Union chief calls for MPC shake-up

Click to follow
The Independent Online
THE CHANCELLOR of the Exchequer came under fresh pressure yesterday to dismiss "out of touch" economists from the Monetary Policy Committee and replace them with experts from "the real world".

With the powerful committee meeting starting this Wednesday to review interest rates, the GMB general union, one of the Labour Party's biggest affiliates, published a dossier of redundancies and plant closures allegedly caused by the high pound.

John Edmonds, general secretary of the union, claimed that the high interest rate policy could cause the loss of 250,000 jobs this winter if interest rates went up again. Union leaders partly blame the strong pound for the closure of the Siemens plant on Tyneside with the loss of 1100 jobs, which was announced on Friday.

The GMB argued that the drop in demand was now hitting all sectors of manufacturing including engineering, textiles, food processing, chemicals, the motor industry, building materials and furniture-making. The union's survey was conducted among its own representatives in 10 regions.

Mr Edmonds said that manufacturing industry was especially vulnerable to the Monetary Policy Committee's attitude to interest rates.

"Manufacturing industry is being steered onto the rocks of recession by a crew who do not seem to mind how many jobs go overboard as long as they ultimately get to the Holy Grail of low inflation."

He said members of the Committee had virtually no direct experience of industry. "They seem willing to sacrifice good companies for the sake of a tiny drop in the inflation rate. It reveals their lack of concern for the real economy."

He pointed out that only one member of the nine-strong committee - DeAnne Julius - has recent industrial experience having worked at British Airways and Shell.

"Ms Julius is the only member to call for an interest rate cut in June. We need more people like her on the committee who know how the real world works." He said that last week's Cabinet reshuffle did nothing to stop the slide into recession.

The union blamed the strong pound for recent redundancies at Grove Europe, Sunderland, CW Taylor in South Shields and Baker Perkins and Reyrolle Switchgear in Hebburn. Reltec and Rainford was closing and Inco Alloys at Hereford had attacked the high pound.

In textiles and clothing, there have been factory closures and job losses at Pringles in Berwick and the William Baird Group's jacket plant at Guisborough. In food processing, expansion plans had been suspended and cutbacks were under way at Purer Foods in Poplar.

Comments