Interview: TUC’s Frances O’Grady On Omicron, Furlough, Wages, Pay & Internationalism

Frances O’Grady – did she put a jinx on Boris Johnson?

This is a long read – but we are am sure that for many readers the issues under discussion are of sufficient interest to warrant the length.

When I spoke this week to Frances O’Grady, the leader of the Trades Union Congress, she had come straight from a TUC general council meeting, which, she said, had put her in a good mood. She was buoyed by the “appetite for practical solidarity, not just talking it but doing it.” That positive approach is a hallmark of Frances O’Grady’s approach to her position as general secretary of the TUC, and it could not be more useful at such a brutally difficult time.

Omicron has moved with such speed that when we had originally lined up to speak, it was not an issue at all. So before anything else, it was necessary to talk about covid-19 and omicron.

I put it to her that it is a problem that the government has moved towards restrictions and guidance to cope with Omicron, with serious consequences for workers in sectors of the economy like manufacturing, travel, hospitality, retail, the arts, but without anything approaching a furlough system in place to deal with it.

Frances O’Grady: “This is a major gap in the government’s approach: announce first, sort out how to deal with that announcement afterwards. The TUC has been saying for months now that we need a ready-made wage subsidy scheme. [There are] a lot of brilliant lessons to learn from furlough. Furlough of course was, I think one of the big achievements the trade union movement collectively can notch up, the first time we had a wage subsidy scheme in this country.

And without it, we are in no doubt we would have faced mass unemployment and all the high personal and economic costs that involves. But yes, here we are again, where despite our best efforts to encourage the government to plan ahead we don’t have that ready-made scheme in place. And even with working-from-home guidance, never mind the potential of further lockdowns, we are already seeing particular industries, particular plants and firms in real difficulty and livelihoods on the line. So whether it’s travel, whether its culture, whether it’s hospitality, we need support, but critically we need that support channelled through wage packets because that’s the best way to ensure not only jobs and skills are protected, but that we maintain demand in the economy. Because the one thing about ordinary working people is, people spend their money in local shops and businesses. They don’t stash it away in offshore tax havens. It does that positive circle of maintaining demand even in difficult times, makes all the difference between good jobs and viable businesses surviving or not.”

Simon Fletcher: You’ve been arguing for the ‘daughter of furlough’ even before omicron appeared, and all those arguments you were making have been demonstrated to be correct by what’s happened in the last few weeks.

Frances O’Grady: “Yes, and it’s why of course so many OECD countries, European countries already have that option of a ready-made scheme ready to go. And we’ve set out report after report giving government options on how you would design it, drawing on the best of those schemes. But it’s important not just because of the emergence of new variants – and none of us know for sure how long these waves of the pandemic are going to continue – but also just thinking about some of the other big changes we face, whether that’s the potential disruptions of moving to net zero, or automation and AI. Any decent business can go through a period of difficulty, [and] rather than see jobs go to the wall, it makes sense, it’s value for money, to support those jobs and businesses through the transitions they need to make through any temporary difficulties in order that our economy can bounce back so much quicker, and we avoid that what I still believe – as somebody was young during the 80s – the big evil of mass unemployment.”

The idea of applying lessons from the pandemic to other major questions like just transition for net zero is interesting and points to the benefits of planning for change in the economy.

Frances O’Grady expanded on this argument: “we’re now in much more extreme circumstances where supply chains are hitting disruptions, where we’ve got labour shortages in key areas, and now where we’re facing potentially large parts of the workforce being off sick, high vacancy rates, public services under pressure – you need a plan. This is the basic point trade unions are very practical people who like to have plans to solve the problems that we face in a way that is fair to working people.”

In The Times on Wednesday Frances O’Grady urged the government “get round the table like we did in March 2020” to discuss a daughter of furlough wage subsidy scheme for the present crisis. So far at least the necessary support is not forthcoming. It is an absolute priority to back the pressure to restore a furlough scheme to support everyone hit by the consequences of this new phase of the pandemic.

With pay and living standards hit hard by omicron, rising inflation – now up to 5.1% – is bound to intensify the cost of living squeeze for millions of people over Christmas and into the new year. The TUC’s leader had strong words about what is happening.

