Frances O’Grady: Brexit – the TUC view
Frances O’Grady is the General Secretary of the British Trades Union Congress (TUC), the first woman to hold the position. She has been a member of the Resolution Foundation’s Commission on Living Standards, as well as serving on the TUC’s Commission on Vulnerable Employment, the Low Pay Commission and the High Pay Commission. She has campaigned prominently during the referendum on EU membership.
Should we stay or should we go? Britain and Europe – the TUC view
18 March 2016
It’s good to be at Hertford College this evening. And to talk about one of the most important issues facing the UK people in a generation: the referendum on membership of the European Union.
I grew up in Oxford, so I was living here the last time we had a referendum back in 1975. Only then, of course, it was called the EEC, the European Economic Community. My dad worked at Cowley and was a shop steward there. He was anti the EEC because he did not believe that what was good for business automatically trickled down into benefits for workers. In fact, as I remember he put a sticker on his moped that read ‘No to the rich man’s club’. At the time, that was a sentiment expressed not just by my dad, but by his union and the TUC.
I was too young to vote but during the course of the campaign, I came across something that caught my eye. It was an old photograph of women workers on strike, I think in Belgium. They were carrying placards saying ‘Give us Article 119’. They were appealing directly under the Treaty of Rome for equal pay for work of equal value – a principle enshrined in the Treaty. Remember, that 1975 referendum was only a few years after the Ford Dagenham sewing machinists had been on strike for equal pay. That strike, together with the Labour government’s anticipation of membership of the EEC, had prompted Barbara Castle to introduce the Equal Pay Act of 1970. But – as the TUC pointed out at the time – the UK’s Equal Pay Act fell far short of what was promised under the Treaty of Rome. The same was true elsewhere. And here were trade union women, in another country, going over the heads of their own government to demand justice. Now this was interesting. Here was some hope that by combining our strength across Europe, working people – in this case, working women – could win something better.
So while my dad put his sticker on his moped, I put a different sticker on my bike. Some of you may remember the hand grasping a red rose.
Of course, Britain has changed radically since the much maligned 1970s – Britain’s happiest and most equal decade. The world has changed. And so has the European Union – more of which, later.
But the decision we are being asked to make is the same. In or out. Remain or Leave.
Or, as EU council president Donald Tusk put it, to be or not to be together. He paraphrased Shakespeare. But I’ve chosen to quote a great lyrical talent of another era, the Clash: should we stay or should we go?
And the argument I want to put is straightforward.
For all the weakening of the EU social model, for all the urgent need for reform, a Brexit would pose a real threat to working people.
Not just for our jobs, not just for investment, but for our rights too. Rights which make all our working lives, and our lives in general, appreciably better.
I want to focus on three key areas. First, why it’s absolutely essential that the voice of workers is heard in the referendum campaign. Second, the risks working people face if we leave. And third, why Europe needs a new and stronger social dimension, fit for the twenty-first century. Because, believe you me, giving people a stake – giving them something worth voting for – is ultimately the best way to secure the long-term future of the EU.
Before all that, I want to put this discussion in a bit of context. Make no mistake, the outcome of the vote will mould our country for a generation to come. It will influence our politics. Shape our economy. And define our values as a society. This at a time when Europe is under pressure. Anaemic growth and continuing tensions within the Eurozone. The rise of extreme inequality globally, nationalism, racism and the far Right. And the unfolding refugee crisis, which some say poses the biggest challenge to the continent since the end of World War Two.
At a time when, in or out, we face such global challenges, Britain could soon vote to go it alone. Or should I say, England could? Because this is a gamble not just on EU membership but on the fabric of the UK. The SNP has put its cards on the table on yet another referendum, notwithstanding the oil price crash. Wales is watching closely. But perhaps less attention has been paid to Northern Ireland where the possibility of a Leave vote not only threatens its fragile economy. It is politically dangerous too. A Brexit presents the prospect of border controls with the South. In this year of all anniversary years, this is not an attractive prospect for the Republican community. The potential for destabilisation of the peace process is one that the current Northern Ireland minister seems impervious to. But in the view of the Irish and British trade union movements, it is one that should be taken seriously.
