The social implications of bank branch closures
Mr Paul Snowball (UNiFI) moved the following motion:
(Take in Motion 33)
He said: What the banks are doing to local communities is nothing short of criminal. As more and more branches close that part of the bank which customers repeatedly say they like most is being denied them. Little consideration is given to the elderly and those who have to travel into the centre of towns by public transport. Not everyone is familiar with technology, and the Internet for many elderly people is something that happens to the young. Telephone and television banking are therefore still very much a minority sport. Whole communities relying on banks no longer seem to matter. It is a travesty so why is it happening?
The answer as with most things is greed, profit and, our usual target, shareholder dividends and share price maximisation. In the last five years Barclays has closed more than 300 branches and since 1990 has cut over 23,000 jobs, a quarter of its total workforce. Cuts in the branch network are set to continue as a result of the bank's latest re‑structuring programme, which groups branches into clusters and moves a number of managerial services from smaller offices to a central location.
Earlier this year at a stroke, Barclays closed seven branches on Merseyside. The impact on the local communities was devastating, particularly around the areas of Clubmoore and Tuebrook which drew their business from large council house estates. A number of pensioners also live in areas such as these, and will have to face travelling extensively to reach a Barclays branch. For customers in two of the branches the outlook is even bleaker, with the prospect of having to travel a total of five or six miles to reach the nearest branch.
The closure of Tuebrook and Clubmoore meant that more than 50,000 people were left with just one branch, the TSB, to provide their banking needs. In Europe, there are on average 1,100 customers for every bank branch. In Britain, after a decade of branch closures, that figure is 5,000. In Tuebrook and Clubmoore it is now ten times the U.K. average. Barclays stubbornly ignored a vigorous campaign against the closures, refusing to take note of the petitions and letters delivered by community leaders and residents, who one local vicar described as God's little people.
Although Barclays has so far refused to provide figures of the total number of jobs likely to be affected by a further planned reorganisation, UNiFI estimates that over half of the bank's operations and personal sector managers -- around 2,000 staff -- could loose their jobs. Barclays says the planned cuts are a necessary part of its on‑going restructuring programme, which aims to deliver an improved service to its customers, and ensure the bank's success and survival in an increasingly competitive financial services market.
Despite cuts in behind-the-scenes administration jobs, the bank argues that the changes will mean more staff will be dealing direct with customers. Barclays has said it will run a retraining programme for staff and will seek to reduce jobs by voluntary means. However, by downsizing to this extent Barclays is playing a dangerous game. Cutting staff and outlets will increase short-term profits but could seriously damage the bank's long-term future. Older more experienced staff are disappearing and customers are being left without local services.
Both UNiFI and BIFU believe the bank could best maximise its market share and generate long‑term profits by returning to its original management philosophy of providing customers with a quality service delivered by experienced, skilled staff at convenient outlets.
UNiFI calls on Congress to give its unequivocal support to our union and other affiliates in the finance sector to halt this culling of branches and thereby to free staff from the fear of jobs being lost as a direct result.
Mr Chris Edwards (Banking, Insurance and Finance Union) seconding the motion said: Financial exclusion affects individuals and communities alike. Possession of a bank account is increasingly important for receipt of salaries, pensions, benefits, as well as of course the payment of bills. When banks disappear in rural and urban areas, residents can be cut off from many of these financial services and savings opportunities.
Choice is not a great topic when you talk to the unemployed, those trapped in low pay or trapped in the downward spiral of debt. As banks move out in urban areas, loan sharks and debt collection agencies often take their place. They fuel exclusion and despair and destroy the fabric of an already disadvantaged area and disadvantaged citizens. They are left with so few choices in the financial market.
As I sat watching the yellow sub‑marine with my children at home, the Beatles fought the Blue Meanies. The labour Movement has fought and defeated its own version of the political Blue Meanies. Even after a long and unforeseen period of time in Pepperland, the joint symbols of selfishness and greed were crushed at the ballot box. Our submarine has surfaced victorious but it is now time to act to ensure the Blue Meanies or Meanies of any colour are kept at bay for many years to come.
