Cable’s Ratchet

By Michael McManus, Director, Bell Pottinger Public Affairs

During the Blair-Brown years, workers in the public sector dramatically closed the pay differential with the private sector, whilst also maintaining many of the privileges which once served to soften the effects of lower take-home pay, most notably their pensions. Even in the good times the sustainability of this seemed questionable. Once a financial crisis had struck, followed by recession, all parties came forward with austerity proposals that necessarily would hit the public sector hard. This would always lead ineluctably to calls for strike action, as the current generation of public-sector workers came to realise they were never going to enjoy the full range of benefits their predecessors took for granted.

Another effect of the Blair-Brown years was the ascent of a new generation of left-wing trade union leaders. There was little love lost between the likes of Dave Prentis, Paul Kenny or Bob Crow and New Labour. Their relationship with the coalition government borders on expletive deleted. Although the Tories in opposition toyed extensively with the idea of further trade union legislation, notably the introduction (and possible imposition) of no-strike agreements in certain indispensable public services, in both the 2010 Conservative manifesto and the Coalition Programme for Government, this is a dog that did not bark or even whimper.

So why now, and why Vince Cable? The first question is easily answered. On 30 June a number of unions (mainly in the public sector) are planning a “day of action”, and there are intimations this is intended to be the first of many such days. If a battle of wills is beginning, neither side wants to be the first to blink. The Government is getting its retaliation in first. As for the second question, many people’s initial response to Vince Cable’s speech is to believe he is simply seeking to rebuild his reputation with his coalition colleagues, to ingratiate himself. There may be an element of that, but there are other forces at work too.

There is an old saying, “Nixon can go to China”. In view of his record of robust hostility to communism, no one could question Richard Nixon’s motives when he travelled to China to meet Chairman Mao. There could be no accusations of fellow travelling. Similarly, coming from a former Labour and SDP member who is perceived as one of the most left-wing members of the current government, these comments acquire more, not less, menace, so far as the trade unions are concerned. The full text of the speech (which few people will bother to read) is full of qualifications and makes it clear that further legislation would be an act of last resort:

‘Later this month, we may very well witness a day of industrial action across significant parts of the public sector. The usual suspects will call for general strikes and widespread disruption. This will excite the usual media comments about “a summer” or “an autumn” of discontent. And another group of usual suspects will exploit the situation to call for the tightening of strike law’.

However, Vince Cable is an experienced operator and he must have known from the outset that all of that neatly balanced rhetoric would end up on the cutting room floor when the media headlines were written. Some lines are explicitly designed to be taken out of context and so it was today – and Dr Cable’s warning that the pressure to tighten the law might soon ‘ratchet up’ were also spoken from the heart. He remembers the pernicious strikes of the 1970s and he knows too that everyone associated with this coalition government needs to see the economy back in good shape by the time of the next election. Anything that jeopardises that is to be vigorously resisted – and a wave of strikes, in either the public or the private sector, could be ruinous to the medium-term prospects for an economy that is recovering at last, but remains delicate.

Dr Cable does not lack human sympathy with those whose expectations have been hurt by the tough decisions this government has taken, but he evidently does lack political sympathy for the trade unions themselves. When he says ‘should the position change, and should strikes impose serious damage to our economic and social fabric, the pressure on us to act will ratchet up’, the implied threat should be taken very seriously indeed; and when George Osborne affirms that Vince Cable is speaking for the Government, he means that too.