A SIXTY-NINE per cent rise in unemployment and more than two million people claiming universal credit spell an economic crisis that is out of control.
Government furlough schemes are clearly not enough to prevent many companies axing jobs on a huge scale.
Private firms are quite happy to take state handouts but do not conclude this comes with any obligations to society in return — a situation reminiscent of the fallout from the bankers’ crash 12 years ago, when bailed-out banks carried on inflating the housing bubble rather than invest in the productive economy.
There is nothing inevitable about this. State assistance can come with conditions. France’s approach to its crippled automotive industry is a case in point.
Car manufacturers have pointed to the collapse in sales due to the lockdown and called for immediate financial assistance, plus delays to environmental regulations, in response, using the fate of millions employed directly and indirectly by the industry across Europe as a bargaining chip.
Yet French ministers say they will act to save the industry and its highly skilled workforce — but on terms that actually accelerate the transition to “green” production, including by state subsidies for electric vehicles.
The details of the French plan have not been published, and the Emmanuel Macron government has a brutal anti-worker record. It is quite possible that its rescue package will come with a sting in its tail when it comes to jobs, terms and conditions. But the example illustrates the basic point that state intervention gives the government power to shape the behaviour of companies and even whole industries.
The Tories forced the cost of the last crisis onto the working class and will be determined to do so again. Ministers will be quite happy to use soaring unemployment to discipline the workforce by driving down wages and feeding the relentless growth of precarious work on insecure or short-term contracts that deny workers rights the labour movement fought for decades to win: sick pay, holiday pay, weekends.
But the case for an alternative is well placed to win public support. Research by the Class think tank has shown big majorities believe that British workers deserve pay rises across the board and feel the wealthy ought to be paying more tax.
There is also an appetite for the industrial strategy demanded by Scottish Labour leader Richard Leonard, who notes that “case-by-case bailouts of struggling businesses [don’t] meet the challenge.”
The Covid-19 crisis has not just exposed the weakness of Britain’s manufacturing base after decades of being undermined by government, but the precariousness of relying on super-exploited foreign labour to harvest our fields on rock-bottom wages.
Prince Charles has been wheeled out to try to evoke the spirit of the second world war by calling for a “land army” to replace seasonal fruit and vegetable-pickers from eastern Europe whose continent-crossing commute has been blocked by the lockdown.
Yet unless the labour movement can force a serious improvement to the pay and conditions prevailing in the sector, the same race to the bottom will continue, with growing unemployment utilised to force people to accept lower wages and a racist immigration system ensuring migrant workers form a second tier of the workforce on still worse rates.
Trade unions are demanding a recovery plan that goes beyond a return to the pre-crisis status quo and addresses the long-term problems of underinvestment, insecurity and poverty that are thrown into sharp relief by the pandemic.
The TUC played a key role in securing the job-retention scheme, and such support for self-employed workers as exists; but these were emergency measures adopted in the face of impending economic meltdown. The Tories will not be talked into changing the balance of power in the workplace.
Unions must do that themselves, co-ordinating action across sectors to put employers on the defensive.
