Ed Balls rails against cuts to manufacturing

“Curtailing ambition”.

Ed Balls used his address to yesterday’s EEF Manufacturing Conference, perhaps unsurprisingly, as a platform to rail against spending cuts in advance of the delivery of the budget in two weeks’ time.

Playing straight to his manufacturer audience’s fear of Britain sliding into industrial obscurity, he warned that the government’s obsession with deficit reduction at the expense of long-term investment would “curtail ambition” in business and “militate against” the UK’s ability to compete with Europe (read, Germany).

His appearance at the conference coincided with the publication today of a labour-commissioned report by Sir George Cox, Overcoming short-termism within British business, which argues for executive pay to reflect success over longer cycles, tax changes to favour equity markets, and a mechanism to make infrastructure investment decisions independent of political cycles.

Despite a fantastically awkward bit of audience Q&A, in which Balls avoided verbally signing his party up to Sir George’s proposals even though the report author was sitting just feet away in the front row, the rhetoric seemed to go over well with delegates.

But in terms of a demonstration of long term-thinking, the Sturm & Drang over the budget’s treatment of British business paled in comparison to the day’s opening presentation, delivered by Jim “BRICs” O’Neill, Goldman Sachs’ chairman of asset management.

As one might expect from the man who coined the now ubiquitous acronym for emerging markets, O’Neill had very little to say directly about the state of British industry, and even the UK’s fortunes in the context of the Eurozone crisis.

Instead he spoke frankly, and backed by some very big statistics, about the overwhelming importance of emerging markets, particularly China, to both the UK and world economies over the decades to come.

Professing himself to be an optimist, O’Neill predicted the world economy would grow close to 4 per cent in the current decade, largely thanks to China which, he reminded us in words notoriously borrowed by David Cameron, grows the equivalent of Greek GDP every twelve and a half weeks. To underscore the point, O’Neill mentioned in passing that China had, since the end of 2010, grown by approximately the current size of the Indian economy.

He said that if the US and China could partially reverse their traditional roles with regard to production and consumption, so that China ended up “spending more and producing less” and the US vice versa, “it would be a very good sign – and this appears to be happening.”

In response to audience anxiety over the Eurozone, he acknowledged that while Europe was still the single most important export region for the UK, the percentage of UK exports going to the Eurozone had fallen from 55 per cent to 45 per cent over the last decade, and would likely fall further to 39 per cent by 2020.

By the same point time, he argued, 17 per cent of UK exports will likely be destined for the BRICs, while Germany will probably be exporting twice as much to China as to France. If we had known that in the early 1990s, he posited, there might never have been a Eurozone in the first place.

When drawn by session chair Krishnan Guru-Murthy on what he would do if he were chancellor in two weeks, his answer said more through understatement than Balls did through twenty minutes on the soapbox:

“Those nations with more emphasis on long-term fiscal consolidation rather than a "cut debt now" mentality tend to be recovering better… It’s entirely understandable to want to lower debt and to shrink [the financial services] sector… but trying to do both at once? It could be very difficult, and I think I’ll leave it at that”.

Ed Balls. Photograph: Getty Images

By day, Fred Crawley is editor of Credit Today and Insolvency Today. By night, he reviews graphic novels for the New Statesman.

Photo: Getty
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The Future of the Left: trade unions are more important than ever

Trade unions are under threat - and without them, the left has no future. 

Not accepting what you're given, when what you're given isn't enough, is the heart of trade unionism.

Workers having the means to change their lot - by standing together and organising is bread and butter for the labour movement - and the most important part? That 'lightbulb moment' when a group of workers realise they don't have to accept the injustice of their situation and that they have the means to change it.

That's what happened when a group of low-paid hospital workers organised a demonstration outside their hospital last week. As more of their colleagues clocked out and joined them on their picket, thart lightbulb went on.

When they stood together, proudly waving their union flags, singing a rhythmic chant and raising their homemade placards demanding a living wage they knew they had organised the collective strength needed to win.

The GMB union members, predominantly BAME women, work for Aramark, an American multinational outsourcing provider. They are hostesses and domestics in the South London and Maudsley NHS Trust, a mental health trust with sites across south London.

Like the nurses and doctors, they work around vulnerable patients and are subject to verbal and in some cases physical abuse. Unlike the nurses and doctors their pay is determined by the private contractor that employs them - for many of these staff that means statutory sick pay, statutory annual leave entitlement and as little as £7.38 per hour.

This is little more than George Osborne's new 'Living Wage' of £7.20 per hour as of April.

But these workers aren't fighting for a living wage set by government or even the Living Wage Foundation - they are fighting for a genuine living wage. The GMB union and Class think tank have calculated that a genuine living wage of £10ph an hour as part of a full time contract removes the need for in work benefits.

As the TUC launches its 'Heart Unions' week of action against the trade union bill today, the Aramark workers will be receiving ballot papers to vote on whether or not they want to strike to win their demands.

These workers are showing exactly why we need to 'Heart Unions' more than ever, because it is the labour movement and workers like these that need to start setting the terms of the real living wage debate. It is campaigns like this, low-paid, in some cases precariously employed and often women workers using their collective strength to make demands on their employer with a strategy for winning those demands that will begin to deliver a genuine living wage.

It is also workers like these that the Trade Union Bill seeks to silence. In many ways it may succeed, but in many other ways workers can still win.

Osborne wants workers to accept what they're given - a living wage on his terms. He wants to stop the women working for Aramark from setting an example to other workers about what can be achieved.

There is no doubting that achieving higher ballot turn outs, restrictions on picket lines and most worryingly the use of agency workers to cover strikers work will make campaigns like these harder. But I refuse to accept they are insurmountable, or that good, solid organisation of working people doesn't have the ability to prevail over even the most authoritarian of legislation.

As the TUC launch their Heart Unions week of action against the bill these women are showing us how the labour movement can reclaim the demands for a genuine living wage. They also send a message to all working people, the message that the Tories fear the most, that collective action can still win and that attempts to silence workers can still be defeated.