Shadow Chancellor, John McDonnell's speech to TUC Congress 2018
The 150th annual TUC Congress 2018, 9-12 September. Manchester
Thank you, Brothers and Sisters. I am a bit late because the train in front of us broke down, so I speak on behalf of the nation with an appeal to Theresa May: Please do not allow Chris Grayling near any Government department ever again in the history of this country.
Let me thank Sally for the introduction. It was very kind of her. I listened to Sally’s speech on Sunday, taking us through the 150-year history of the TUC. I have to say I found that speech profoundly moving – the whole history of struggle of working class people throughout the last 150 years.
As Sally said, I came off the shop floor myself. I worked for the NUM. I then joined the TUC at Congress House as a researcher. I have always been immensely proud of my trade union origins. This is an honour, an absolute honour, to be invited to address Congress. Thank you very much for giving me this opportunity.
As Jeremy and I have repeatedly said, the trade unions founded the Labour Party. Never again should there be a Labour leadership that looked upon the trade union link as some form of anachronistic embarrassment. We are one movement. (Applause) We are the labour and trade union Movement, as we will always be and we will always stand together.
Strangely enough, I was at a retirement do of one of my former TUC colleagues a couple of years ago and she reminded everyone that when I was at Congress House I set up a reading club, and it met once a week in the basement at Congress House. She only had one complaint, and it was that the only book we ever read was Das Kapital.
Look, this week is the 10th anniversary of the collapse of Lehmann Brothers, the start of the financial crash overall. I remember it as if it was yesterday. What followed were the crises in Northern Rock and RBS. Someone recently dug out a film of the interviews and speeches that I did on the TV and in the Commons at the time. As the banks teetered on the edge, I called upon Alistair Darling, who was then the Chancellor, to nationalise the banks, to stabilise them. He, initially, delayed but eventually nationalisation was implemented. I always remember that Alistair had a dry sense of humour, so when I got up in the Commons to welcome nationalisation, his response was, “I have been calling for the nationalisation of the banks for 30 years, so I was bound to be right on at least one occasion during that period”.
Let’s be clear. The financial crash was caused by the deregulation of the banking system, the finance sector and greed. It turned the City into a giant casino. Here is the irony for me. The money that we pumped in to save the system through quantitative easing inflated asset prices, and many of the very speculators whose reckless gambling caused the crisis actually benefited from it! The election of the Conservative Government in 2010 meant that it was not those speculators who caused the crisis who would eventually pay for it. The Conservatives made the choice that it would be the rest of us, especially some of those most vulnerable within our society.
So 10 years on, after eight years of grinding austerity, in the sixth-richest country in the world, I find it a disgrace that there are five thousand of our fellow citizens sleeping on the streets every night. I find it unacceptable that 70,000 of our children have been brought up in temporary accommodation, never having had a permanent roof over their heads. There are a million people now who are not receiving the social care they need, and over a million food parcels handed out to our people last year from the food banks because they haven’t even the means to feed themselves! There are four million of our children now living in poverty. What is particularly telling is that two-thirds of those children are in households where someone is at work. What does that tell you? It says that wages are so low that they no longer for many people cover the basics in life. The Tories talked about “those who are just about managing”. Yes, there are issues there, but there are some people out there who are just about surviving.
The Conservatives have been boasting in the last few days again about the number of jobs in the economy. What they don’t tell you is how many are low paid, insecure and with zero-hour contracts. We know why, don’t we? We know why they are insecure, we know why they are low paid. It’s because year after year under Conservative governments there have been attacks on trade union rights. The role of Conservative governments throughout history has always been to restrict the rights of workers so that they can maximise the profits of some companies, and they are the companies that so generously fund their party. It is a straight quid pro quo. The Conservatives try and dress it up as some form of restoring or securing a balance of power between workers and employers, but few today can argue that the balance has not been overwhelmingly tipped against the workers, as concluded in the recent IPPR report, supported by the Archbishop of Canterbury. The result is that the amount of national income going to wages has actually now reached record lows. The massive growth in zero-hour contracts and the gig economy have produced a workplace environment of insecurity not seen since the 1930s.
