Keep interest rates low until workers’ living standards rise, says TUC leader

  • @andymcsmith

Interest rates should be kept low until people on average incomes feel the effects of recovery in the form of rising living standards, the leader of Britain’s trade union movement has urged.

Frances O’Grady, General Secretary of the TUC, is lobbying for the Governor of the Bank of England to be forced to consider how many people are in work, and what jobs they have, before altering rates. Currently the Bank focuses just on the risk of inflation.

Union leaders are concerned that too much of the drop in the official unemployment figures results from people moving into low-paid self-employment rather than secure full-time jobs. Mark Carney, the current Bank Governor, is a guest speaker at next week’s TUC annual meeting.

“I would like to hear him promise that we are not going to see an increase in interest rates that could harm or potentially choke off recovery, until we are seeing people’s personal recovery,” Ms O’Grady said.

“I have raised this directly with Mark – that for us it’s not just even a case of jobs when half of new jobs growth is self-employment.

“People increasingly feel that if we are going into recovery, which the Government has said has been with us for two years now, then it’s about time people got the chance not just to repair the nation’s finances, but their own. Unless people have money in their pockets, local businesses and shop are going to suffer. Everybody should share in the benefits of recovery, not just those at the top.”

Unions are currently bracing themselves for the possibility that they will face tighter laws if the Conservatives are returned to power at the next general election.

Boris Johnson is one of several leading Tories who have suggested that it should be illegal for a union to call a strike unless half of its members in the affected workplaces cast their votes in a strike ballot.

“Some Conservatives are tearing their hair out as to why the Government appears to be launching another attack on trade unions when it hardly seems to be that we’re the big problem in the economy,” Ms O’Grady said.