Summer of glory? Yesterday, criminal barristers in England and Wales began a strike over legal aid fees, following three days of industrial action by the RMT union last week. Other public sector groups such as NHS staff, teachers and care workers could also go on strike, leading some to predict a ‘summer of unrest’. Progressive Economy Forum’s James Meadway puts a positive spin on the planned industrial action, dubbing this the ‘labour movement’s summer of glory’.
Further restrictions on union freedoms. Transport Secretary Grant Shapps has said that agency workers could be brought in to break what he calls ‘Marxist’ strikes and says that the measure will be introduced during the current RMT dispute if it is not resolved. Plans to ‘bus in’ agency workers to cross picket lines is "just the latest attempt to curb the right to strike", says the TUC’s Tim Sharp. Sharp argues that the use of agency staff to replace striking workers could put the public ‘at risk’ due to lack of training and would "most likely breach international law". The UK has already been criticised in this area, with the ILO Committee of Experts already concluding that British law does not do enough to protect strikers from being replaced by agency workers. Even the Spectator’s Brendan O’Neill has criticised the government’s proposal, saying that "the right to withdraw labour (is one)of the most important freedoms people enjoy."
Trade union membership today. The general trend of trade union membership over the past few decades has been one of steady decline. While over half of workers were unionised at the peak of trade union membership in the 1970s, the figure today stands at just over 23 percent. What’s more, only 13.7 percent of private sector workers now have their pay set by bargaining between unions and employers, claims Sarah O’Connor in the Financial Times. However, membership has started to rise very slightly in recent years. In 2020, 23.7% of workers were unionised compared to the low of 23.3% in 2017.
The case for collective bargaining. The government’s new offensive against trade unions is against the tide internationally, where unions and collective bargaining are coming back into vogue among governments and policy-makers.The OECD has said that collective bargaining is the best way to deliver better work. Though it has previously promoted breaking up sectoral bargaining institutions, it now argues that collective bargaining can tackle inequality, boost productivity, manage industrial change, keeps people in jobs and is good for employment. The TUC’s Kate Bell outlines the OECD evidence that trade unions can benefit from.
Labour’s position on collective bargaining. The Labour Party has been criticised by unions for not backing recent and proposed strike action. However, at its conference last year, the party launched its Green Paper on Employment Rights which included a commitment to Fair Pay Agreements. It said it would "empower workers to act collectively through Fair Pay Agreements’ which would be negotiated ‘through sectoral collective bargaining – starting in the adult social care sector". The agreements would see government bring together worker and employer representatives from sectors to negotiate pay and conditions.
Corporate profiteering and the cost of living crisis. Unite’s Profiteering Commission have published their first report aiming “to uncover who has really profited from the Covid 19 pandemic and the inflationary pressures that have followed.” Their research accuses many FTSE 350 companies of price gouging and argues that profiteering is pushing a ‘second round’ of inflation.
Fiscal discipline and public sector pay restraint. Simon Clarke, Chief Secretary to the Treasury, said public sector workers should expect ~3% pay rises funded in last year’s spending review and urged unions not to “whip up a storm of resentment and anger about something which is frankly a matter of fairly fundamental economic good sense”.
Inflation and Brexit. Bloomberg reports that the UK will be affected by higher than normal inflation because of immigration controls and supply chain disruptions exacerbated by Brexit, according to strategists at Wall Street’s top banks. Citigroup’s Vasileios Gkionakis said: “The economy is extremely fragile and in desperate need of more fiscal support, which is unlikely.”
Bankers’ bonus caps scrapped? A leaked letter from PM’s Chief of Staff Steve Barclay called on Chancellor Rishi Sunak to scrap the cap on bankers bonuses as part of a package of “deregulatory measures to reduce the overall burden on business” after Brexit. The government has since denied the rumours.
‘Growth’ over ‘competitiveness’. The Treasury Select Committee has recently published a report warning against the pursuit of international competitiveness for the UK’s financial regulators and called for a new secondary objective that promotes long-term economic growth. A cross-party group of MPs has set up a subcommittee to scrutinise further moves to deregulate the financial sector after Brexit. (For more on the Government's financial regulation agenda, read our previous digest.)