And all that begs the question: how on earth have we got here? Of course, the prime minister’s decision to hold a referendum owed as much to internal Conservative party management as it did to national interest. David Cameron famously promised to ‘stop banging on about Europe’. But instead, in recent months, he has banged on about little else. And all to indulge his right flank. In fact, Cameron wanted to throw even more red meat to his true blues. Towards the end of last year, trade unions fought a fierce rearguard action against the prime minister’s plans to include employment rights in his re-negotiation package. Thanks to great lobbying by our sister unions across Europe, other EU governments kept the PM’s bid to worsen workers’ rights off the agenda. While ministers will still be able to apply an ‘emergency brake’ on migrant benefits – a strange logic unless you believe low pay is best dealt with by punishing its victims rather than those who profit from it – the deal on offer could have been much worse. The hostile reaction from the Conservative eurosceptics and right-wing press perhaps tells you all you need to know about the actual scale of the re-negotiation.
Where are working people’s voices in this campaign?
Now the spotlight has inevitably shifted to the campaign itself. And this takes me straight onto my first argument:
It’s crucial that the voice of working people gets a proper hearing in the run up to the referendum.
Think about the debate we’re having at the moment. On the one hand, we have an ‘out’ campaign now fronted by Boris Johnson and comprised largely of Conservative eurosceptics and UKIP. With George Galloway putting in a surprise appearance alongside Nigel Farage for good measure. Funded by hedge funds, its dominant interests lie in financial deregulation, greater freedoms for business, and US-style labour market flexibility.
On the other hand, we have an ‘in’ campaign fronted by David Cameron and part funded by American banks. Dominated by big business, its focus is on competition, free trade and free markets.
From a worker’s perspective, spot the difference. The clash of two old Etonian egos may entertain some. But it risks alienating many. Other than from unions, we’ve heard little from either camp about what all this means for the real lives of working people. David Cameron, George Osborne, Stuart Rose, Boris Johnson, Michael Gove, Nigel Farage – regardless of which side we’re on, we’ve got too many public schoolboys and too few women, too few workers.
The ‘remain’ campaign needs to understand this. A campaign led by business leaders – talking about what’s best for them – will merely confirm public suspicions that powerful elites are conspiring to keep us in the EU. So far, most ordinary people are not engaging with the arguments, and the debate frankly has little to do with their everyday lives. A big mistake, given it’s the votes of ordinary working people that will decide the outcome of the referendum – not the City and not the CBI.
Over the coming weeks and months, the TUC will do our best to ensure the interests of workers shape the debate. And we’ll be taking on those who cynically use workers’ anger and fear about globalisation when they don’t really have those workers’ best interests at heart.
Take migration, one of the hot issues in the referendum. Many working people are worried about migration. They worry about the impact on wages, on jobs, on their communities. Many workers feel they’ve been shafted. They don’t know whether to blame the bankers, the boss, Westminster or Brussels. But they know they’ve been shafted. Wages are still stagnating. Job quality and security has got worse. And unemployment is still far too high in some regions and especially among the young. And local services are under pressure. The NHS is under strain. Class sizes are too big. And there is nowhere near enough decent housing.
People are right to worry about these problems. And they are right to demand solutions. Now, Nigel Farage says free movement is terrible and if we stop it, all workers’ problems will be solved. And Stuart Rose’s response? He says that free movement is great because it keeps workers’ wages down. Not exactly the brightest argument if you want to win workers’ votes. The TUC argues that migrant workers aren’t the enemy. Exploitation is. And we need politicians and business leaders to step up to the plate and deal with it. We need them to understand that the best way to create jobs is to invest. That the best way to relieve pressure on hospitals, schools and housing is to stop cutting and start building. That the best way to combat pay undercutting is to get tough on bad bosses and get them to pay the rate for the job. And that using the Trade Union Bill to attack unions – people’s best chance of getting a pay rise and fair treatment at work – is a funny way of going about it.
In practical policy terms, that means stronger rules on so-called posted workers. It means closing the loopholes in the rules on agency workers and tougher enforcement of the minimum wage. And it means cracking down on abusive zero hours contracts which now cover almost a million workers. We want flexibility for mums and dads, for students, for people who have to care for older relatives – not flexibility for the boss to recreate the casual labour of the docks. But ultimately it means revitalising and extending collective bargaining as the best way to address the growing imbalance of income, wealth and power in our economy, not just here in the UK but across Europe.
Of course, all this is heresy to those who want to scrap European Union rules in the workplace and find it convenient to turn the fire of post-crash public anger on the poor and migrants. The point is this: freedom of movement does not have to mean a race to the bottom which pits low-paid workers against one another. Any more than women joining the workforce necessarily has to drag down wages either. There will always be employers who want to drive down the price of labour. The real challenge to politicians across Europe is to ensure everyone gets a fair day’s pay. Because nor should people feel they have no choice but to leave their home countries as the only way to give their families a better life. What all workers want from Europe is decent jobs and wages, fairness at work and sustainable growth.