My father was a Liverpool docker and my grandfather was a Liverpool docker in the 1930s. They were those dockers who used to stand outside the dockyard and wait on the street to be pointed at to see if they worked that day, and if they didn’t there were no wages. Zero-hour contracts and bogus self-employment simply replicate that system in a modern form, and we can’t tolerate it any more.
The decline of collective bargaining has meant that workers now have little say often over key decisions taken by their employers over the future of their work and their companies as well.
So let me make it absolutely clear. When Labour returns to government the anti-trade union era will end, and if it is up to me it will end once and for all. Our programme of workplace reform will restore the balance between employer and worker, and it will do so, yes, by installing basic trade union rights into law again, modernising corporate governance structures and by extending the opportunity for employees to share collectively in the benefits of ownership of their company, their concern. This is how we will do it. The Government at the moment, I think, is rapidly being destabilised by the bitter internal disputes within the Tory Party. I believe an election can come at any time. So we are now going through an exercise, a preparation-for-government exercise. We are preparing for every policy in our last manifesto and, yes, the new policies we are now developing, an implementation manual. We are getting the draft legislation on the shelf. Yes, we are consulting extensively on the new policy initiatives that we are developing. To install basic trade union rights in law, we published our 20-point plan and we are now working it up in detail. So in our first Queen’s Speech — let me give you this commitment — we will be setting up the new Department for Employment. The new Secretary of State for Employment in Cabinet will drive through a transformation of the workplace environment. He is just part of it. We will fulfil the late John Smith’s promise that all workers will have equal trade union rights from day one, whether they are part-time, full-time, temporary or permanent. Zero-hour contracts will be banned, so that every worker gets a guaranteed number of hours each week. We will repeal the Act that I fought so hard against. We will repeal the Trade Union Act in our first hundred days, and we will role out sectoral collective bargaining. All of those other things that we have discussed over the years: trade unions will have the right of access to workplaces guaranteed. We will introduce a real living wage of £10 an hour. Yes, and like you, we believe that public sector workers deserve a decent pay rise. We support those unions that are still campaigning for a decent settlement now.
I was asked at my media huddle after Treasury Questions about what would I be doing if there were further strikes on the railway industry this winter. I said, if they are, they will be provoked by management, but the role of a Labour MP isn’t just in Parliament. It’s on the picket lines! So I’ll be on the picket line with you. We will legislate to secure online and workplace balloting for industrial action votes and internal union votes, all those things that we have simply made reasonable requests of this Government and they have refused to respond.
Yes, we will abolish employment tribunal fees, so people have access to justice again. We will prioritise the strengthening of protections for women against unfair redundancy. No one should be penalised for having children. We will tackle the gender pay gap once and for all. In addition, our government will clamp down on the bogus self-employment that we have seen develop and, yes, we will ban the payroll companies, the umbrella companies, that have been developed in recent years.
One way of using public spending to drive up standards will be this. We will include in conditions in public contracts that companies will only get those contracts if they recognise a trade union representing their workers.
Just on something which I have been dealing with personally, maybe over the last 20-odd years or more. We will hold a public inquiry into blacklisting so that we ensure that blacklisting never, ever comes back again.
