The government’s latest attack on jobs announced today, cutting the period before major redundancies can take place from 90 to 45 days and excluding fixed-term contracts from collective redundancy agreements when they end, is yet another gratuitous swipe at employment rights with callous disregard of the real needs of industry for growth. It will not create a single new job or make an iota of contribution towards recovery. It is extraordinary that at a time of deep and prolonged recession the government is still concerned to push its anti-union vitriol to the uttermost limit while shifting not a jot from its suicidal economic policy which none of its supporters – neither the IMF, OECD, Federation of European Employers nor the CBI, Chambers of Commerce or Federation of Small Businesses – believe offers any remotely plausible scenario for recovery. This is a modern version of Nero indulging his whims while Rome burns.
But why is Labour saying so little about the state of the country as industry bleeds? The dogma is still to rely on inward investment as the means to recovery, yet that is typical of semi-developed economies. Scrambling after footloose investment by foreign multi-nationals is a sign of surrender, not of strength. The industrial situation is so dire that it screams out for a major change of direction, but Labour remains mute. It is hard to believe now that in 1960 Britain had the third largest economy in the Western world after the USA and USSR. The bland complacency of the Tory ‘never had it so good’ dominance gave way to the first attempts to repair the damage with the ‘white heat of the technological revolution’ which was itself upended by the balance of payments crisis and devaluation of 1966-7.
Then the bi-partisan period of Blatcherism 1979-2007 sealed the fate of British manufacturing, sacrificed on the altar of Ricardian trade theory. The idea was that because Britain had a comparative advantage in finance and banking, the economy was best served by specialising in that sector. Industrial strategy was abandoned and swathes of British industry were sold off in huge car boot auctions to foreign buyers. The ultimate point has now been reached where either there is an emergency programme of deep radical change or the decline becomes irreversible.
The choice now being presented is either an ultra free-market Hong Kong offshore trading entrepot or a national social democratic programme not unlike that adopted by the Asian tigers in the 1960s. The constraint however is that Britain is a de facto client state of the US, the City of London is a satellite of Wall Street (even described as a US financial Guantanamo), and is the world capital of money laundering. The axis of evil from lower Manhattan to Canary Wharf will strain every muscle to obstruct change. So what would Labour do? Will it be tough enough to confront the agents of slow asphyxiation or will it throw in its lot with those forces and play along with terminal decline?