Tag Archives: economy

Austerity is a nonsense, and a dangerous one at that

28 May

Mark Blyth, Professor of International Political Economy at Brown University, explains why austerity is not the answer to our economic woes.

A fairer vision for the UK: the challenge for the labour movement

29 Jan
by Frances O’Grady, General Secretary of the TUC

The year has started with an economic outlook as bleak as the weather. We’re stuck in the middle of what at best looks like becoming a lost decade. Jobs are being slashed across the public sector – including in services like health that we were told would be protected. And while we should be pleased unemployment hasn’t been as bad as feared, it’s still far too high, especially for young people.

The hidden problem of under-employment is growing too. Many people in part-time jobs want to work full-time, and many more workers aren’t able to use their skills and education to the full.

To make matters worse, living standards are stagnating as wages fail to keep pace with prices. Family budgets are under real pressure, particularly when you look at the soaring cost of what those on middle and low incomes actually spend their salaries on – food, childcare and transport.

The government is failing to offer a vision for the 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 a key cause of the crash. There has been a long-term decline in quality, skilled, and well-paid jobs that should make up the back-bone of the labour force, as the short-term interests of banking and finance have continued to dominate the economy over the last few decades.

The labour movement has a huge challenge to make the case for a better vision, and this is going to shape my campaigning priorities over the coming months.

First we need the government to change course and abandon the austerity that is doing more harm than good. That means stopping these self-defeating spending cuts, instead putting investment in jobs and growth first.

Second we need a long-term vision of how we can build an economy that works for the many. That means leadership from the very top to drive a new industrial policy, including investment in the country’s skills and infrastructure, including affordable homes and transport. The changes we’ll need to make to respond to the challenge of climate change could be a key part of this. Banking reform needs to be stepped up too, and an effective industrial bank is needed to help us invest for the long-term.

And third, we need to build a fairer society – one where we really are all in it together. It’s no coincidence that the economic model that we’ve followed since the 1980s has led to a huge increase in the gap between the super-rich and the rest of us. Recession has only made this worse. We need to do a lot more 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 a clampdown on the tax evasion and excessive tax avoidance endemic amongst corporations and the richest in society. We also need to begin a public debate about economic democracy, making the case that 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. Giving workers a say over top pay through employee representation on company remuneration committees is one example. But it’s also about making all workplaces more like the best performing ones and genuinely giving staff a voice in the strategic decisions on which the future success of a company depend.

Stronger unions too must be a vital part of creating a better Britain, helping to tilt the balance of power back towards ordinary people.

I believe that when we look back at the period of deregulation and inequality from the 1980s to the 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.

This all adds up to a very different approach to the economy and it poses a challenge to all the political parties, employers and indeed unions. There is surprisingly broad consensus that we need real change. What we need now is the determination to deliver it.


Frances O'Grady


Frances O’Grady is the first female General Secretary of the TUC, which represents around 6.5 million trade union members.

HSBC to cut 2,000 jobs after double-dip recession announced

26 Apr

by Amy Jackson


Yesterday brought the all-too-predictable news that Britain’s economy has shrunk for the second quarter in a row, and so entered a double-dip recession. With a failing economy, fresh allegations from the Leveson inquiry and a minister on the brink of resignation, Cameron endured one of his roughest PMQs to date. Ed Miliband capitalised on the government’s woes, demanding that Cameron did not offer another ‘excuse’ for the Coalition-imposed economic woes. With his usual stock response about who ‘got us in to this mess’, Cameron added, ‘We have got to rebalance our economy, we need a bigger private sector.’  But unfortunately for Cameron, the private sector is failing to come up with the goods. Unemployment still stands at 2.65 million, and news continues to flow of business more keen to cut staff than hire them.

The most recent set of redundancies have come from HSBC, the UK’s most profitable bank, who announced yesterday that they are to cut 2,000 jobs from mostly middle and senior management roles. HSBC clearly means business. They currently employ 50,000 people in Britain, and with these redundancies they are slashing 4% of its workforce. HSBC does not plan to stop here. Stuart Gulliver, CEO of HSBC, has made it clear he aims to shed 30,000 jobs worldwide by 2013 – 10 per cent of its workforce – saving £2.4billion a year. Obviously profits of £14 billion aren’t quite enough.

However, the union representing workers at HSBC, Unite, will not accept these job losses without a fight. The national officer for financial services, David Fleming, said: “Unite will oppose any job losses at HSBC and Unite is in dialogue with the bank regarding the speculation today. Bank staff deserve so much more than this awful treatment by HSBC or any other employer. How can this bank consider staff cuts when it was the workforce that delivered it a profit of £13.8 billion last year?

“The hypocrisy of CEO Stuart Gulliver taking home £8 million, while talking up job losses in order to save money, will not be lost on the workforce.

“Unite is outraged that bank workers, who throughout the financial services industry are serving customers daily, are having their jobs cut which will mean service will suffer.”

What will it take for Cameron and Osborne to realise that maybe they shouldn’t ‘stick to the plan’ and the private sector will not be the knight in shining armour they had hoped?

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