Since we published that 20-point plan, there has been the Taylor Report. The answers to the gig economy, to be frank, will not be found in the Taylor Report or the months of consultation that have taken place because the report’s starting point is that flexibility must come at the price of insecurity. This is just wrong. Just because you don’t work regular hours doesn’t mean you can afford not to work when you are sick. Just because you work several jobs, it doesn’t mean that you can afford to lose one of them without warning. Just because you value the freedom of independence or the convenience of flexibility, it does not mean that you have to forego basic trade union rights. So our manifesto For the Many not the Few we published nine months before the Taylor Report, and it contained a set of policies that would put a complete stop to the exploitation in the gig economy. First, we will shift the burden of proof so that the law treats you as a worker unless your employer can prove otherwise. Secondly, we will extend full rights to all workers, so that includes so-called “Limb-B” workers, entitling everyone in insecure work to sick pay, maternity rights and the right against unfair dismissal, and that again will be from day one. Thirdly, we will properly resource HMRC. Yes, we will fine employers who break the rules so that people get the rights that they are entitled to. When employers continue to employ legal loopholes or weak enforcement to duck their responsibilities, we will close those legal loopholes and strengthen enforcement. We will work alongside the TUC to do that.
When technology creates new employment relations, yes, we will extend regulation to keep pace with your advice in our ears. When the balance of power shifts so dramatically away from workers, as it has done today, it is time for us to tip it back in the direction of the workers. So I think, taking that with all our other commitments, that what we are about to see, and when Labour goes into power, is the biggest extension of individual collective rights our country has ever seen. It will transform irreversibly the workplace and our working lives. Right at the heart of it are the principles of trade unionism.
Even if the Government adopted every recommendation of the Taylor Report, it wouldn’t be enough. It is because Taylor ignored the crucial history lesson that we have learnt, which is that the most effective way of improving the lives of working people — you know it — is to join a trade union, participate in collective action and work that way.
When we go into government, we will have to work together to rebuild our economy. I will just give you a few stark figures to demonstrate what we are likely to inherit. This may well have come up in your debates already. You know as well as I do that wages are still below the level of 2010. Investment in 2017 was the lowest of all G7 nations on the share of GDP. We have had the slowest recovery since modern records began. We are the only major economy where wages fell while the GDP grew. Research and development investment is amongst the lowest in Europe. For use of robotics, we are the 22nd in the world. Our productivity gap is 16% between the UK and the rest of the G7. These statistics demonstrate a record of economic mismanagement and failure, and we have an economy now that is supported by record levels of household debt.
I am grateful now for the supports, the ideas and the creativity that our trade union partners have brought to the detailed economic planning that we are undertaking. Step by step we are working together on the economic and industrial strategy that we need to build the future. Firstly, we need to clear away the debris of the past privatisations that are ripping off both consumers and taxpayers and, yes, exploiting workers. So we have told you, yes, we will bring back into public ownership rail, water, Royal Mail and we will develop our own community energy sector as well. (Applause)
I want to say to Dave Prentis, who first raised the concerns of PFI through Congress and into the Labour Party as well. We will end PFIs and, yes, we are going to start the process now of bringing them back into public ownership and control as well as the staff themselves, who deserve the protections against the vulnerabilities they have experienced. We have also said very clearly that when we bring these services back into public ownership and control, the management of these services in future will always involve representatives of the workforce via their trade unions. Who better to ask in how to manage a service than those at the front line represented by their trade unions? That is the first step.
The second step is the investment we need to undertake. We recognise the scale of the investment we need if we are to rebuild our economy. That’s why we have put forward what we have called a National Transformation Fund of £250 billion, mainstream funding through government departments. It is why we will set up a national investment bank, alongside regional development banks, again to lever in another £250 billion over that 10-year period. So that is £500 billion invested over 10 years in our infrastructure, road and rail, digital, research and development and, yes, alternative energy sources. That is a figure supported by the CBI, who, again, we are working alongside to develop our proposals. These resources will be invested to modernise our economy and make us fit for what you have been debating this week. It will make us fit for the fourth industrial revolution. They will be directed by our industrial strategy. Trade unions already are, and will be throughout our period of office, at the heart, at the very heart, of developing and implementing our industrial strategy.