What would Brexit mean for workers’ jobs and rights?
And this takes me onto my second point:
I believe a ‘leave’ vote carries with it significant risks for workers and the balance of power at work.
Let me start with the macroeconomic picture. We are told that a Brexit could lead to between three and four million jobs lost. Now I take some of those figures on potential job losses with a pinch of salt. But what I am clear about is that many good jobs would go. And, more to the point, that those good jobs are likely to be replaced by worse ones, accelerating the hollowing out of the labour market we are already suffering from. Almost half of our exports go to the EU, which accounts for seven of our ten largest trading partners. And half of foreign direct investment depends on Europe. Without access to a market of 400 million people, global firms would be more reluctant to invest in a UK outside of the EU.
This isn’t something just for business to worry about; it matters to unions and workers too. And it’s sectors like high value manufacturing where the risk is greatest. Think about what might happen just two miles east of here at BMW’s mini plant in Cowley. At a time when the car industry is propping up our woeful exports record almost single handedly. It’s a great business with a great union that I visited just last year. A high-tech, high-productivity, high-skill firm which provides good jobs, good wages and world-class apprenticeships.
But earlier this month, BMW – which directly employs 8,000 workers in the UK – warned that Brexit could affect the firm’s ‘employment base’ in this country. The company’s statement that it derives ‘significant benefits’ from our membership of the EU chimes with what others have said. Nissan, Siemens, GM, Ford, Toyota, BT, Vodafone, M&S – all have said the same. And I don’t think they’re all bluffing.
But just as much as jobs and investment, we need to talk about workers’ rights. Because Brexit would potentially mean kissing goodbye to so many of the rights working people take for granted. Rights which are hugely popular. Like maternity rights which give pregnant women the right to paid time off for ante-natal appointments. Help for working parents which gives them time off to look after a child. Redundancy consultation which gives unions vital time and space to put forward alternatives. Information and consultation rights which give factory and office workers more of a say in shaping their workplaces and working lives. Health and safety protection which can quite literally be the difference between life and death. Stronger anti-discrimination protections which give women, black people and others recourse against bad bosses and bigots. Stronger protections for outsourced workers which ensure their contractual entitlements transfer to the new employer. And equal treatment for part-timers, temps and agency workers which give the growing precariat a measure of decency and dignity in their working lives.
These rights weren’t gifted by Brussels bureaucrats, as eurosceptics argue. They were fought for by trade unionists in Britain and the rest of Europe. But they wouldn’t have happened without our membership of the EU. Dismissed as Brussels red tape by some, these rights have undeniably made working life safer, better and fairer for many.
Take the Working Time Directive. As well as putting a brake on Britain’s long hours disease – something that has long undermined productivity – it’s improved paid holidays for huge swathes of the workforce. Six million workers have more generous holidays as a result. And when the Directive came into force in 1998, two million workers enjoyed paid holidays for the first time ever. Try telling them the Directive is a burden on business. Try telling them their well-earned summer holiday isn’t guaranteed. A leave vote will put all these rights at risk.
Ultimately, the Brexit camp has to answer the question: if we left the EU, can they guarantee that the conservative government will keep and protect those employment rights?
I think I know the answer: not a chance. And it’s not just the low-paid farm labourer, the new starter sacked without reason and the pregnant woman facing discrimination who would lose out. As trade unions know only too well, the loss of any right has an impact on everyone. If the government chooses not keep a right, or maybe just water it down, and a bad employer takes advantage, then over time all workers will feel the consequences. These rights are the foundations that unions collective agreements are built on. Many of our agreements provide much better rights. But pull the rug from beneath them and it won’t be long before those agreements fall down. Despite all of this, and despite the many rights working people have gained, Europe has always been a source of vigorous discussion within the trade union and labour movement. That debate is continuing now among our activists. And frankly a rallying call to get behind the prime minister in the referendum isn’t exactly one that will enthuse them.
A new Europe
So this takes me to my third point:
We must make the case for a new Europe with social solidarity at its heart.
The choice doesn’t have to be ‘in with Cameron’ or ‘out with Farage’. And it’s worth remembering the historical context. The TUC only embraced Europe in 1988 when Commission President Jacques Delors famously addressed the TUC Congress in Bournemouth. He made the argument that a single market for business must be balanced with a strong social dimension – voice, rights and protection. A trade union movement battered and bruised by Thatcherism knew a good deal when it saw one. As Delors told delegates: ‘It is impossible to build Europe on only deregulation…the internal market should be designed to benefit each and every citizen of the community. It is therefore necessary to improve workers’ living and working conditions, and to provide better protection for their health and safety at work…Europe needs you.’ As a performance, it was a tour de force. In fact delegates were so impressed they burst into a rendition of ‘Frere Jacques’. But the bargain that Delors promoted so persuasively – a Europe that balanced the interests of business and employers on the one hand, and workers and citizens on the other – has begun to unravel.