Political pressure for fiscal expansion. Both major parties are reportedly being pressured for more active use of fiscal policy to stimulate economic growth as fears of long-term stagflation mount.
Taxing wealth without reducing economic growth. Economists Linus Mattauch, David Klenert, Joseph Stiglitz and Ottmar Edenhofer have published a paper showing how governments can tax wealth to fund public investment and reduce wealth inequality, without compromising economic growth.
Treasury vs BEIS. The Institute for Government’s Tom Sasse took a deep dive into the relationship between the Department for Business, Energy and Industrial Strategy and the Treasury for Politics Home. Sasse posits Rishi Sunak’s ‘Treasury Brain’ - “a rigid short-termism that acts as a dead hand on the aspirations of anyone in government who thinks they can make things better” - against Kwasi Kwarten’s ‘newfound pragmatism’. He argues that the cost of living crisis, and particularly the rise in energy bills, has “tested the Treasury’s approach to breaking point”.
A global energy price cap? Leaders of the world's largest economies discussed the ‘feasibility’ of introducing temporary price caps on energy imports at the G7 this week, in an attempt to reduce Russian hydrocarbon revenues and minimise the effects of energy price inflation.
Winter fuel crisis. The International Energy Agency’s Fatih Birol has warned that Europe should immediately prepare for a complete severance of Russian gas exports this winter and urged governments to cut energy demand and “mobilise major funds to create a clean energy transition” to avoid volatile energy prices. Germany’s economic ministry is considering rationing gas to smooth over supply shortages. (OpenDemocracy’s Laura Basu explains how the UK already rations energy through prices and makes the case for an alternative way of rationing energy “carried out in the context of radical equality”.)
UK Infrastructure Bank, clean energy and energy efficiency. The UK Infrastructure Bank published its Strategic Plan which included £22bn investment in clean energy. The plan stated objectives to “look to finance both local authority and private investment in urban heat networks” and “explore how we can finance local authority and private projects, including pilots, that will accelerate the deployment of energy efficiency measures.”
Green industrial strategy in the US. Earlier this month the Whitehouse invoked the Defence Production Act (DPA) to give President Biden emergency economic planning powers to drive the domestic production of critical clean energy supply and energy demand reduction. The announcement includes new Federal procurement actions to stimulate demand for US-made solar panel parts, building insulation, heat pumps and more.
Empty promises make the case for stronger climate action. New York Times writer David Wallace-Wells provides an update of greenwashing from corporations and state governments as C02 emissions continue to rise. Key points from his ‘thread on climate hypocrisy’: A global review of net-zero pledges by corporations found that half of them have not developed a plan to deliver emissions reductions. Similarly, no single country is on track for emissions reduction in line with a 1.5 degree target enshrined in the Paris Agreement.
Economic implications of Roe v Wade. After the Supreme Court overturned the Roe v. Wade case which may lead to a ban abortion in many US states, the New Yorker’s Sheelah Kolhatkar explained the ‘devastating economic impacts’ of an abortion ban. Economist Caitlin Myers convened 154 fellow economists to file a brief outlining decades of research on how unwanted pregnancies affect women’s education, employment, earnings and the labour market more broadly.
Regional devolution and Whitehall’s fiscal micromanagement. A new paper from Onward, endorsed by a cross-party coalition of regional mayors, sets out the problems with England’s over-centralised system and makes 25 recommendations for reforming the funding settlement for regional government, including calling on the Treasury to hand mayors control of 1p in every £1 raised from income tax in their areas.
Worker-owned business in Wales. CLES have published a policy report outlining a plan to support worker buy-outs and expand employee ownership in Wales. The report argues that “The benefits generated by employee ownership directly address the most pressing challenges in the Welsh economy...democratising ownership for all should be an objective that underpins the Welsh government’s foundational economy approach.”