IF THE Prime Minister’s words to Labour’s National Executive Committee this week are to be taken at face value, an important change in the direction of Government policy is about to take place.
Thus far in the Government’s fightback against recession, the vast bulk of assistance has gone to the banks, firstly to salvage the financial system from total collapse and then, ostensibly at least, to benefit the customer-on-the-street by freeing up credit. The public’s growing perception that this has not worked in practice and that the banks are failing to deliver is reflected in Gordon Brown’s poll ratings as day after day thousands more redundancies are announced.
The grubby scramble by bank bosses to pay themselves fat bonuses before things got too bad serves to underline the perception referred to by B Michael James on page 18 that the rich get the pleasure and the poor get the blame. The 2,500 Corus workers took the blame by losing their jobs this week, on the day the company announced that this and a package of other measures, including wage cuts, would improve profits by more than £200 million. The Government’s scheme to help the automotive industry was disappointing in scale from a Government whose Treasury is increasingly reluctant to come to the rescue and a Chancellor, like the rest of us, who is wondering where it will all end.
Mr Brown may not know the answer to that question either. But he at least appears to be preparing a plan for the next phase of the fight. In answers to questions from members of the NEC about the economic situation, Mr Brown indicated positive Government support for two major initiatives: encouraging councils to grant mortgages (a move which would follow the decision to allow local authorities to use rental revenue from new-build council housing); and to consider the implementation of a scheme to prevent redundancies in companies caught in the downturn.
Every single redundancy carries the prospect of economic, social, familial and personal tragedy, the wrecking of lives. A policy to conserve jobs aims directly at the people who are most harshly threatened by the economic crash, and it does not require dilatory bankers to get off their fat behinds before it can work. In his remarks on Tuesday, Mr Brown said that, unlike the Tories, it was Labour’s duty to “use the state to the benefit of ordinary people”. Council-funded mortgages and intervention to prevent redundancies are two of a raft of measures being prepared to meet this challenge.
The model being studied is one already in use in Germany and Holland, in which the government pays up to 70 per cent of the wages of workers if a company commits to training rather than sacking them. The workers stay in the workplace, with upgraded skills, benefiting the company when the economic turnaround comes and governments save on the higher cost of welfare payments. But time is running out for workers who finds themselves shunted into the jobs desert that is the current work market. The difference between Holland and Britain is that the Dutch government took up the scheme two months after it was proposed. If Mr Brown’s words are to mean the Government is serious about addressing the scale of the problem it has to move fast.
It is not just a problem of today but of tomorrow and tomorrow’s generation.
Young people and women are being hit disproportionately according to latest studies of the labour market and the social consequences potentially immense. Yet, if this rallying cry to deploy the state in the interests of “ordinary people” is to have any significant meaning, Mr Brown and his ministers will have to wrench themselves away from their addiction to the supremacy of the free market.
The Government simply cannot have it both ways. And if it realises this, that is the message its representatives should have taken to the annual jamboree of masters of the universe in Davos, more accurately the gathering of the guilty men. In a mood of mild shame, rather than abject contrition, the controllers of capitalism are spinning this year’s meeting as the return of the state. Davos is presumably an irony-free zone.