However, it does seem that some foot soldiers of the Blue Meanies are now resurfacing as bank executives, in green wellies armed with pump action shot guns, with a smile on their face, blowing branches away with growing frequency and a glass of Pimms in their hand. It would appear little or no feeling is given for those discarded communities. They are the financial Meanies.
We have a solution, we have some solutions: credit unions. But when these come along we end up with Fred Goodwin who worked with Clydesdale and basically spent more time closing branches than he did opening them.
I now move straight to the fact that we are in a position where we must act against bank executives who deem people unsuitable, unprofitable, outside current criteria, too poor, too remote, worthless. We are not willing to let bank executives make those decisions. Comrades, please support this motion.
The President: The General Council support the motion.
* Motion 33 was CARRIED
Regulation and call centres
Mr Nick Roe (Independent Union of Halifax Staff) moved the following motion:
(Insert Motion 32)
He said: My union fully supports the steps which have been taken through, for example, the establishment of the Financial Services Authority to protect consumers who are also our members, particularly in the light of the scandal of the mis‑selling of personal pensions. However, the question that must be asked is whether, in protecting the consumer, we are failing to protect the employees, our members.
Finance sector employers, to limit their potential liability to the kind of criticism and findings that Helen Liddell and her colleagues at the Treasury have rightly meted out, are developing working practices that remove any opportunity for meaningful customer interaction and job satisfaction. Being logged on to a computer for eight hours a day, having the duration of your calls monitored, having your every movement monitored by the technology is not a way of working which any of you at Congress would enjoy and which none of our members should be subjected to.
New technology, computers, advanced software and telecommunications have altered the balance between mental and physical work. Thousands of jobs in the banking sector have become systemised over the last ten years. Call centres operate in conditions that are mostly the same as traditional factories: discretionary moves to software programmes, power dialling systems which mean there are no gaps between calls and no control over the calls taken, shift arrangements often exhausting for the individual, and all this in the name of efficiency. It can represent an appallingly difficult and stressful environment.
The Congress President in his opening address spoke of the need to get job satisfaction back on the agenda where working people value even above job security work which is stimulating and satisfying.
We are witnessing a new industrial revolution. The practices which existed in factories in the past are now raising their heads in financial services. We should not repeat the mistakes of the 19th Century as we face the new millennium. Ignorance is not a defence. It is time for those who claim to be responsible for consumer well‑being to take action now, to address realistically the implications of technology in the financial services sector. Level playing fields are important. Consumer protection, yes, but, Congress, you must not allow our members in the financial services industry to become victims.
Mr Tony Whiteley (Manufacturing Science Finance) seconding the motion said: The motion goes to the heart of what is a critical issue in the financial services, that is how financial services are regulated for your protection. The issue, however, is not just a debate to deal with the sectional issues facing the finance unions.
We, the finance unions, are warning all of us that without proper regulation call centres may become the deliverers of a finance scandal far greater than the pension mis‑selling affair. Currently the Financial Services Authority regulates the selling of finance products. Finance advisers are required to know their customer and offer best advice before selling a product. This means that for thousands of sales professionals, many of them members of our unions, the sales process is a slow bureaucratic process.
As part of the "giving best advice" an adviser must complete a fact‑find, a document up to 20 pages long. Whether that process can be improved on is not the issue. However bureaucratic, it is essential that people being sold finance products should be protected from being mis‑sold a personal pension or any other financial service product. The failure to properly regulate in the past is still being resolved, and you know it. It has been resolved for thousands who were sold pensions they did not need and that were poor value compared with the pensions that we negotiate as trades unions.
Yesterday we acknowledged the major impact call centres were making on the provision of services and the selling of all kinds of product. Call centres are here not just to stay but they are going to replace other ways of retailing and, of course, they will replace thousands of other jobs. In insurance and banking they will replace many of those who sold financial service products and who were regulated and required to give best advice to the consumer. Already consumers, customers, can choose to buy a wide range of finance products through call centres. Many call centres do not provide financial advice but simply an execution only service. That gives them a significant cost advantage over delivery. It means, however, that the consumer can telephone on impulse and without the benefit of any finance product be sold a product which is totally unsuitable and have no come back because the call centre will say "Our job is not to advise".
