Progress | Centre-left Labour politics

Unions and the new economy

‘There will come a time when the Treasury understands economics but it hasn’t happened yet’ and with that remark it was Martin Wolf of the Financial Times who became the darling of the Unions21 annual conference. Our conference theme of Unions and the New Economy brought together economists, journalists, trade unionists and politicians to debate what a vision for a new kind of economy would look like, one with democracy and equality as its motivation.

The coalition’s approach to tackling the deficit is destroying growth, increasing unemployment, causing a rise in  inequality and has no structural plans for economic expansion (just ask Mr Wolf). The social impact of this is catastrophic and yet we’re expected take a sack cloth and ashes acceptance to ‘austerity’ as though we collectively blew  all the cash on VAT-free caviar.

Frances O’Grady of the TUC opened the day for us by calling on trade unions to lead the battle of ideas: to articulate a new economic settlement that offers ordinary workers hope, and convinces socialist and social democrat politicians that elections can be won from a progressive left platform.

This was the challenge to all of us as delegates and campaigners and, although I am reluctant to suggest that the answer to the perennial economic question must always be the ‘German model’, this was certainly a prevailing theme throughout the day’s discussions.

Few have weathered the financial crisis better than Germany and their success demonstrates how private sector growth can be achieved through balancing the interests of businesses and employees. German unemployment has risen by far less than in the UK partly because employees, management and the government worked together to create a ‘short-work scheme’, which saw adjustment come through fewer hours rather than lost jobs.

In our breakout session on ‘good work’ Deborah Hargreaves of the High Pay Centre again reiterated that there is currently ‘a strong political buy-in for people to change capitalism’. This not just constrained to the social movements of UK Uncut or Occupy but to all models of corporate governance. Building an infrastructure of worker representatives, not just on remuneration committees, but through democratising workplace structures. This would offer a greater role for collective bargaining, stronger employment rights and broker a relationship of mutual reward. There is a real appetite for change in how we consume, how we are represented and how we are valued. This was later developed by Lord Glasman who said that all pubic sector organisations should be run on the tripartite basis of ‘a third, a third, and a third’ by representatives of workers, users and funders.

Yesterday’s employment figures offer scant comfort; without prioritising sustainably we’ve seen a rise in those taking part-time work (often not through choice) temporary contracts and underemployment  resulting in a persistently precarious job market. According to IPPR, we have 8,000 more women unemployed than last month and 27,000 more women unemployed than a year ago. When we talk about a ‘rebalanced’ economy this shouldn’t be a blinkered service sector versus industry debate but rather the rebalancing of economic opportunity.

As this government is doggedly intent on pursuing its vision of a smaller state, a free market economy and a weakened workforce we need to provide an alternative that is based on investment and commitment rather than short-term austerity hits at the expense of long-term growth.


Jenny Simms is director of Unions21 and writes the Union Matters column for Progress


© Copyright: STEFANO CAGNONI 2012

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Jenny Simms


  • I did a little dance and I had a little job/ then somebody exploited me and so I threw a lob/it landed in their dinner plate that had cost them quite a lot/their dinner went all cold and stuff but they became quite hot/
    “you’re not sitting how we told you the table’s ours you see/we shipped it in from overseas it’s made from a special tree”/ “special trees and plates of gold and being in charge of us/you can’t have bloody everything
    we’re going to make a fuss.

  • Excellent piece from Jenny. Pragmatic Radicalism, which I chair, was fortunate to have the support of Jenny and and unions21 for our January Top Of The Policies event on skills, chaired by Michael White (at which unions21 chair Sue Ferns spoke). Unions21 do superb work and this conference, which I sadly couldn’t attend, shows what a vibrant and important role modern trade unions have in informing debate on the biggest issues of the age.

    Our next Top Of The Policies event is on housing on 23 May, and is chaired by Jack Dromey MP, Shadow Housing Minister.

    More information about Pragmatic Radicalism at

    John Slinger

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