Britain needs radical economic change. Three decades of free-market fundamentalism have failed ordinary working people and created an economy that is unfair, unstable and unsustainable. You only have to look at the so-called recovery to see how lopsided the UK economy has become. It’s been great for the Square Mile and the super rich – but the rest of us have been left behind.
The TUC believes we need rebalancing in its most meaningful sense. While we need rebalancing in terms of regions and sectors, we also need rebalancing in terms of capital and labour. Never has there been more need for a level playing field between business and unions, between top bosses and ordinary workers.
We need a new economy that works for all, not just a small elite – fairer, greener, stronger to meet the profound challenges posed by climate change, globalisation and technological change.
Firstly, rebalancing demands a smart, active state. Letting markets rip has given us the worst crash since the Great Depression, the longest squeeze on living standards since Victorian times, and the worst inequality in over a century. We can’t rely on more of the same to get us out of our current mess; business and bonuses as usual is not an option.
That’s why government has to roll up its sleeves and play a strategic role to shape the economy; encouraging the creation of good, skilled jobs; ensuring that everyone shares in the proceeds of growth. And that process must begin with an intelligent industrial strategy – a joined-up set of policies taking in research and development, regional development, vocational education and support for strategically important sectors. A new State Investment Bank can provide the financing required to rebuild our manufacturing strength, helping us move from financial engineering to real engineering.
Secondly, when it comes to decarbonising our economy, we need to be much more ambitious. If we get our approach right, we can deliver a just transition to a low carbon future – providing those good green jobs in the regions that need them most.
The good news is that Britain has the potential to lead the world in sectors such as electric vehicles, carbon capture and storage and renewables. With policy certainty, investment and leadership from government, green growth can be a reality. In Hull, for example, there is real optimism about the decision by Siemens to manufacture wind turbines in the docks – known as Green Port Hull. In a city blighted by high unemployment and industrial decline, this is a hugely important step forward.
Thirdly, a future Labour government needs to ally with trade unions to shift the balance of economic power at work. Shadow business secretary Chuka Umunna said in his speech to the TUC Congress, we need a pro-worker as well as a pro-business agenda in Britain. But good employers are being undercut by the bad who are driving down pay and therefore demand. Labour values demand a fairer distribution of the wealth we all produce and a stronger voice for workers whose livelihoods depend on long term success. The case for worker representation on company remuneration committees and boards is compelling.
Unions can also help drive low-carbon growth. Whether it’s through our work with the energy intensive industries or our green workplaces projects – making a difference in 1,200 offices and factories across the country – we have a critical role to play. The TUC welcomes the Fabian Society’s recent report “Pride of Place” – about how we rebuild green community activism – which resonates strongly with what we’re doing in the workplace.
Rebalancing our economy is natural territory for Labour. It’s progressive, it demands intervention, and it’s about social, economic and environmental justice. Only by restoring faith in the power of collective action will we be able to build a low-carbon future that is fair for all.
Frances O’Grady is general secretary of the TUC. She spoke at the Fabian Fringe event ‘Building a new economy’ at Labour party conference.