The reality is: are you going to trust the integrity of the financial services companies that brought you the mis‑selling adventure? Are you going to trust the integrity of sales people who have to deliver to a performance related pay system? We cast no aspersions on many of the companies in the finance sector. We certainly cast no aspersions on the employees who are put through these types of contracts. But what we insist on is that there is proper regulation of call centres as far as concerns selling finance products that affect your future, your children's future and your retirement options.
The President : The General Council is supporting the motion.
* Motion 32 was CARRIED
The President: As the delegate is coming to the rostrum may I point out to delegates that the Union for Bradford and Bingley Staff is one of our new affiliates and they are making their first appearance at Congress. You are very, very welcome.
Mr David Matthews (Union for Bradford and Bingley Staff) moved the following motion:
(Insert Motion 34)
He said: It is with great honour and a little trepidation that I address this Conference as the first representative of UBBS to speak at Congress. We are determined that our adoption by this great family of trades unions will prove to be fruitful to our membership and we hope our contribution will be of value to others.
The theme of our motion was chosen with great care and it is one which is of importance to us all this week. As a trade union we have from day one in the great demutualisation debate argued that we are fully in support of mutuality. Everyone here knows the value of working together for a better life, and everyone here knows that cannot be achieved by handing out a few hundred quid in free shares in a new Plc. Experience tells us that such creations very quickly metamorphose into a different kind of animal with much of the shareholdings finding their way to City institutions.
The casualties of these surrenders are many: mortgage holders who think they have fallen upon the opportunity to redecorate the front room or take the kids on holiday. They will likely have to pay something like four or five times more back during the life of their mortgage for that treat. Even with interest rates as they are, you would be better off taking out a personal loan.
The employees of building societies provide a diligent and world-wide service which is trusted and valued by the public. Their economic life becomes immediately more fragile as a surge for rationalisation and mega‑mergers begins. Our friends in the banking sector have been for many years now lectured on the mythical importance of providing value to shareholders because they own the company. The truth is we already own the mutual organisations, and we own them in trust just as our forbears did. Their hard earned cash maintained these institutions and we have no right to sell this legacy. Our children have the same rights to decent affordable housing as we do. If we can maintain mutual organisations for the future there might be some jobs in it for them too.
I personally have nothing against individual shareholders; I am one. Out of a misguided and unrequited love I purchased 1,000 shares in Queen's Park Rangers F.C. about two years ago. I am now fully aware of the small print that says the value of the shares can go down as well as up.
As I have said, we already own these institutions. Customers and staff are stakeholders and we should not be fooled by the hype. As a union we felt no little anger during the recent Nationwide Building Society ballot when a prominent supporter of demutualisation, and a candidate for election to the Board of Directors, very publicly attacked Nationwide staff. Apparently some of these people had the temerity to inform customers that their jobs might be at risk if their Society was demutualised. This was from a would‑be Director of a would‑be public company. It is some democratic ballot when a significant proportion of the constituency is not allowed to vote. Congress, we have enough Plc Directors of this ilk already and we do not need any more.
Of course, we agree with the Government when it argues that mutuals have a responsibility to prove to the public that they offer a meaningful and value enhanced service to their customers. It is not easy when everybody ‑‑ and I mean everybody ‑‑ in an organisation has to focus on dealing with an annual melee of greed‑induced carpet bagging. We need to stop the annual jamboree so that we can get on with putting customers first, as they say.
We welcome the amendment to this motion from our colleagues in BIFU who, for the record, have begun a process with the Bradford & Bingley which we hope will be of advantage to customers and employees alike. We believe firmly in redeployment and not redundancy and are in the process of agreeing joint arrangements in this area. Obviously staff staying in an organisation need better customer services as well as job security, for the society surely to embark on a countrywide tour with senior executives meeting the public to hear what they want from mutual organisations. I hope calling them Focus Groups does not give them the kiss of death. Nevertheless, representatives of our union will be there as partners in this process. We also believe that the society will see the value of entering into a formal partnership agreement with us in the near future.
