From the TUC

Working people must not pay the price of leaving the EU

24 Jun 2016, by in International

The result of the referendum is, of course, a disappointment for the TUC. We campaigned hard for Remain, because we believed that was the best option for working people’s jobs, wages and rights.

But the British people have spoken – and they have voted to leave the EU. As the representatives of 6m working we people, we respect their decision.

Now, the government’s first priority must be to minimise any negative impact on the economy. We need an urgent national strategy to save British jobs, involving unions and business. And for the longer term, we need a clear plan to retain access to the single market.

The government needs to heal the wounds in the country – not just those in the Conservative party. Working people are fed up with paying the price for globalisation and the financial crisis it caused. We should all reflect on the anger and disaffection of many voters, expressed at the ballot box, and think about how we rebuild confidence, common purpose and fellow feeling across the UK.

Throughout the coming years, the TUC will continue to advocate policies that meet the needs and aspirations of working people.

The TUC has four immediate concerns.

Defending the pound – and our standard of living

In the next few days, the government needs to take steps to shore up the pound or at least limit its fall. We must prevent prices soaring for basic goods. The UK imports 40% of its food – and price rises will inevitably hit the cost of the weekly shop. The cost of goods manufactured abroad such as phones and white goods and components for manufacturing in the UK will also rise.

The pound was worth $1.60 when polling opened yesterday, having recovered from $1.40 where it had been for some time. But it fell back during the night, and if it fell as far as $1.20, many foreign imports would cost considerably more – representing a catastrophic cut to our standard of living. The TUC argues for a floor to be put on sterling’s drop, probably at $1.30.

Supporting British industry, jobs and wages

The impact of reductions in the value of the pound – and the stock market implications – will take time to affect the UK manufacturing sector. Components already on order, and investment decisions, are already in place, although they have been affected by the uncertainty caused by the referendum campaign.

But there is still a need for urgent action by the government to shore up confidence. We need an early decision to show the markets and businesses that the government intends to support manufacturing and the economy as a whole.

Unions have a role to play: the involvement of employers and unions in the German response to the global financial crisis from 2008 onwards was a key factor in Germany’s earlier recovery than the UK’s. Unions and employers can help prevent investors from fleeing the UK, for example.

There also needs to be a change from monetary easing to fiscal expansion, as the OECD has proposed. A further cuts or austerity budget is precisely the wrong solution at this time. Instead, the government needs to signal that it will intervene – giving the go-ahead to a new runway at Heathrow, announcing Crossrail 2, underwriting loans for future investment and spending on information and communication infrastructure. They should also set out a big programme of public works – especially building homes, as well as schools and hospitals. And the government could use public procurement to signal its support for British jobs.

But the chancellor also needs to strengthen demand (and make it possible for working people to afford higher prices) by encouraging pay rises in both the public and private sectors. Working people’s wages are an average of £40 a week less than they were when the global financial crisis began. Higher wages would not only stimulate the economy, they would address the anger felt by many at their falling living standards, which played out in this vote.

The government should abandon the 1% cap on public sector pay rises, and private sector employers who can pay more should be forcefully encouraged to do so. Ideally this would be done through promoting collective bargaining, but in the shorter term, the IMF have just advised Japan to require profitable employers to ‘comply or explain’ against a target of 3% wage increases in the private sector. Scrapping the public sector pay cap would give private sector employers the confidence to raise wages.

Rebuilding tolerance, healing divisions

Healing isn’t just needed in the Conservative party, it’s needed in the country. The UK was deeply split during the referendum campaign. People made their own decisions based on what they considered best for the country – and we need to move on from that disagreement without rancour or recriminations.

The TUC has consistently argued that it is not racist to be concerned about immigration. We now need a proper debate about how we manage immigration in the interests of Britain. The government should reintroduce the Migration Impacts Fund so that the benefits of migration are shared fairly with the communities and public services in the areas of highest immigration and highest pressure. And the TUC wants firmer rules and tougher enforcement to prevent unscrupulous bosses using migrant workers to undercut local labour.

We need to act against division and in the interests of unity. That means we have ensure migrants integrate into their local communities, making sure everyone gets help to learn English, promoting modern British values, and supporting volunteering and community activities. A strengthened border force would give people more confidence that migration is being managed better. But at the same time, politicians need to stop making promises they can’t keep, and stop blaming migrants for things that government can control, like under-pressure public services.

In the short term, the government needs to clarify the status of British people living and working in the rest of the EU, and of EU citizens in the UK.

Our relationship with the EU: where are we going?

The British people have been clear that they want the UK to leave the European Union. The task for the UK’s leaders is to work out how that can be achieved as swiftly and painlessly as possible.

The TUC does not support a prolonged transition as years of uncertainty will be catastrophic for investment. That would leave working people unable to plan their own futures. Investors will postpone job-creating investment until they know the UK’s future path, and people will put off major life decisions such as whether to marry, change jobs, start a family or buy a home.

The government must urgently bring together a team of people to plan Britain’s next steps. The team must be cross-party, and have members from the Northern Irish, Scottish and Welsh administrations and regional government, as well as representatives of business, unions and civil society.

The top priority is to protect access to the EU’s single market, to which nearly half of our manufacturing and much of our services are exported. Polling the week before the referendum suggested that 57% of voters – including half of those planning to vote to Leave – would favour the same relationship with the EU that Norway has, rather than the looser, less beneficial arrangements of countries like Canada and Switzerland. That relationship would guarantee jobs and rights at work. There is a growing consensus that it would make more sense than any other arrangement, while respecting the wishes of the electorate to leave the EU.

