Margareta Pagano: Don't even think about banning the right to strike
Unions and bosses should work together to keep jobs
Sunday 08 August 2010
The first use of the word "strike" is said to have appeared in London in 1768, when sailors "struck" against their employers by taking away the top gallant sails of merchant ships in port, thereby disabling the ships.
Since then it's taken hundreds of years of death and struggle to establish the right of workers to remove their labour as a last resort in protest at their conditions.
Even allowing for the 1970s, workers striking in the UK is still a rarity; only 17 days have been lost in industrial action this year. That's why it seems so peculiar for the Chartered Institute of Personnel and Development, a body representing human-resources professionals no less, to be urging the Government to consider banning strikes in essential public services. It's the growing fear of an autumn of discontent which prompted the CIPD to suggest that the coalition consider tightening the laws on strike ballots and compulsory arbitration if faced with potential strikes in front-line services such as schools and hospitals.
If you wanted to raise a red rag to the unions, then this seems a fine way to do it. But if it was hoping to keep the peace ahead of what may be a testing time, then the CIPD's call is clumsy, if not downright foolish. For one of the most notable features of this crisis has been the way employers and unions in the private sector have worked together to keep jobs, with, in many cases, unions accepting pay cuts or freezes in return for security. Overall, there have been few job losses in the private sector, and living standards have been more or less maintained; unions have taken the long-term view that the more jobs the better – even if pay and pensions have been squeezed.
Not so in the public sector, which has had more money lavished on it over the past 13 years than at any time in history. While there are still many low-paid workers, there are also many who have received eye-popping salaries and bonuses – as high as in the private sector. The UK's public sector, like those in the EU's Mediterranean countries, has ballooned out of all proportion, and current levels of spending are simply unsustainable.
So it's going to be fascinating to see how the public-sector unions respond. Tactically, some of the more bellicose unions will continue to threaten industrial action and strikes because their job is to look after their employees, and not the public. Brendan Barber, the head of the TUC, makes the point in his interview with us that he believes that when the public starts to see the full savagery of the cuts, the mood will swing behind the unions.
I'm not so sure. The more stories that Eric Pickles, the Communities Secretary, tells about how the last government used taxpayers' money to fund lobbying experts to run campaigns on its behalf, the more the private sector is going to lose sympathy with the unions. I think the unions secretly know that, which is why, strategically, they should be looking at working with the Government to see where jobs can be saved, and maybe even accepting pay cuts in return for keeping jobs. It's also something the coalition should be working towards – behind and in front of the scenes.
But however the unions respond, even talking about taking away strike rights should be dismissed.
On the third anniversary of the 'credit crunch', what should it be called?
Tomorrow is the third anniversary of the start of the credit-crunch, the day when short-term credit markets froze and the French bank, BNP Paribas, was forced to suspend three of its hedge funds, worth €2bn, after problems raising money in the US sub-prime market. On the same day, the European Central Bank pumped in billions of euros to prop up the money markets. In the autumn came the run on Northern Rock, the first in more than 100 years. Since then, the financial crisis has turned into a full-blown global recession, we've had a stock-market crash and recovery, a banking collapse precipitated by the downfall of Lehmans, and the rescue of RBS and HBOS. Then there was the Dubai debt crisis, the Greek crisis and a continental sovereign debt crisis, which rumbles on. But it's interesting that we haven't yet come up with a proper nickname to describe what we have been through. The Wall Street Crash or the Great Depression tell us tangibly what happened in the 1930s, while the dotcom bubble or the Tequila crisis need little explanation. Other events are named for politicians – the Barber Boom – or after places, such as Bretton Woods. Or there's the plain dramatic, as in Black Wednesday.
The credit crunch is the most familiar tag but it's not correct, as this was a crisis of solvency rather than credit; the world's biggest banks were basically bust. One of the reasons there isn't a better tag may be that we are still in the middle of it; here in the UK, the full impact of the collapse will only start to bite over the next few years as higher prices, rising taxes and higher unemployment filter through. There's been lots of talk of a return to austere times but my fear is that we've seen nothing yet. For now, my favourite name is the Great Bank Robbery while my colleague Richard Northedge suggests the Never Never Crash in honour of the debt we took on but I'm sure readers will come up with something even snappier.
What Next? Dull retailer needs to smarten up
Simon Wolfson, the boss of Next, is famously gloomy when it comes to trading so it was no surprise when he warned last week that consumer spending is slowing. He's known for being cautious about future prospects – and then beating forecasts – but this time Wolfson's prognosis is perhaps closer to what is really happening on the street. The VAT hike, rising raw material prices and impending public-sector jobs cuts are making shoppers much more cautious. But there's another reason Next may be suffering; its clothes are looking dull, if not frumpy, compared to some of the snazzier fashion up-starts. Wolfson needs to sharpen up his design team or he may have reason to be really downcast; shares bounced back a bit on Friday to £20.14p but still look toppy.
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