Cameron declares war on the "enemies of enterprise"

He should remember that he's the public-sector workers' Prime Minister, too.

"We are the party of enterprise," said David Cameron in his Cardiff speech. Well, that's fine and dandy. The problem is that he then foolishly declared open season on the "enemies of enterprise". This seems to be pointed directly at the six million people employed in the public sector -- or nearly 21 per cent of total employment who are doing the nation's work. And they are all voters. It's unclear why he would want to upset them even further just as the austerity measures -- ie unemployment -- are about to hit the public sector.

So I can announce today that we are taking on the enemies of enterprise.The bureaucrats in government departments who concoct those ridiculous rules and regulations that make life impossible, particularly for small firms. The town hall officials who take forever with those planning decisions that can be make or break for a business -- and the investment and jobs that go with it.The public-sector procurement managers who think that the answer to everything is a big contract with a big business and who shut out millions of Britain's small and medium-sized companies from a massive potential market.

So, let's get a few things straight here. First, the financial crisis was caused by failures in the private sector that the public sector had to rescue. RBS and Lloyds were moved from the private sector and are now in the public sector. Second, spending cuts that reduce local authority budgets are probably going to increase the amount of time that it takes to deal with planning applications. The procurement officers, also faced with spending cuts, will try to buy goods as cheaply as possible, which will often mean in bulk from one large supplier. Now, Dave is telling them to spend more and buy the goods from lots of small suppliers. Isn't the coalition supposed to be making efficiency savings? Now, he wants a reduction in the size of such savings. Idiotic.

Third, there are not millions of small to medium-sized companies being squeezed out by bureaucracy. According to the Department of Business Innovation and Skills estimates for 2009, there were only 1.2 million enterprises with any employees at all in total in the UK. So that claim simply is not true. Fourth, despite Cameron's claims that it is a good idea to give money to the unemployed to set up a business, academic literature suggests that there is little evidence that such programmes work. They do not seem to be good value for money. There is a large, deadweight loss in such schemes, which means many of the successful firms would have been successful anyway. Interestingly, the scale of a deadweight loss was exactly the argument the government used for the abolition of the Future of Jobs Fund. One rule for business and another rule for the young.

Fifth, there is also little evidence that countries with higher self-employment rates are more successful on any outcome measure. The problem with self-employment is that failure rates are high and for most self-employed people, incomes are low. Indeed, many have negative incomes as they make a loss. So, unlike bankers, they do have pay for performance and, when things go wrong, they make losses. For many, a business failure is devastating, as they have pooled rather than diversified their assets. It often involves loss of business, job, savings, pension, home and sometimes even marriage. For most people, becoming self-employed is a bad idea. Plus, governments are very bad at picking winners.

Finally, there are around six million workers today employed in the public sector, which, since December 2008, includes both RBS and Lloyds. Of these, nearly 60 per cent are union members. Hard to think they will sit idly by in the face of such attacks. You can't legislate good industrial relations; a disenchanted worker can always drop a spanner into the works. Dave's remarks are unlikely to motivate public-sector workers arriving at work on Monday. He doesn't seem to understand that he is everyone's Prime Minister. No wonder the coalition's poll ratings are falling.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

Getty
Show Hide image

Our union backed Brexit, but that doesn't mean scrapping freedom of movement

We can only improve the lives of our members, like those planning stike action at McDonalds, through solidarity.

The campaign to defend and extend free movement – highlighted by the launch of the Labour Campaign for Free Movement this month – is being seen in some circles as a back door strategy to re-run the EU referendum. If that was truly the case, then I don't think Unions like mine (the BFAWU) would be involved, especially as we campaigned to leave the EU ourselves.

In stark contrast to the rhetoric used by many sections of the Leave campaign, our argument wasn’t driven by fear and paranoia about migrant workers. A good number of the BFAWU’s membership is made up of workers not just from the EU, but from all corners of the world. They make a positive contribution to the industry that we represent. These people make a far larger and important contribution to our society and our communities than the wealthy Brexiteers, who sought to do nothing other than de-humanise them, cheered along by a rabid, right-wing press. 

Those who are calling for end to freedom of movement fail to realise that it’s people, rather than land and borders that makes the world we live in. Division works only in the interest of those that want to hold power, control, influence and wealth. Unfortunately, despite a rich history in terms of where division leads us, a good chunk of the UK population still falls for it. We believe that those who live and work here or in other countries should have their skills recognised and enjoy the same rights as those born in that country, including the democratic right to vote. 

Workers born outside of the UK contribute more than £328 million to the UK economy every day. Our NHS depends on their labour in order to keep it running; the leisure and hospitality industries depend on them in order to function; the food industry (including farming to a degree) is often propped up by their work.

The real architects of our misery and hardship reside in Westminster. It is they who introduced legislation designed to allow bosses to act with impunity and pay poverty wages. The only way we can really improve our lives is not as some would have you believe, by blaming other poor workers from other countries, it is through standing together in solidarity. By organising and combining that we become stronger as our fabulous members are showing through their decision to ballot for strike action in McDonalds.

Our members in McDonalds are both born in the UK and outside the UK, and where the bosses have separated groups of workers by pitting certain nationalities against each other, the workers organised have stood together and fought to win change for all, even organising themed social events to welcome each other in the face of the bosses ‘attempts to create divisions in the workplace.

Our union has held the long term view that we should have a planned economy with an ability to own and control the means of production. Our members saw the EU as a gravy train, working in the interests of wealthy elites and industrial scale tax avoidance. They felt that leaving the EU would give the UK the best opportunity to renationalise our key industries and begin a programme of manufacturing on a scale that would allow us to be self-sufficient and independent while enjoying solid trading relationships with other countries. Obviously, a key component in terms of facilitating this is continued freedom of movement.

Many of our members come from communities that voted to leave the EU. They are a reflection of real life that the movers and shakers in both the Leave and Remain campaigns took for granted. We weren’t surprised by the outcome of the EU referendum; after decades of politicians heaping blame on the EU for everything from the shape of fruit to personal hardship, what else could we possibly expect? However, we cannot allow migrant labour to remain as a political football to give succour to the prejudices of the uninformed. Given the same rights and freedoms as UK citizens, foreign workers have the ability to ensure that the UK actually makes a success of Brexit, one that benefits the many, rather than the few.

Ian Hodon is President of the Bakers and Allied Food Workers Union and founding signatory of the Labour Campaign for Free Movement.