Further, the Government intends adding to the numbers of unemployed. That is what the Chancellor means when he refers to 'efficiency savings' in the public sector. Since hospitals or schools are not in a position to increase their revenue by producing more, as a private manufacturing company could, 'efficiency' or 'productivity' will be achieved by fewer people doing the same amount of work. But there is an alternative: this is for the same number of people to work fewer hours each and to accept some corresponding reduction in pay. This is called worksharing and it is the one policy that can be guaranteed immediately to shorten the dole queues. Yet it is being deliberately written out of the Government's strategy.
Worksharing is only one part of a strategy that Britain and other European countries must adopt if they are to return to anything like full employment. This should include action on the lack of demand within the West's leading economies and the rebuilding of the industrial structure so recklessly destroyed during the 1980s. The prospects for sustained economic growth are favourable - falling inflation, low real interest rates, falling oil prices. But the question remains: will the fruits of growth go largely to those already in work, or will they be shared with those now unemployed?
There could be full employment very quickly if the existing amount of work, and the income that goes with it, was shared out fairly. The manifesto signed by European socialist leaders last month recommends a cut in working hours 'to ensure a better division of the available work'. But it is silent on sharing the pay packets.
The French parliament is currently discussing job-sharing arrangements. The Senate has approved the idea of a 32-hour four-day working week. The proposals involve decreases in employers' social security costs, together with cuts in pay. Work- sharing is also developing at plant or company level. At Volkswagen in Germany, for example, there was a choice: accept the sacking of 30 per cent of the workers or agree to share a reduced wage budget between the existing 100,000 employees. Unions and management have agreed on the latter, though they dispute whether the final settlement involves a 20 per cent or 10 per cent cut in wage costs.
Here in Britain workers at Sheffield City Council, though many of them earn only modest wage packets, have agreed to a 5 per cent wage cut to prevent any of their colleagues being sacked.
The Sheffield agreement is the first time a large group of British workers has voted to retain jobs by sharing out the numbers of hours that could be paid from a Government-imposed cut to the council's budget. It was jointly negotiated between management and unions but the unions insisted that employees had a right, once the negotiations were complete, to accept or reject their proposals. This is one of the difficulties with worksharing. In effect, they question the authority of management. It is traditionally management's prerogative to decide on the numbers for hiring and firing.
The use of job-sharing to prevent big job losses in a particular firm or local authority is dramatic - but it merely ensures that there is no increase in the numbers of unemployed. Job-sharing to create new jobs is less spectacular but far more important. This involves establishing a policy whereby pay rises are less than increases in productivity. Will workers refuse productivity pay increases and demand, instead, that more jobs are created? If so, they are again taking into their own hands decisions that had previously been the province of management.
The Budget makes clear that the Government wants a freeze in public sector pay bills in the coming year. But a freeze in the overall pay bill and a freeze in individual wages are different things. In any one year half a million job vacancies occur in the public sector as people move jobs, die or retire. Will these wage packets be shared out among existing employees, thereby giving handsome wage increases? Or will public sector workers insist these half a million jobs are filled, even though that means a wage freeze for themselves?
MPs sidestepped this question recently when they voted themselves a two-stage pay increase (after a wage freeze, it is true). They could have voted the money instead to a small job-creation project. Nothing would have better focused public attention on the link between moderate pay increases and new jobs.
If public sector workers can be more bold and imaginative in the coming pay round, it would be crucial for the rest of the 1990s. If those of us in work keep our drawbridge mentality, ensuring the unemployed do not rejoin us, then the outlook is grim, even if falling inflation, interest rates and oil prices underpin a sustained economic recovery. Economic growth is not a panacea. Throughout the 1980s, with unemployment at a level unseen since 1930, those of us in work continued to award ourselves real pay increases.
If we cannot learn now to share our wealth more equitably, we are not likely to behave more fairly in the future. Job-sharing is not a gimmick, as critics on the left and right claim. It shows a determination to impose some moral order on the market system. That alone would show that the post-Thatcher era had well and truly begun.
Frank Field is Labour MP for Birkenhead.Reuse content