A few months ago, one of my advisers, Graham Turner, who I have worked with during the last 15 years — he is an adviser in the City — was asked to produce a report on the future of the finance sector, but also how we will secure the investment that our economy needs. We published that report a couple of months ago. It recommended the establishment of a strategic investment board to harness and direct investment, bringing together the Bank of England, the Treasury, the Business Department, business but also representatives of the trade union Movement. That SIB will enable us then, democratically, to manage our economy and ensure that we have the investment we need for the 21st century.
On skills, alongside the capital investment, we need the skills and the public services to ensure that we have a productive workforce. That’s why, as you know, we have put out the proposals for consultation to introduce a national education service. First of all, ending the cuts in education. We are going to make sure we properly fund our schools and colleges and, yes, teachers will be supported rather than oppressed in the way that they are at the moment, which means investment in the long term. We believe in education as a gift from one generation to another, not a commodity to be bought and sold, so that is why we are scrapping tuition fees. Our ambition is to achieve an education service like the NHS, free at the point of need, from cradle to grave, providing world-class education. Yes, we will be developing alongside that our proposals for child care. The NES, the national education service, like all our investments in the NHS, local government and all our public services, will be paid for by a fair taxation system. Yes, we have said we will raise taxes, Income Tax, on the top 5%. Not a lot but we will. We will reverse some of the Corporation Tax cuts that the Tories have introduced, which have failed because they have cut the taxes to the corporations and yet they are sitting on £700 billion of earned income not invested. Yes, we will introduce what some of you have been campaigning for for years. You called it a Tobin tax. We are going to introduce a financial transaction tax on the City of London so they pay their way to fund our public services. We are going to tackle tax evasion and tax avoidance that goes on on an industrial scale at the moment. During the last general election campaign the Tories kept on accusing me of having a magic money tree. I found the magic money tree. It’s in the Caymen Islands. We are going to dig it up and bring it back here!
As we rebuild our economy we insist that everyone shares in the prosperity that we will generate. Yes, by better wages, of course, but also we want to extend ownership so we are committed to doubling the co-operative sector within our economy. We are going to give workers the right to buy when their company is sold on. This week we have launched a consultation on an inclusive ownership fund. It is an idea brought to us by the Co-op, and it is developed elsewhere right the way across Europe. This will give workers a direct stake in their companies. We will legislate to create a new workers’ fund for each large corporation, which will place a part of that corporation directly into the collective ownership and control of the workforce. These funds will grow over time and mean workers getting a say in the management and direction of the company like every other shareholder. Research has proved time and time again that worker-owned companies do better for pay and conditions but are also more productive and they invest for the long term and engage in long-term stability within the economy. So you can see that this is a huge programme of work that will transform our economy and the lives of all of our members.
Yet it risks being jeopardised by the mess that this Government are making over Brexit. We do not believe that Theresa May will be capable of bringing back from Brussels a deal that will pass the vital test of protecting jobs and our economy. In fact, it is doubtful that she can bring back anything that can survive the bitter in-fighting in the Tory Party itself.
We believe that we need a general election where any deal can be properly debated and people can choose the future negotiating team as well. Like you, we haven’t taken any option of democratic engagement off the table, but we have an overwhelming preference for a general election because we need, our community, our members desperately need a Labour government. Whenever that general election comes, I am confident that Jeremy Corbyn will be elected into No. 10. I am hoping, if he makes the right decision and the right appointment, we will also have a socialist in No. 11. That was a job application.
You have seen from the programme that we have put forward, you have seen from the debates that you have had this week, that we have the opportunity of transforming our society, of building a new future. Some of my proudest moments in the last couple of years have been to see the new generation of trade unionists come forward. I have been on the picket lines with the McDonald’s workers and with the TGI Friday workers as well. This is the new generation coming forward. We have got to work with them to build this new future, this new society, where we eradicate the social injustices that the Tories have inflicted upon us, where we build an economy where prosperity will be shared by all, and in solidarity to the labour and trade union Movement, the Labour Party and trade unions working together, I believe, deep in my heart, we will achieve that in solidarity. Solidarity! Thank you.
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