With regard to Clauses (iv) and (v) of the amendment, these can become irrelevant if mutuals seek to follow this course of action. However, we are in constant danger of having all this snatched away from us every year and that has to stop. We call on the Government to consider urgently strengthening the legislation that encourages the existence of mutuals in the world of finance, and to challenge the concept that conversion is good for the public. It is not.
For the sake of many thousands who work in our part of the industry and for the many millions who have and could benefit from mutuality please support the motion.
Ms Sybil Dilworth (Banking, Insurance and Finance Union) moved the following amendment to Motion 34:
(Insert amendment to Motion 34)
She said: In putting forward this amendment BIFU wishes to state its unconditional support for the central aim of the motion from the UBBS, that is the strengthening of legislation to protect mutuality building societies. Following John Prescott's speech yesterday afternoon, our members in the building societies are looking to New Labour to match their warm words of support for mutuality with action to preserve building societies, both now and in the future.
Successive governments have had ample opportunity to introduce strategy measures to protect building societies from speculator pressure, designed to force those societies to sacrifice generations of tradition for quick cash pay‑outs, and for these newly created banks to become subject to the whims of the City and institutional investors. This, of course, is not to criticise people for opting for a quick profit, and this is always wrong, but the long‑term costs for those windfall payments however will be substantial: job losses which have happened where building societies have converted to Plc status; loss of home when interest rates rise as they have in the building societies which have converted; loss of access where workers on low incomes are denied the basic right to a bank account or a mortgage. BIFU believes that our amendment would ensure that the regulatory bodies governing the building societies will be left in no doubt as to the matter of public policy, and any conversion to public limited status by a building society will have to give due consideration to the impact it may have on the jobs, branches and services to local communities.
In the public interest it is not satisfactory that those looking to shed mutuality should not be allowed to proceed. We warmly welcome this opportunity for Congress to reinforce its support of the concept of mutuality, and its important role in our culture of collective responsibility for ourselves. We strongly urge Congress to support the motion and the amendment.
The President. The General Council supports the motion.
* Motion 34 was CARRIED.
Economic regeneration and research investment
Mr David Triesman (Association of University Teachers) moved the following motion:
(Insert Motion 30)
He said: It is not, it cannot be, a comfortable motion. Congress has often observed and criticised the dismal investment record of UK industry. The City and big institutions happily speculate on currency; they invest abroad but they will not invest in the United Kingdom. Our industries, once world leaders, are run down. They languish and many finally close. They have moved from being distinguished to extinguished in a generation. Many now survive as memorial parks, theme museums to show the next generation what we once used to do in this country. We run condolence industries.
Manufacture, using low or intermediate technology, can be run in the third world at unit labour costs with which we dare not compete. We have moved from low pay to starvation pay. Our future lies in an economy at the front edge of science and technique, employing the most knowledgeable and adaptable people at the front edge of investment and achievement. That is our only future; there is no other. There is no nostalgic hankering after the past.
That, of course, is what is uncomfortable. Investment in the future must be directed from areas of decline to areas driven forward by scientific research and by the development of our people, and only in that way will the United Kingdom become truly competitive and prosperous again -- prosperous enough to fund the health, the welfare, the education and the pension needs of our people.
What must we do? First, let us give credit where it is due. The comprehensive spending review put , 1.1 billion more of Government money into science and research in UK universities over the next three years. The Wellcome Foundation, who have also been sponsoring the excellent young musicians at this Conference, have made a remarkable, quite exceptional commitment of over , 300 million in matching funds. It reflects what Gordon Brown said -- harshly perhaps but fairly -- of the last Government: he said "The run‑down in science and technology under the previous Government is something which no Government should have allowed and something we are not prepared to tolerate." The run-down started, of course, with a vengeance when Michael Howard was at the DTi. He committed every crime against the British people which did not require courage. I earlier was to appear on a radio gramme "In the Psychiatrist's Chair". I believe we should suggest a new programme "In the Electric Chair"!