Frances O’Grady: “What we’ve seen is rising inflation ripping through pay packets and as our brilliant TUC team showed very clearly this is the biggest Christmas wage squeeze we’ve seen in nearly a decade. And that’s on the back of a decade of stagnating wages, stagnating at best, in many cases real wage cuts. On top of that, we’ve had Universal Credit cuts, which have hit some of the lowest paid, but we know also the middle are going to be hammered by that National Insurance contribution tax hike that very unfairly burdens lower paid workers, average workers and young workers. So it’s quite a cocktail that this government has mixed up. And we think there’s a responsibility on them to take, again, some very practical action.”

She argued to “lift what is a minimum wage closer to a real living wage”. Indeed, the question of wage rises was key: “We need real wage increases for public sector workers, key workers, workers across the board. And of course, an imaginative government would nick Labour’s proposal for fair pay agreements, starting with social care whereas we know the majority are on a good deal less than £10 an hour”.  Without that, it is a time of real stress and concern: “people shouldn’t have to be worrying about paying for Christmas, and there are an awful lot of families and not just the lowest-paid ones, who are really anxious and worried about how they’re going to foot the bill for Christmas this year. That shouldn’t be the case. Families shouldn’t be put through that worry. But just as importantly, it’s bad for the economy, when wages are not rising, it is very difficult to get sustainable growth. And we desperately need to kickstart that growth.”

I wanted to take the opportunity to discuss the opposite pressure that is coming from the government.

Simon Fletcher: Just on this point about wages: around their conference, and in the autumn, the government talked about wages needing to rise and they sold the budget as removing the public sector pay cap. But the Treasury has made it submission to the pay review bodies and argued that the pay settlements shouldn’t match inflation. And that’s essentially an argument for pay cuts in real terms for public sector workers. So we’re seeing pressure for pay restraint and real terms pay cuts from the Treasury itself. That must be of grave concern in the TUC and in the trade union movement. Do you have a message to the government about how to deal with this question of pay cuts and pay restraint when people’s living standards are being severely squeezed?

Frances O’Grady: “They need to take a long, hard look at themselves in the mirror, and frankly, I think they should be ashamed of themselves. This kind of issue of double-standards and double-talk, of praising key workers to high heaven, and then proposing that their real pay should be cut, I think people are sick and tired of the hypocrisy of it, frankly. And, as you’ll be aware, strikes are always the last resort, particularly where workers have a sense of vocation, it’s never an easy decision for them, and nobody wants to get there. We could get around the table and sort this out. But I think the government should be under no illusion that there is hurt and there is anger, about the way key workers have been treated.”

“They need to take a long, hard look at themselves in the mirror, and frankly, I think they should be ashamed of themselves”

Frances O’Grady argued that the government’s attitude to trade unions was making wage improvements harder: “We’ve heard a lot from the Prime Minister about wanting to see wages surge, well the one thing they’ve never tried is boosting workers’ bargaining power and it won’t grab the headlines but last night [Tuesday 14 December], the government laid the regulations for the so-called unfinished business on the anti-trade union act, that is designed to tie unions up in ever more red tape and frustrate unions being able to represent working people which is what we exist to do. Now, if you were serious about getting wages rising again, you would recognise the key role that unions have to play just as the governments in New Zealand and the US and plenty of other countries have done, and in our case that call for fair pay agreements, starting with social care, because my goodness me, they’ve earned it, that would be a great place to start. So, you know, I would ask the government to listen up and think again and start treating public servants and key workers with some respect.”

Simon Fletcher: Yes, because in truth, the pressure for an increase an increase in pay is not an inflationary pressure, it’s a response to inflation, and actually at present it’s a response to years and years and years of pay being squeezed. And it’s just going to continue.

Frances O’Grady: “Yes, well, I have to constrain my impatience with this attempt, in some quarters to talk up the risk of a wage-price spiral. (Laughs). I mean, frankly, you do not need an O Level in economics to see that real wages have been suffering for years and years. In fact, in Rishi Sunak’s own budget in the small print [there was] buried away a recognition that real wages in fact, I think it said were going fall this year, and we’re going to stagnate but the next five.

So do us a favour, we’re not stupid, trying to blame workers for inflation is frankly, a very poor joke. On the contrary, we need to address that issue of living standards and boosting demand.”

