Business groups have warned David Cameron that he cannot expect companies to automatically raise wages to compensate for cuts in tax credits that are likely to be unveiled in the summer budget.
Industry organisations, including the British Chamber of Commerce (BCC) and Institute of Directors (IoD), spoke out after Cameron gave a speech criticising what he claimed was a “welfare merry-go-round” and suggested higher pay should replace tax credits.
There has been speculation that Downing Street could unveil a plan to encourage companies to pay their workers more at the same time as the government announces £12bn of welfare cuts, including reductions to tax credits, next month.
Steve Hilton, Cameron’s former adviser, claimed in a Daily Mail article this week that it was a “complete travesty” that giant retailers like Tesco and Sainsbury’s are making billions of pounds in profits while they are “subsidised by the taxpayer so they can pay their workers a pittance”.
With a general election looming ever larger on the political horizon, the main parties are now unveiling the policies they think will secure them victory.
The economy, immigration and benefits are among the battlegrounds which they will be fighting over in the next four months.
Another is the heavily unionised public sector which has undergone swingeing cuts since the Coalition Government came to office in May 2010 and historically has been the favoured whipping boy of the Tory party.
And so when David Cameron’s party revealed plans to make it harder to call strikes in certain “core” public services if it wins the general election, it came as no surprise.
A policy along those lines, after all, was floated last year by Minister for the Cabinet Office and Paymaster general Francis Maude.
There was also no surprise in its backing by the employers organisations the CBI and the British Chamber of Commerce, or in its universal condemnation by members of the TUC.
Yet, while certain sections of the media need no invitation to attack the public sector, and its day of action last year caused discomfort and annoyance amongst the public – not least the sight of rubbish piling high in places like Newcastle – it is still a risky strategy.
For a start, it opens the Government up to accusations of hypocrisy and double standards.
After all, the present Coalition Government is made up of the Lib Dems and Tories who between them received 38% of the total number of the UK’s eligible voters – 18m out of 45.5m – and below the 40% threshold it wants to demand of the public sector it is targeting. The Tory share of this was 23%.
In her heyday , Margaret Thatcher won around 30% of the total available vote and, during the present parliament, the Tories voted down a Lib Dem motion to introduced an alternative voting scheme which arguably would have made parliament more representative of the people’s views.
Meanwhile, GMB general secretary Paul Kenny also got his calculator out to further hammer home the point. He said:
“Only 16 out of 650 elected Members of Parliament secured the support of 40% of those entitled to vote in their parliamentary constituency area election in 2010.
“Only 15 Tory MPs out of 303 secured that level of support. They had no hesitation in forming a government in 2010 without securing 40% support from the electorate.”
Another point is that, particularly in the North East, the public sector which employs many in the region, is not as hated as the Tories might think. So such a policy strategy could be a vote loser here.
Gill Hale, regional secretary of Unison in the North East, said:
“They are the anti-public sector party – you only have to see what they are doing to the NHS and what they have already done to local government.
“Industrial action is taken as a last resort, and when we’ve had to take it we’ve had very good public support. I don’t think it will be a vote winner.”
Meanwhile comments by Liberal Democrat Business Secretary Vince Cable, in which he denounced the plans as “brutal” and “ill-conceived”, echo those of Ms Hale.
He said the Conservative proposals were “entirely ideologically-led and a brutal attempt to strangle the basic rights of working people in this country”.
Mr Cable added that a 40% threshold would be “odd”, when MPs do not have to overcome such a high hurdle to be elected.
Under the plans, a strike affecting health, transport, fire services or schools would need the backing of 40% of eligible union members.
Currently, a strike is valid if backed by a simple majority of those balloted.
Frances O’Grady, general secretary of the TUC says the Conservatives’ proposals would have “profound implications” for civil liberties.
They would also end a ban on using agency staff to cover for striking workers, impose a three-month time limit after a ballot for action to take place and curbs on picketing.
The package of measures will feature in the party’s manifesto for May’s general election.
In explaining the plan, Transport Secretary Patrick McLoughlin said a planned London bus strike set to take place on Tuesday had only been voted for by 16% of people entitled to take part in the ballot, and called the walk-out “ridiculous”.
“I think before a strike is allowed to go ahead it must havemuch more support from the union members and cannot be called by politicised union leaders,” he said.
But Ms O’Grady said that participation in strike ballots and other types of vote should be improved by introducing online voting, in “safe and secure balloting”.
At the moment, strikes can only be called based on the results of a postal ballot – which “don’t do the job”, Ms O’Grady added.
She said the government “continues to oppose this proposition”, although Mr McLoughlin replied he would be willing to talk “in more detail” about such proposals.
However, his partner in the Coalition Government, Mr Cable, goes further.
He said: “If there is to be trade union reform, it should be to allow electronic voting in ballots which would improve the turnout and legitimacy of polls.”
Unite general secretary Len McCluskey said the Conservative Party’s proposed changes would have a “chilling” effect, and added the way to “resolve disputes was through negotiations – not to intimidate and silence by legislation”.
Ministers have repeatedly clashed with trade unions over pay – with a 1% cap on increases in the public sector – as well as changes to pensions and retirement ages.
It was during the day of action last summer when hundreds of thousands of public sector workers took part in a day of strike action across the UK, that Prime Minister David Cameron said it was “time to legislate”.
But Ms Hale added:
“We already have some of the most draconian laws in Europe regarding industrial action. There are so many obstacles we have to get over.”
However, Mr McLoughlin said:
“It is wrong that politicised union leaders can hold the country to ransom with demands that only a small percentage of their members voted for. That causes misery to millions of people; and it costs our economy too.”
He said the changes, which would be introduced in the first session of a Conservative-led Parliament, would “increase the legitimacy” of strike action held by unions.
“It is only fair that the rights of unions are balanced with the rights of hard-working taxpayers who rely on key public services.”
CBI deputy director general Katja Hall commented:
“Strikes should always be the result of a clear, positive decision by those balloted. The introduction of a threshold is an important – but fair – step to rebalance the interests of employers, employees, the public and the rights of trade unions.”
However, the TUC has previously said imposing a minimum turnout would leave unions with “about as much power as Oliver Twist”.
Labour criticised those plans as “desperate stuff”.
Unison general secretary Dave Prentis said the proposed measures would make it virtually impossible for anyone in the public sector to go on strike and would shift the balance completely in favour of the government and employers, and away from dedicated public servants.
He said: “The UK already has tough laws on strikes – there is no need to make them stricter still.”
But John Longworth, director general of the British Chambers of Commerce, said: “In the eyes of businesses large and small, these proposals have merit, as they would help ensure essential services and the freedom to work in the event of strike action.”
Source – Newcastle Journal, 12 Jan 2015