Sadly, the comprehensive spending review money is not enough if our decline as a global innovator is to be arrested. We start from too low a base. The Commons Science Committee and key science organisations like Save British Science say that we need to double our spending and do so immediately. We are below every key OECD indicator, and that means our competitors will always do more. It is so obvious. You cannot compete with advanced economies if you do less and less and they do more and more.
It is only a small exaggeration to say that much of the equipment in our great university research departments and laboratories would enjoy pride of place on the Antiques Road Show. Key research groups, for example, have had to struggle to do the basic work on BSE and CJD, and that is madness.
Just think how rare it is now to win a Nobel prize in science. It is the same old, old story: we have the ability but we do not back it. We need state involvement and serious funding, and we need the investment urgently. We need to set targets which compare with the best in the OECD, and we need to meet those targets. We want what we believe would be an appealing innovation: investors in scientific people, a scheme in which schools, universities, employers and others can make long‑term commitments to developing and encouraging young people, especially women and girls, into science.
I sometimes envy Rodney Bickerstaffe and Jimmy Knapp. Everyone understands the degradation of low pay or the need to avoid a potentially lethal rail system. We feel about these things; they touch us deeply. Quite rightly so. Science does not seem like that. It seems to be done by a group of bawling boffins, like Barnes Wallis making bouncing bombs, but the truth is it is the future. It is the economics which mean that we will abolish low pay, that we will have safe railways and that we will meet our best social aspirations. It means the knowledge with which we will need to face the next decade so that if we get it wrong every one of us will suffer.
I ask you to put your hearts into it in the same way you put your hearts into other things. It is about the future of our country, decent and civilised living. I move.
Mr Ken Jackson (Amalgamated Engineering and Electrical Union) seconding the motion said: I am standing up and defending manufacturing, putting jobs first, defending quarter-of-a-million manufacturing workers whose jobs will go if we sleepwalk into recession. As leader of the largest manufacturing union, there is no way that I will stand back as our members become the victims of high interest rates, highly skilled productive workers who do not have to read the papers to know what is happening to our economy.
Look at Rover, look at Royal Ordnance, look at Nissan - and do not tell me that Nissan, with the most productive car plant in Europe is whinging about the pound. I know about the slow-down in the United States, the chaos in Russia, the crisis in South-East Asia, but it is folly to compound the misery of manufacturing with such high levels of interest rates.
I share the concerns about inflation and I congratulate the fact that we have hit our target on inflation. Nobody wants a return to boom-and-bust policies that damaged us in the past but you cannot run a modern, dynamic, successful economy purely on the back of the service sector. The pursuit of low inflation is vital but employment is vital as well. You cannot expect business to compete when the level of domestic interest rate prices our companies out of the market. The CBI knows it, the Engineering Employers' Federation knows it, the Federation of Small Business knows it, and we are not talking ourselves into a recession, we are trying to find a way out. It is no use burying our heads in the sand denying there is a problem at all.
In fact, there is a growing swell of support for a reduction in interest rates. Employers, unions, everyone from the shop floor to the board room knows that interest rates must come down and if jobs form part of the Bank of England's remit, if the Monetary Policy Committee listened to industry, if the MPC came into the real world with the rest of us, they would know as well that interest rates have to come down.
Congress, you do not have to be an economist to work out what is happening. Look at the lessons of industry. Remember what happened in the 1980s when we had a similar situation: 40% of manufacturing was decimated. We are an island built on coal and we do not have a coal industry; we are an island and we do not have a shipbuilding industry, an island with no shipping industry and virtually no fishing industry, millions unemployed and a skill shortage. You could not make it up! So let me say at this point in time, if we are to defend manufacturing, if we are to defend jobs, then interest rates must come down as a priority. I second.
Mr Bob Braddock (Manufacturing Science Finance): I am supporting Motion 30 and the AEEU's amendment. MSF is the largest union in the private sector for finance workers and is organised in many of the key areas for scientific and technological advance. MSF has long held the view that the UK has under-performed in relation to investment in R&D whatever yardstick is used be that profit, turnover or percentage of dividends paid to shareholders. The UK has a poor investment in R&D across many key industrial sectors. The CBI Natwest Trends Survey of 1997 reported a decline in manufacturing innovation and expenditure of 5% and these figures only record the latest stage in a continuing trend.
