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Negotiating a Path out of the Financial Crisis

Submitted by on 13 Sep 2011 – 17:17

Paul Kenny Paul Kenny, GNB General Secretary

The prospects for those without work this autumn is bleak as hundreds of thousands of public sector jobs are no longer available for them. Young workers have been very badly hit. The recession has hit the whole country particularly in sectors dependent upon discretionary spending.

The Government should recognize that it took the foot off the accelerator pedal and slammed on the brakes too soon in terms of sustaining  demand in the economy and  that this slowed the recovery from the bankers’ recession.

However George Osborne is blind to the fact that the economy is stalling as a direct result of his policies. His impersonation of Marie Antoinette has got to stop as all the cake shops close down.

Cameron and the cabinet have to stop Osborne strangling the economy by insisting that deflation is not the way to growth and a balanced budget. Boosting demand is the only way to get the economy moving.

VAT should be cut to 17.5% immediately.

Private sector employers making record profits must share this income with their hard pressed workers rather than offering below inflation pay rises to staff struggling to meet higher prices for energy and other necessities.

The assault on public sector workers’ pay over the last few years has led to deep cuts in living standards and is getting close to busting point. These workers cannot take a pay freeze for a third year.

Neither can low paid public sector workers afford cuts in pay to meet higher pensions contributions to ease Treasury finances. GMB and other trade unions have engaged positively in the central talks about public sector pensions reform and some principles have been agreed. However it was always the GMB view that the key issues need to be debated in the individual schemes and we have being doing this for some months now.

I hope we will find negotiated outcomes in each of the scheme talks. GMB continues to prepare for industrial action should negotiations fail. In the meantime if the government proceeds to consult on an initial contribution increase we will seek to ensure the sustainability of schemes is not threatened by this move.

The ultimate fate of the 31,000 elderly and vulnerable residents and 41,000 care staff at Southern Cross is still not settled as I write and should serve as a warning as the NHS bill goes back to Parliament.

What happened at Southern Cross must inform not only Labour Movement policy toward social care and health care but also the Labour approach to economic policy and to the role of the State. Never again should trade unionists be lectured by people either inside our movement or by the greedy and the gullible outside it, about the necessity of rolling back the State and letting the market rip.

The British labour movement founded a political party that sought election to government to deal with the perennial flaws of capitalism. The most obvious of these flaws are the tendencies towards excess and monopoly exhibited by the elite in private equity and banking.

Southern Cross should serve as a warning of what happens when we forget our basic approach to economic policy and the role of the state. The Labour Movement needs to proclaim the merits of this approach, and to cogently and relentlessly put the case for it, not apologise or hide it. The best guide to theory is practice as the antics of the greedy and the gullible show.

What is really galling is that many of those who organized the mess that is the care sector in private hands are still in senior jobs in the City employed as highly paid financial experts.  Most are no friends of our movement. We need to expose the reality that they are either greedy or gullible individuals.