Trade unions have become increasingly alarmed at the EU’s direction of travel over the past decade. The post-Lisbon agenda has been one of deregulation, liberalisation and privatisation. Advancing workers’ rights has too often taken a back seat to business freedoms, and collective bargaining has come under attack. And there’s been real anger at the harsh austerity programmes foisted on the programme countries by the unholy trinity of the EU Commission, ECB and IMF. In the case of our nearest neighbour Ireland, social partnership was destroyed and restructuring was forced through almost entirely on the back of Irish workers’ wages. Meanwhile trade deals such as the Transatlantic Trade and Investment Partnership or TTIP – which put the interests of multinationals ahead of those of democratically elected national governments – have provoked strong opposition.
Given all this, it’s little surprise that the European Union has become more unpopular than at any point in its history.
With the outcome of the referendum too close to call, the votes of trade union members could well have a significant bearing on the result. But to get them out to vote, the EU needs to offer more than just the defence of rights won in the last century. It needs to come up with a practical plan for this one.
The Remain campaign has warned people of what they stand to lose if they vote to leave. Pointing out what would happen to their jobs, their savings, their mortgage rates, and even – if sterling depreciates – their holiday money. Speculation about the impact on house prices certainly saw the solidly eurosceptic Daily Mail break into a sweat. From my perspective, I’ve argued that, even in its weakened state, the European model provides a better alternative to the extreme economic inequality of American or Russian capitalism; or the authoritarianism of China or Singapore. And that, as the pace of globalisation and financialization quickens, the idea of nation states going it alone on the basis that this will increase their bargaining power with the markets is patently delusional.
But while a campaign based on fear of a ‘leap into the dark’ may win the vote, like the Scottish independence referendum campaign, it risks losing people’s hearts.
Ultimately, Europe’s future success will rest on one thing and one thing alone: whether ordinary people can be convinced that the EU is on their side. That’s the message I gave to Commission President Jean Claude Juncker when I met him last month. Unless Europe reforms to put working people first, it is writing it’s own suicide note. You only have to look at the success of right wing nationalist parties for evidence of that. Almost four million votes won by UKIP at the general election. A record 30 per cent vote share won by the National Front in France. And the electoral success of hard-right parties in Hungary, Germany and elsewhere. So the TUC, just like our sister trade union movements on the continent, wants to see radical change. Rather than seeming subservient to the interests of global finance and large corporations – which are making our continent more divided and more unequal – we want an EU that delivers for ordinary working people.
As Jacques Delors said: ‘You can’t fall in love with a market’. If Europe’s leaders want to win popular support, then they have to put something on the table for workers.
I see three main pillars of a twenty-first social model.
A fairer, greener economy
Firstly, the EU needs to pursue a mission for fairer and greener growth, with good jobs at its heart, especially for our young people. The ETUC has produced some serious proposals for investment in pan European projects – transport, communications and renewables – that would help get us there. That requires new approaches to finance and to the financial sector. Fair taxes to fund big investment in infrastructure, that includes human infrastructure too, through publicly owned and accountable public services. And a strategy for innovation and technology to liberate working lives and boost livelihoods, not rob people of them.
New rights for a new era
Secondly, we need to rethink rights and protections in the new global gig economy. Britain is not alone in seeing a growing proportion of labour used, like production, on a just in time basis. Our twentieth century system of individual rights is failing to provide a fair deal for workers collectively. That balance of power must change. Delors promised that every worker would have the right to be protected by a collective agreement. It’s time for the EU to deliver.
And thirdly, economic democracy. For me, this was the most interesting and yet the least realised part of Delors speech. It is now more urgent than ever. At a time when most shares in Britain are held overseas and held for just a matter of months, the old model of shareholder supremacy must change. Workers on the board across Europe is not the whole story but it is one important chapter. It’s time to write it.
The TUC will continue to make the case for a positive, progressive Europe that meets the needs of working people regardless of which passport they hold. Yes the EU needs reform; just not David Cameron’s vision of it. But the realpolitik is this: we can only push for change from within. To stand a chance of shaping the future, it’s worth, to coin a phrase, sticking with the union.
I started with a question: should we stay or should we go? I’ll conclude by reversing the famous lyrics of the Clash.
If we stay there will be trouble. But if we go it will be double.