Coronavirus: Channel post-war spirit to rebuild economy after crisis, unions say

‘Coronavirus doesn’t have to equal mass unemployment and a poorer, meaner country,’ says TUC

Lizzy Buchan
Political Correspondent
Wednesday 20 May 2020 10:20
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Frances O’Grady, general secretary of the TUC, wants investment in growth, not a return to austerity
Frances O’Grady, general secretary of the TUC, wants investment in growth, not a return to austerity

Union leaders have urged the government to channel the spirit of post-war Britain to rebuild the economy after coronavirus or risk consigning millions to the “despair of unemployment”.

Frances O’Grady, general secretary of the Trades Union Congress (TUC), called on ministers to emulate the decade after the Second World War by investing for growth, rather than bringing back austerity measures which left public services vulnerable when the pandemic hit.

Analysis by the TUC, which represents trade unions, found that investment for growth between 1947 and 1957 achieved an average growth rate of 3.3 per cent, whereas the austerity years after the 2008 financial crash achieved growth of 1.9 per cent.

It comes as the chancellor Rishi Sunak said the UK faces “a severe recession the likes of which we have never seen” following the coronavirus crisis, with doubts over whether the economy will bounce back quickly.

In a new report, the TUC argues that the UK will recover more swiftly through investment for growth, prioritising workers’ wages and support for welfare, as well as strong public services.

“The UK’s weak economy and ten years of cuts left our country unprepared for coronavirus,” Ms O’Grady said. “Let’s rebuild our country through hard work, determination and investment in all our futures – not cuts to spending, deregulation and tax breaks for millionaires and bosses.”

Boris Johnson has sought to position himself as a wartime leader, battling an invisible enemy, but the TUC said the post-war years were a better model for the path ahead.

Ms O’Grady said: “Seventy-five years ago, Britain was bloodied, battered – and broke. Yet after the war Britain’s economy grew faster than ever before.

“We did it not by pay freezes and cuts, but making the priority decent jobs for everyone, new homes, infrastructure and a new national health service.

“So let’s channel the spirit of 1945. Coronavirus doesn’t have to equal mass unemployment and a poorer, meaner country.

“We can do what the post-war generation did: grow our way out of this crisis and build a better life for everyone.”

Speaking at the launch of the report, shadow chancellor Anneliese Dodds said the government must put aside its “allergy” to challenging the economic status quo.

Ms Dodds said: “It [the report] accurately diagnoses how the eroded resilience of our public services has hampered our response to coronavirus and how our fragmented and fractured labour market means many families are not economically resilient.”

She said the government was “guilty of misplaced optimism” around the economic recovery, with the challenges of the coronavirus crisis heightened by uncertainty about post-Brexit trade.

Ms Dodds added: “Our best chance to weather these storms and keep jobs in the UK is with an active government pursuing a clear industrial strategy. Ambition and confidence are needed here as well as a willingness to grasp nettled and take hard choices on regulatory and investment issues.”

It comes after the chancellor admitted the UK economy may not bounce back straight away as many had hoped, once the lockdown begins to ease.

Mr Sunak told the Lords Economic Affairs Committee on Tuesday it was “not obvious that there will be an immediate bounce back”, noting that households may be reluctant to start spending again even if businesses reopen.

“In all cases, it will take a little bit of time for things to get back to normal, even once we have reopened currently closed sectors,” he said.

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