'This year will be defined by political choices'

Unite GS Sharon Graham: investment - not austerity and pay cuts - only way to fix broken economy

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This year will be another defined by the political choices we make. With the severity of our predicament becoming ever clearer, the only difference will be the importance of the decisions being taken.

If Britain were a hospital patient most doctors would mark us down as being in a “bad way”, our recovery touch and go. But the anaemic position we find ourselves in is not down to some unassailable global force rammed up against us. It is down to our actions. Things we have done.

This year has the potential to be a break point. Do we choose change? Or continue along the path of managed decline? We face a multitude of dependent challenges. From degenerative levels of inequality to the lowest level of investment in the G7, to shrinking productive capacity, crumbling public infrastructure and a complete lack of economic planning. All ingredients which, when mixed together, deliver the same dish: decline.

Up until this point, generations of parents in industrialised Britain could aspire to the same thing: that their children would go on to have longer and more prosperous lives than them. Not now. Inequality is growing. The wealth of the top 0.1% has almost tripled since the 1980s. Wages in real terms are lower now than they were in 1997. Our public services are being hammered. All while private monopolies and oligopolies cash in at our expense. Energy firms, banks and many more are profiteering on the back of war and a cost of living crisis.

Something is broken. But our political classes are in danger of missing the point. In place of change, many simply offer more of the same or tinker at the edges. There is more political arm-wrestling than substance. Fixating on the fate of small boats or debt ceilings is not going to fix a broken economy. We are going to need more than building inspectors and arbitrary fiscal rules.

We need to modernise the system itself, to change the culture and purpose of government. That is what delivering different outcomes will require. Anything less, and we risk descending further into squalid politics. We’ll just be throwing sand in each other’s eyes while standards continue to decline.

Two of the main victims of generations of largely vacuous political leadership have been critical thinking and effective planning. That has led to a fog of false perception. Neoliberalism, victorious in the 1980s, still reigns supreme in the UK today. No alternative is even considered, no matter the results.

The fact that we are now curiously out of step with our increasingly interventionist US and EU counterparts seems to matter not one jot. Nor do the increasingly obvious failures of the British politicians’ approach. Phoney fiscal rules and high growth fantasies persist like rocks that are impervious to the weather.

The deregulation and privatisation free-for-all has ultimately led to little more than a hollowed-out, growth-free economy and an unequal, increasingly fractious society. The system now needs to adapt. We need to change.

That is why we want to see political slogans replaced by critical analysis and policymaking that is truly modernising. We want to see investment and economic security take centre stage, not debt reduction and laissez-faire. We want to see redistribution and collective bargaining take the place of austerity and pay cuts. We want reform. Not for the City of London, but for workers and their families.

Between 1970 and 1990, UK annual investment rates averaged 23.7% of GDP. This has now fallen to an average of just 17.9%. At the same time, dividends for shareholders have risen. The choices we made have led to perverse outcomes. Profits for shareholders over jobs for workers. It’s time to prioritise people.

One example. Our steel industry is now on the verge of collapse, putting thousands of jobs at risk. Serious investment of £12bn over the next decade would revolutionise the industry and would repay itself. We could double capacity to create a world leader in green steel production, safeguarding jobs and creating thousands of new opportunities in red wall communities. It’s the type of investment in a critical industry we will need if we are remotely serious about rebuilding Britain. During the 2008 crash, our politicians did not hesitate to spray the banks with our cash like confetti at a wedding. Public investment is possible; it’s just a choice.

But we also need security to go together with investment. Cash without fixed return or guarantee doesn’t work. Instead, as in other countries, we could take a stake in our critical industries at a time when geopolitical tensions are rising. Whether that be in UK steel, which is currently dominated by two firms headquartered in China and India, or in sectors such as energy, whose private interests helped drive the scandalous price hikes that supercharged inflation.

Like it or not, across the world different forms of public intervention are likely to be the new normal, not least because the imminent impact of decarbonisation and automation will exacerbate current problems. And it won’t just be from inside government that change will come.

Since I was elected, at Unite we have put more than £430m into our members’ pockets as a result of successful disputes. We’re taking practical action to safeguard living standards.

Whatever happens next, all of us – including our politicians – will need to do more than watch from the sidelines. For all of our sakes, let’s hope that some different choices are finally made.

By Sharon Graham, Unite general secretary