And she senses a shift amongst the workforce:

“I think there is a new mood amongst working people, I think something has happened in people’s heads. You know, they have put up with so much, they’ve been so dedicated, without any respite, by the way, through this crisis. It’s astonishing, the dedication, that people have shown and at the same time, they’ve seen other people getting rich on the back of this pandemic, through those VIP covid contracts. And It’s sickening, and I think something has shifted in people’s heads. And we’re beginning to get that feedback through our unions, through those consultative ballots that people have had enough. They’re not going to be taken as mugs.”

Simon Fletcher: So we’ve got wages squeeze, inflation, pressure from the Treasury over public sector pay, inadequate sick pay, and the absence of updated furlough. And then in a number of sectors are running arguments over pensions. All of that combined is a big problem for those the workers themselves but also a massive challenge for the trade union movement. How does the trade union movement meet this unfolding challenge?

Frances O’Grady: “I think there is a real sense in the trade union movement that we are more than the sum of our parts, and that when we work together, we can achieve more than any individual union can alone, so it might be an old fashioned word, but it means a lot for us and it’s about solidarity.

“I’m not going to lie I think we have a challenge to build workers’ confidence that we don’t have to accept this, that workers do have a right to be rewarded and treated fairly. But we are seeing some of those wins,” she argued, reflecting on cases that had been discussed by the TUC’s general council: “From Clarks, where actually Community has achieved a real pay rise for a number of workers when of course they were threatened with fire-and-rehire and wage cuts, to Weetabix. We’ve seen various bus companies. There’s a whole range of wins that unions are notching up.

“I think we haven’t seen the official figures yet but I’m pretty sure that that mark-up of union membership in terms of good pay and conditions is about to get sharper. And there’s a clear message there isn’t there, that yes, unions can achieve more by working together and so can workmates, joining together in the union is still the best way to get decent and fair pay.”

On this I asked Frances O’Grady for her thoughts about Clarks and fire-and-rehire, subjects that we have covered here before. Recently the Labour MP Barry Gardiner took a Bill to the House of Commons to seek to outlaw the practice. On one hand, we have seen the downside of the fire-and-rehire tactic being used during the pandemic.  On the other hand, there has been a higher public profile for the issue. Clark’s is a recent example of that – it is a very high profile, high street brand.

Frances O’Grady: “I think there is a kind of sense of public shock, in fact, that we were seeing some very big household names deploy such ugly and, well, obscene tactics in terms of their own workforces. When in so many cases, there was very clearly no financial reason to do so. They couldn’t even claim that, it was it was shocking. But I think I take great heart from what was a very well-organised pushback against that, that I think if any other employer was thinking about it I think they might think twice now, because they’ve seen the strength of that response. But yes, of course, we have to change the law to make it clear, but no employer should be able to get away with that treatment.

Barry Gardiner’s Bill was a great opportunity for a government that expressed the same disgust at the practice as the opposition, and yet when it came to it seemed to find every excuse under the sun not to vote for a bill that was put before it. And what’s also worrying and again, this comes back to a question of trust, we’ve been waiting two years now, at least two years for an Employment Bill that was promised to make Britain the best place in the world to work. Where is it? And how come laying those sneaky regulations to tie unions up in more red tape was a priority and bringing forward an employment bill to deal with the obscenity of fire and rehire, zero-hours contracts, false self-employment and introduce positive rights for unions to organise and to represent workers – how come back is still apparently not a priority for this government? How many more cases do we need to see?”

There is real anger from the TUC’s general secretary about inequality within the injustices of the economy: “this isn’t just an issue of workplace fairness. As the TUC showed, workers on insecure contracts are twice as likely to die from coronavirus as those on steady contracts. Now, we’ve been campaigning hard for a public inquiry to address this and many many other issues. But what no one can deny is that black and ethnic minority workers, key workers, very often on low pay, very often on zero hours or insecure contracts, have been far, far more vulnerable to hospitalisation and death. And this to me, is a national emergency. Injustice is jeopardising the health of workers who are absolutely essential to take care of the rest of us. Why doesn’t the government see this as a priority? Why aren’t their lives valued?”

Expanding on my question about the challenges and opportunities for the labour movement, I asked about building trade union strength in the digital age, how you get more recognition agreements with companies that are resisting them, and how you unionise places like Amazon.

