Unlike the UK, France and Germany aren't in recession

Osborne was wrong to blame the eurozone for our double-dip recession.

George Osborne is fond of blaming the eurozone crisis  for Britain's economic woes (he recently claimed that the crisis had "killed off" growth in the UK) , so it's worth noting that, unlike the UK, the euro's two largest members - Germany and France - aren't in recession. While the British economy contracted by 0.7 per cent in the second quarter of this year, Eurostat figures out today showed that the French economy remained flat, while Germany grew by 0.3 per cent. In the previous quarter, Britain shrunk by 0.5 per cent, while Germany grew by 0.5 per cent and France stagnated.

Of course, since much of our trade is with the eurozone, its lack of growth (it collectively shrank by 0.2 per cent in Q2), doesn't help. But as even Tory MPs concede, it is some exaggeration to claim it "killed off" our recovery. The Chancellor accomplished that all by himself. It was his absurd claim that the UK was on "the brink of bankruptcy" and his premature austerity measures, most notably the 2.5 point rise in VAT, that destroyed confidence and strangled growth. With the exception of Italy, Britain is the only G20 country to have suffered a double-dip recession.

At this moment, contrary to Osborne, Britain should actually be profiting from the eurozone crisis. With investors ever more reluctant to lend to eurozone countries, the UK can afford to borrow at the lowest interest rates for 300 years. We are, as Osborne has said many times, a "safe haven". Yet the Chancellor appears determined not to take advantage of this fact. He has continually refused to borrow for growth (in the form of tax cuts and higher infrastructure spending), despite little evidence that this would lead to a rise in British gilt yields. It is only Osborne's political pride that is preventing a change of direction. Borrowing for growth would be a tacit admission that his nemesis, Ed Balls, was right and that he was wrong. Until the Chancellor backs down, we will all collectively pay for his stubbornness.

George Osborne claimed that the eurozone had "killed off" the UK's economic recovery. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.