So does this matter? We believe that a strong and robust manufacturing sector is absolutely central to ensuring sustainable economic growth. Innovation is key to manufacturing success. To improve the UK's relative international position we must innovate, innovate, innovate. However, R&D is one component in the industrial picture, albeit an important one.
Economic regeneration and investment must be set within the economic environment we all inhabit. MSF and the Labour Movement are working closely with the Government on many initiatives but this strategy is based on a buoyant and expanding economy. Further resources for public services, an increased skilled workforce, a permanent reduction in long-term unemployment, through initiatives such as New Deal, are all at risk if the economy as a whole moves towards slow-down.
Manufacturing is bearing the brunt of economic problems. Major job losses are now a daily occurrence and a failure to overturn past policies threatens the manufacturing sector and its importance as a wealth creator, and the sector's problems are not helped by the strategy of the Monetary Policy Committee. Whilst I would not wish to upset the country's Bank Manager, we would be failing our members and the country if Congress did not hammer home the message of economic sanity. Governor, the dangers of inflation are well-known but the pursuit of this indicator alone is to forsake reality. Throughout the UK, manufacturing industry is haemorrhaging jobs. Instead of concentrating on working with industry to improve manufacturing, its quality and productivity, trade unions are struggling to maintain plants.
In the North-West we have the industrial capacity and knowhow at Vauxhalls for exports. It is an engine of economic regeneration but it was only through the efforts of union and management working intensively together that we won the Government over and saved it.
Governor, an overvalued pound is driving world-class manufacturing industry to the brink and beyond. In the light of the Asian melt-down, Russian collapse, calls to the G7 countries to reduce inflation rates and the welcome fall in the underlying rate of inflation, Congress calls for an immediate reduction in interest rates and a widening of the policy remit of the Monetary Policy Committee to promote stability and growth in the real economy. I move support for Motion 30 and the amendment.
Mr Kevin Curran (GMB): Speaking to Motion 30 and the amendment and speaking on behalf of the real impact of the economy - high interest rates - on our community in the North.
Conference, of necessity we often talk in generalisations. The term "manufacturing sector" is such an example, providing in some ways a comprehensive and accurate definition, but it is also a wholly impersonal and a very cold phrase. When we experience hardship in the manufacturing sector people experience personal anxiety, personal social disruption, personal misery by people evicted from their jobs. The real impact of economic policy is its impact on real people. If there is a real desire to re-establishment inclusive values in the community, then we must defend and promote values other than the value of the pound.
At last year's Congress the Prime Minister urged us to embrace change and advised us that it was warmer in the real world. For thousands of our people in the North-East the real world is a damn site colder when you are trying to keep at work in the real economy. Those of us who live and work in the real economy live and work in the real world, a world centred around the need to earn real wages. We do not live in a Treasury computer-generated model; we live in the real economy where the success of our economy depends on people, real people whose lives and future and their economic and social well-being is under threat.
The value of the pound is not the only value that should be considered when assessing economic policy. We need to consider and assess the value of economically active citizens. We need to consider the value of community; we need to consider the value of social inclusion and the cost of social exclusion. A successful economic policy is one that does deliver on social inclusion, one that supports and sustains community.
Short-term external pressures on the economy, if allowed to, can and do result in long-term suffering and it is our members who suffer most. When economic policy fails communities fall apart. It is not short-term when you lose your job at 45 years of age; it is not short-term when your house is repossessed; it is not short-term when you are dismissed from your only source of income.
However, I am going to depart from a criticism of the Bank of England for a wee while because there is another responsibility too and for too long directors have hidden behind their responsibilities. Corporations also have a responsibility towards the communities which provide them with the infrastructure and the personnel which enable them to function and operate. They must recognise that they have a social responsibility as well. Employers must stop insisting that they are powerless in the face of unfavourable economic circumstances.