Regardless of the path chosen, we also want to see the workers’ rights that politicians from both sides defended in the referendum campaign protected. The government could start by committing not to repeal any of the rights which are guaranteed by the EU.

6 Responses to Working people must not pay the price of leaving the EU

  1. T HEWITT
    Jun 24th 2016, 2:12 pm

    This is not just an exit from Europe it will possibly end the UK a state that has existed since 1707
    The politicians who have failed to make clear the full impact of leaving and those promoting the Brexit will go down in History. Not as saviours but as having achieved what invasions and 2 world wars failed to do they Broke up the UK AND LEFT England as a nation that will be dependant on charitable good will from every where in Europe

  2. John
    Jun 25th 2016, 4:06 am

    Just two comments as regards your informative article Owen: 1) I am still not so convinced about expansion of Heathrow reference the damage to the local environment including much more noise. 2) only 52% made it clear that they wanted to leave the EU which for me is not anywhere near a meaningfull majority.

    As regards the reader comment above from T Hewitt which I more than sympathise with – you have now to move forward, however uncertain that can be (at present). To recent quote Caroline Lucas MP ‘we have to build bridges not burn them’ even now after your referendum. I still hope that your government will also concentrate on company/corporation tax avoidance. The Robin Hood Tax would also be very very welcomed, but ideological reasoning stops it.

  3. Owen Tudor

    OwenTudor
    Jun 25th 2016, 2:10 pm

    Thanks for the comments. I understand the concerns about the margin of victory, but that’s democracy, and our main priority is defending working people from the economic problems that are already showing up.

    John, on Heathrow, the General Council has of course considered the downsides that you mention, but on balance took the view that it was best to support that option – now even more so.

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  5. Justin
    Jun 26th 2016, 2:15 am

    I actually think your wrong on a lot of this, we should have these safeguards anyway, why don’t we, has that ever been asked, it is because we have politicians in responsible positions who do not necessarily have the qualifications and experience for the role, they rely on advisors who have no real life experience for the policy there responsible for, they have no accountancy for a decision, hiding behind parliamentary as a example, this all needs to change, we need politicians in roles that understand the role, for example. dwp and vunerable adults, lets look at the experience of these people i took four names at random, did i see any mental health knowledge, any learning disability knowledge, any form of health and social care knowlegde, does anyone see the picture here, so how do we change this, lets give them the experience, the department wont need them for the summer recess, so take of your mp’s clothes your going out to the real world, your new lifechanging experience will be focused in working in units, working in the community, working the nightshifts, maybe in the early hours, getting experience to see from the ground level what your positions and policies are causing to people and the amount of financial burden that to save your spending on unemployment, allthough are you, not at the cost per tribunal your not, and should your policies put someone back into the system, heres the stark facts minimum 650 pounds a week, started to see the link yet, so therefore we need people in power that know what there doing and are prepared to accept responsibility for there roles, who pay is related to performance, not ring-fenced, make a bad decision, low pay structure, make a bad decision that leads to a self harm event, let the courts decide, this is what is needed for this country, not mates rate mp’s occupying roles for which they have no skill or experience and for which there advisors have no knowledge, here’s a excellent example of this,

    i wont mention the name, the information came from wikipedia, here’s the career journalist,stockbroker, merchant banker, and what does he then do become involved in reform for welfare, so where does a journalist, stockbroker and merchant banker have such explicit knowledge about welfare and social conditions, please tell me, i can’t see the link, now if this same person then had to accept responsibility based around his skills and knowledge for the role, would he still be employed? did i just make a freudian slip?

    shall we have a look at another shining example of experience at the dwp

    quote “british workers are lazy” I like them one day have spent a week with me lifting car batteries, week in week out,we see who lazy then?

    a lobbyist for the tobacco and alcohol paid 165 pounds a hour for this not bad minimum wage?
    headed a press office
    november 2000 framework convention of tobacco control bat again
    then diageo alcohol company

    so again can you see the real world experience for working with vunerable adults

    what does this mean well shining examples of how not to employ people and perhaps we need to look at what the real experience of these people are when there past just appears to be lobbyists for tobacco companies in relation to there roles

    shall we now look at the world of finance

    what do we have here a 2:1 in history
    research
    membership of the bullingdon club,must put that on my cv, it look’s really good, tried to be a journalist, joined the maff for a few years, does good impersonations of tony blair for pmq, so must have been watching yes prime minister at some point in time
    did a really good deal with google
    so have we looked at the government debt deficit lately, not a lot said there really, wonder why perhaps they address that in ten years time as well, it will be a good deal for what left of england by then

    perhaps now your beginning to get the picture about having people with the right experience for the right role, have we got that, well go check the facts on wikipedia, type in the name, look at the qualifications and experience and then see what roles there doing and see if you can find a link, then maybe the answer as to why english politics is never going to work will be revealed.

    we need total reform of positions of power
    lets start by having these roles reformed, let start by having prospective candidates for these roles interviewed by people with experience who are independant, let’s start by then having them signed to contract and regular appraisals and reviews, let’s start with accountabilty and rsponsibility, let’s also start with a complete restructing of the set up, no yes people, we need people that understand there roles, all the departments should now undertake reviews of all the people, if they have for example no finance knowledge and skills in say building and construction, then of to the highways department.

    does it really have to be a ordinary person to teach this current lot how to suck eggs,i like to hope not, i also think i am wrong!

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