News analysis Unions prepare to resist American practices

21 Mar 02
At first glance, there is little to connect the near riot by supposed anarchists outside Barcelona's Palau de Congressos convention centre at the European Union summit last weekend and the serene, grandiose surrounds of the Marriott Hotel, Central London,

22 March 2002

But for those with more than a passing interest in the future of the public sector in the UK, there was a very simple, yet important, link.

The display of displeasure in Barcelona was preceded by a quieter protest over workers' rights by thousands of European trade unionists, many representative of the continent's public sector.

Two days later, Nick Raynsford, the UK's local government minister, addressed an audience of council representatives at a New Local Government Network conference in London on precisely the issue Europe's unions are concerned about. His remarks, however, will have done little to calm the fears of the British contingent.

The unions believe that an alliance of Right-wing EU politicians has embarked on an economic reform agenda that will permanently erode the rights of workers in an effort to restructure Europe's economies along similar lines to the more 'flexible' US model.

There is growing concern that despite Tony Blair's verbal commitment to the centre-Left tradition – which has historically protected employee benefits – he is more than accommodating towards this shift.

TUC general secretary John Monks was so concerned that he was moved to denounce publicly the prime minister's potential economic allegiance with the likes of Italian leader Silvio Berlusconi as 'bloody stupid'.

But the British public sector has already seen evidence of a step-change in employee benefit provision via the debate over outsourcing contracts undertaken by local authorities.

In particular, concerns have been raised over the development of a two-tier workforce. This has been brought about by private contractors employing new staff on different terms to those who came over from the public sector. Unions blame the government for failing to prevent this.

But after delivering his speech on March 18, Raynsford told Public Finance that Labour remains committed to the 'best available' provision of employee benefits.

At the same time, however, he is under enormous pressure – from private contractors, the Treasury and some councils – to engender 'more flexible, innovative and business-oriented' public-private partnerships.

'I think very few people would argue that there's no merit at all in partnerships,' he said. 'Most people recognise that on issues such as e-government, it's not feasible for local authorities to pursue schemes on their own. The question is, how do we develop partnerships that add value, are innovative and deliver what the customer wants?'

The unions say that the government's answer is to allow private contractors to cut operating costs wherever they see fit, regardless of the implications.

Raynsford denies this. 'We don't believe in the bargain-basement approach. We don't think it's right that public sector workers should be given unacceptable terms and conditions. [But] that's not the same as saying that everything has to remain as it is now.'

So is he prepared to ensure that public sector employees' benefits are fully protected under future outsourcing deals? The answer is simple: No.

'Once you over-direct, you destroy the potential for innovation [in partnerships]. Then you will not get the real step-changes in terms of service innovation and that would be tragic.'

More tragic, it would seem, than the erosion of employee benefits that have been, unions argue, a major incentive for recruitment and retention in the sector.

So where does all this leave UK public sector employees? Unison staff at Westminster City Council recently voted unanimously in favour of a ballot for strike action over the council's failure to ensure that bidders for a major contract upheld workers' access to the local government pension scheme.

Bert Schouwenberg, the GMB union's London organiser, said the situation is 'no more than a crude cost-cutting exercise' and that 'Westminster has sacrificed our members' long-term security for the sake of a quick fix'.

He also believes that Westminster's staff will not stand alone as the debate over private contracting intensifies. While the shift towards US-style economic flexibility continues, therefore, the irony of Tony Blair's pursuit of American practices is that it could be undermined by an employee right that rarely applies to the States' public sector workers: the right to strike.


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