I have listened closely to the concerns expressed directly to me by manufacturing employers in the North-East about the strength of the pound. I have listened very carefully, as they employ GMB members. I also remember listening to employers and to Government not many years ago saying that if we are to build and maintain a strong society we need to work towards the example of the German and Japanese economies. It is interesting, is it not, that these same economies prospered through exports to the rest of the world whilst also having the strongest currencies in the world?
British companies have lessons to learn because if we, as a society, achieve our objective of building a vibrant economy, the value of the pound will always be strong. If we have to compete in a world market, then let us compete on improving quality and innovative design, not pursue the lowest common denominator of low skills, low wages and higher unemployment. Economic policy must deliver social results. The value of the pound must be relative to values of community, values of inclusion, values of cohesion. An economic policy must include an assessment of the real impacts on real people.
The General Secretary , supporting the motion, said: President, Congress, I want to express the General Council's support for the motion, but perhaps, more importantly, I want to clarify where we go from here. We have certainly been raising our profile on the economy and I think we have got across the fact that the economic slow-down will mean job losses, we have got our views over on the terms of reference for the MPC and on the need for it to be highly sensitive to the delicate state of much of manufacturing and to employment. Of course we will continue to do that, we will continue to make our case vigorously known.
But we must go a bit further and we must do more. Our next step must be to shape the alternative, an alternative that is robust and persuasive and strengthens the arguments that we deploy in this debate, an alternative that deals both with the problems of inflation and the problems of unemployment. I do not think inflation is about to take off, but no-one here in this room should underestimate Britain's inflationary past. Perhaps the risks of deflation at the moment are much greater but, as I say, we always must keep this balance closely in mind and when EMU begins in 11 countries in just 3 2 months time, the pound sterling is going to be in a very exposed position. We want the pound to ease down to about 2.5 deutschemarks, but too precipitate a fall in sterling could certainly trigger inflation.
We have rightly criticised the one club approach, the President recalled it yesterday, but for us to sustain our criticisms we have to address what the other clubs might be and there are some hard choices, some uncomfortable ones - increases in tax. These are not light positions for the TUC to take up, certainly in terms of their impact on our members. Certainly we would not be supporters of cuts in public spending, that would not be popular. Tougher fiscal policy, coupled with a lower monetary policy, does not change the overall balance.
There are, of course, other clubs that can be used over time: extra investment in new technology, in skills and training will certainly help but you do not get immediate results on that particular front.
In the short-term the other possible clubs begin to look difficult too. Sooner or later attention has to turn to pay and prices, yet I certainly do not detect many takers for prices and incomes policy in this hall or in the Government, but I do believe that we need a better informed debate about what is happening on the pay, prices and profits fronts. Just as social partnership at the company level needs a shared understanding of the Company's performance, so social partnership at the national level needs a shared understanding of what the nation's finances are. There is a relationship between pay, productivity and inflation, and the TUC, CBI, and the Bank and the Government should have a shared understanding about what it is. Eddie George's contribution later I think will be a good start for the process of dialogue and discussion and, of course, just in case anyone has missed the point, the Governor and the Monetary Policy Committee work within the remit that has been given to them.
The General Council has decided, in the new Congress year which starts of course next Monday, to give this whole area some priority attention. I do not doubt the difficulties, but we are going to have to address these if our campaign is to make real progress and carry that much more weight.
* Motion 30 was CARRIED.
Textiles, clothing and footwear industry
Mr Paul Gates (National Union of Knitwear, Footwear and Apparel Trades) moved the following motion:
(Insert Motion 31)
He said: I am just having a good look round the hall, President, to check that there is nobody in the hall without any clothes on. That means that all of you here have got a vested interest in this resolution. We spend, between us, , 30 billion a year on clothing and footwear in this country. It is still the fifth largest manufacturing sector in this country and it employs overall nearly 400,000 people.
Like all manufacturing industries, we are faced with difficulties but it is not just on the question of exchange rates and interest rates. Exchange rates in an industry like textiles, a global industry, will always have fluctuations, but interest rates are a slightly different matter. In an industry where profits and margins are extremely small anyway, to ask small and medium enterprise employers to invest money in new equipment and machinery, when a hike in interest rates over a few months can wipe out the whole of their profit margin, is not easy to do.