Frances O’Grady: “What we’ve seen during the pandemic is thousands and thousands of workers turning to unions and joining for the first time and seeing unions as the best line of defence for their safety they health, their pay packets, their job security. So we have been growing for the last four years in a row, not as fast or as much as I would like, but nevertheless, it’s in the right direction.”

She stressed that like everybody else, the pandemic brought its challenges for the unions but it had also opened up other ways of organising. She points to the teachers’ union, the NEU, organising a zoom call with half a million people on it. For Frances O’Grady, advances such as that raise the question for unions of “figuring out how to convert that kind of mass engagement into finding and supporting new activists, new leaders to build the organisation sustainably. So and of course, you know, we’ve also been supporting our unions through online organising to boost turnout in ballots because that’s about our democracy. We are not going to stand by and let it wither on the vine because of anti-union legislation that makes it hard for us. Well, you know, it’s always been tough. I think our foremothers and fathers, to be fair, probably had it a bit tougher.”

Whilst emphasising successes and opportunities, Frances O’Grady points to the need for existing forms of organising alongside the new ones, stressing the importance of “face-to-face engagement and organising” to understand the needs of trade union members.

Before concluding, we took the opportunity to step back and consider some of Frances O’Grady’s wider experiences as TUC General Secretary.

Simon Fletcher: In your time as general secretary, you’ve seen three Tory Prime Ministers, three Labour leaders, three general elections, a referendum on Brexit and now a global pandemic. It’s not a very quiet life, is it?

Frances O’Grady: “I know I did see the Prime Minister a couple of weeks ago and look what’s happened since. I kind of thought, I wonder if he thinks I’m a jinx!”

Asked what conclusions she had drawn along the way, she was very clear: “It absolutely confirms my internationalism, for one, on every level.” She gave a highly relevant immediate example: “a real urgent pressing issue – we are always going to see new variants emerge unless the whole world is vaccinated and fairly. It may be very difficult for some right wing people to contemplate but we need intellectual property rights waived on the vaccines so that poorer countries can get the production they need to get support with developing public health services, that are not for profit in order to get those jabs out there around the world. And, this isn’t just because that’s the moral thing to do, it’s because actually, it’s in our worldwide collective self-interest. So internationalism: it’s never been more important, including of looking at the rise of the radical right as much as the, if you like, the traditional fascist variety. That’s another reason.”

“It may be very difficult for some right wing people to contemplate but we need intellectual property rights waived on the vaccines”

Her internationalism was also part of her perspective on how the economy must change. “We can’t keep digging into the pockets of working people to pay for the infrastructure we need in this country. The likes of Amazon, it’s long past time they paid their fair share. And that does require more international action and more ambitious international action as well as domestic measures.”

Returning to the point about the need for an internationalist approach to the pandemic, we discussed the absence of adequate global action. She referred back to the 2008 financial crisis and made a comparison between the present Tory Prime Minister and the last Labour occupant of Number Ten: “whatever you think about what happened, compare the leadership in the immediate aftermath of the financial crash under Gordon Brown, compared to what we have today – for all the talk of global Britain, it seems to me the UK Government has not shown leadership at an international level, has not brought people together.”

The political context of the last ten years – including all those huge events both here and internationally – raise big questions for the trade union movement. I suggested it was possible to take a pessimistic view about the political opportunities available to trade unionists. I asked if Frances O’Grady could see a route through to a strategy that starts to deliver on the objectives that the unions have long-talked about, whether that is sectoral collective bargaining or the other priorities of the TUC. Again, her approach was positive.

Frances O’Grady: “I think our big, not so-very secret weapon is the strength of our organisation and the breadth of support we have in communities up and down Britain. As I say, we know that what we call for is popular. We know that, we know it would be an election winner for any party that cared to take up, for example, decent sick pay. People get it. Or fair taxes on the likes of Amazon, people get it. They think it’s common sense and should have been done long ago.

“So I have real confidence in our political strategy, in terms of what we’re asking for. There’s also some really interesting work through the nations, through the regions, through the cities, towns, local communities, where in many ways some of the more creative thinking and practical action is happening, including on issues like a just transition for workers to reach net zero.”

Thanks to Frances O’Grady for sparing the time, and to TUC staff for their assistance.

This interview by Simon Fletcher first appeared on https://modernleft.substack.com and is re-published with his permission.

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