for the better.
Good points Paul.
Your comment: “as the country exits the health crisis, measures ” which may include so-called helicopter money, tax cuts or increased benefit payments ” to compensate for the inevitable (and potentially chronic) lack of demand”
The recovery phase is a real unknown and not just on the health front.
Perhaps waves of re-infection and rolling smack-downs leading to mass business failings and a breakdown of the structure of the real economy. With our complex supply networks perhaps a supply shock rather than lack of demand will be more of a problem
Paul Embery is a fine commentator but he should think twice about recommending helicopter money to increase demand in the UK economy. The former deputy governor of the Bank of Canada, Jean Boivin, is an advocate of helicopter money in the case of a recession, i.e. now, and since Governor Poloz is stepping down as Governor in June, there is a chance he may actually get a chance to implement his helicopter money policies as the BoC’s next governor. Although there is no obvious reason why helicopter money needs to be accompanied by a switch to price level targeting (it has sometimes been suggested for the Bank of Japan as a way it could finally meet its 2% inflation target), Boivin has recommended that this switch occur, which, given that inflation is likely to be below target through much of the recession, means a higher implicit target rate when the price level targeting regime is applied. Fergus Cumming of the Bank of England has argued (“Helicopter money: setting the tale straight”) that although there are different approaches to making a helicopter money drop work, in general the central bank will lose the ability to act against future inflation.
Paul you are my sort of Labour man. I follow you and like your style. Whilst I agree with your strategy to extend the mortgage holiday initiative to include other expenses for working people such as council tax, energy and water bills. My concern is with your suggested blanket inclusion of rent without allowance for landlords. This is short sighted. The majority of landlords are small working investors that have saved their entire life for an investment property. To bankrupt them to protect the people renting from them is very short sighted. There must be a greater overaching strategy to relieve financial pressure firstly on the landlord’s costs that are compelled to flow on to rental relief. i.e. Mortage interest and payment freeze, capital gains tax exemption 2 years, utility forgiveness and repairs/maintenance write off of 300% to £15,000. The rider to access this from the exchequer is proof of rent forgiveness for the period of the Corona Virus. What do you think?