But the problems of our industry go far deeper than just interest rates. President, you said in your address to Congress that we should admit our mistakes as trade unionists. Yes, back in the 1980s the unions in the textile industry made mistakes: we had one policy, and one policy only - import controls, protectionism. But we have learnt by the mistakes and two years ago in this very hall the three major unions in the textile industry held a press conference calling for a strategy and saying if a strategy was not developed then something like 50,000 jobs could be lost in the industry over five years.
Two years later - two wasted years later - where are we? We have just about got the DTI on board with a plan for the industry. We have finally got the employers to give us a date for a meeting where this plan and strategy can be initially discussed. We still do not have co-operation between the retailers in the industry and the manufacturers of the industry, and a strategy for the industry that does not contain the very people who sell the goods is no strategy at all.
All this was before the intervention of St. Michael of Morocco. Rather than encouraging rodents to desert a sinking ship, Marks and Spencer should be leading the effort to obtain a strategy for the industry, an industry that has served them and their customers well for many years. It is not just a question of price. Customers are prepared to pay a price for the goods, but only if those goods are of good quality, only if they are goods that they want to be associated with, goods that add value. We only need to look in the footwear industry: a good quality leather trainer can be bought for , 20 plain, but people will pay four times that for virtually the same product if someone will come along and put "Reebok" or "Nike" on the side.
The strategy we are seeking needs Government support through the DoEE for training, through the Regional Development Agencies for investment in the latest technologies, through the business links for support for small companies to encourage partnership where these small companies on their own cannot finance new technology. In Italy that is the way the industry has developed and been built, through networking and partnerships, and there is opportunity for that in this country, for manufacturers to work with retailers forming committed supply chains, and we need to boost our export drive. Many parts of the world still provide the opportunity for the UK market in quality goods.
Conference, workers in the textiles, clothing and footwear industry are not going to throw the towel in, they have a lot to offer. They are seeking your support. We do not want you to throw your clothes away, we want you to keep them on, but we want to make sure that you analyse what you are wearing - our clothes made by trade union labour, protecting jobs in this country, providing manufacturing industry with a base for this country.
Ms Christine Howell (GMB) seconding the motion said: In seconding this motion I am defending an industry which I will support with all the means at my disposal. You have all heard about the redundancies, about the closures, about the work moving abroad - their term is "outsourcing".
In the clothing and textile industry 18,000 jobs have been lost in the first six months of this year alone. Congress, I know this industry, it is in my blood. It is breaking my heart to see not only the decimation of the industry but the loss of highly-skilled clothing and textile workers who have given very many years faithful service for very little reward.
The industry is being crippled. High interest rates and the high pound are heavy blows for any industry to take, let alone one which accounts for over one-sixth of manufacturing exports in this country, and if the uncertainty and gloom that we are experiencing spreads over the rest of UK manufacturing, it will not be just the demand for exports that is at stake.
Sometimes I hear people writing off the clothing and textile industry as a declining industry, a dinosaur in a world of modern manufacturing. Yes, I agree, some of the practices are outdated. Piece rates and poor terms and conditions may not be exactly Jurassic but they are certainly sometimes very Victorian. But Britain is at the cutting edge of high street fashion design. We produce quality goods and we can compete with the best in global production.
When I heard about Marks and Spencer's call for production to be shifted overseas, I was so angry and cross. How dare they treat people like that? How dare they play with people's jobs and livelihoods?
Interest rates and exchange rates will not be high for ever, but when the Bank of England finally responds to our pleas, will there be a clothing company left producing in the United Kingdom? Will there still be skilled workers able and willing to come back into the industry? That is why we in the GMB will fight and campaign hard to defend the industry. That is why I call on you, Congress, for your support. I second the motion.
The President : I would now like to move to the vote. This is Motion 31, Textiles, clothing and footwear industry. The General Council supports the motion.
· Motion 31 was CARRIED.
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