The major gap in government's approach - Frances O'Grady interview
As the Omicron variant takes hold, Frances O’Grady has criticised the failure to introduce a new form of furlough scheme as a “a major gap in the government's approach,” calling it “announce first, sort out how to deal with that announcement afterwards.”
And responding to the impact of rising inflation she warned that “this is the biggest Christmas wage squeeze we've seen in nearly a decade.”
Speaking to me shortly after this week’s TUC general council meeting, the TUC general secretary described a “new mood amongst working people.”
The interview will be sent out to subscribers soon.
Asked about the failure to bring forward a furlough scheme to deal with the consequences of Omicron for workers in sectors of the economy like manufacturing, travel, hospitality, retail, and the arts, Frances O’Grady said: “This is a major gap in the government's approach: announce first, sort out how to deal with that announcement afterwards. The TUC has been saying for months now that we need a ready-made wage subsidy scheme.”
The TUC has been calling on the government to bring forward a ‘daughter of furlough’ programme for some time but the Conservatives have not delivered. Instead, she said, “here we are, again, where despite our best efforts to encourage the government to plan ahead we don't have that ready-made scheme in place. And even with working-from-home guidance, never mind the potential of further lockdowns, we are already seeing particular industries, particular plants and firms in real difficulty and livelihoods on the line. So whether it's travel, whether its culture, whether it's hospitality, we need support, but critically we need that support channelled through wage packets because that's the best way to ensure not only jobs and skills are protected, but that we maintain demand in the economy. Because the one thing about ordinary working people is, people spend their money in local shops and businesses. They don't stash it away in offshore tax havens.”
In response to this week’s new figures, with inflation at 5.1 per cent, the TUC’s general secretary said that “what we've seen is rising inflation ripping through pay packets and as our brilliant TUC team showed very clearly this is the biggest Christmas wage squeeze we've seen in nearly a decade. And that's on the back of a decade of stagnating wages, stagnating at best, in many cases real wage cuts. On top of that, we've had Universal Credit cuts, which have hit some of the lowest paid, but we know also the middle are going to be hammered by that National Insurance contribution tax hike that very unfairly burdens lower paid workers, average workers and young workers. So it's quite a cocktail that this government has mixed up. And we think there's a responsibility on them to take, again, some very practical action.” She called for lifting the minimum wage “closer to a real living wage” and said, “we need real wage increases for public sector workers, key workers, workers across the board.”
The Treasury has submitted its case to the public sector pay review, arguing that public sector pay should not keep pace with inflation. Asked if she had a message for the government on that she said:
“they need to take a long, hard look at themselves in the mirror, and frankly, I think they should be ashamed of themselves. This kind of issue of double-standards and double-talk, of praising key workers to high heaven, and then proposing that their real pay should be cut, I think people are sick and tired of the hypocrisy of it, frankly.
She added that “the government should be under no illusion that there is hurt and there is anger, about the way key workers have been treated,” arguing that the notion that rising inflation meant workers should accept a pay cut was wrong: “I have to constrain my impatience with this attempt, in some quarters, to talk up the risk of a wage-price spiral,” she said. Pursuing her point, Frances O’Grady added: “do us a favour, we're not stupid, trying to blame workers for inflation is frankly, a very poor joke. On the contrary, we need to address that issue of living standards and boosting demand.”
Sensing a change in attitudes, she offered the Conservative government an indication of the strength of feeling if the workforce continues to be squeezed: “I think there is a new mood amongst working people, I think something has happened in people's heads.”
“they've been so dedicated, without any respite, by the way, through this crisis. It's astonishing, the dedication, that people have shown and at the same time, they've seen other people getting rich on the back of this pandemic, through those VIP covid contracts. And It's sickening, and I think something has shifted in people's heads. And we're beginning to get that feedback through our unions, through those consultative ballots, that people have had enough. They're not going to be taken as mugs.”
The discussion with Frances O’Grady will be published later, including her thoughts on fire and rehire, Boris Johnson compared to Gordon Brown, the government’s latest anti-union measures, and the international effort we need to counter Covid19.
update: the full write-up is now online here