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ОглавлениеIntroduction: the crisis and austerity neoliberalism
But in banking, as in capitalism in general, it’s one rule for the elite and another for the rest of us. On the day Deutsche Bank began making thousands of employees redundant, some managing directors at the company’s office in the City of London were being fitted for suits that cost at least £1,200. Tailors from Fielding & Nicholson, an upmarket tailor, were pictured walking out of the bank’s UK office with suit bags. Ian Fielding-Calcutt, the tailor’s founder, and Alex Riley were there to fit suits for senior managers in spite of plans to cut 18,000 jobs worldwide. Deutsche’s chief executive, Christian Sewing, has repeatedly said how much he regretted the decision to scrap a fifth of his global workforce. But it did not stop him paying out €50m in golden handshakes to top executives since 2018. (Roberts, 2019)
Estimates of the size of the UK bank bailout range between £289 billion and £550 billion – or nearly £10,000 for every British resident – exceeding the £203 billion of tax that the sector paid in the five years up to 2006–2007 … by the end of 2009 the total value of bailouts in the US, UK and euro area equalled $14 trillion, or almost a quarter of the world’s gross domestic product. (Sayer, 2016: 229)
We know that there’s appetite in the Conservative party for a bonfire of workers’ rights. (O’Grady, 2018)
Welfare reform employment relations and labour discipline
The 2008 financial crisis and the near collapse of the financial system brought about a response from nearly all developed and developing capitalist countries that is referred to as austerity; this is generally viewed as a strategy for cutting back public expenditure in order to reduce public debts. This was based on thinking by the dominant elites that balancing finances was a crucial factor in bringing about further growth. Sacrifices had to be made for the greater good. We are now living in an age of austerity. While the term austerity is generally used to mean public expenditure cuts, as will be argued in this book, there is more to it. Richard Seymour defines austerity as comprising several elements (Seymour, 2014: 3–4). First, it is focused on reducing government budget deficits through a combination of public spending cuts and usually regressive tax hikes. Austerity is integral to neoliberalism (see Chapter 2 for a more detailed definition), which can be defined as:
… an economic policy regime whose objective is to secure monetary and fiscal stability and that is legitimised by an ideology that holds markets are best treated as self-regulating. This has allowed not merely the ‘restoration of class power’ analysed by Harvey, but also a dramatic redistribution of wealth and income in favour of the rich. (Callinicos, 2012: 67)
Or put in a different way but making a similar point, Mark Blyth observes that austerity ‘is not just the price of saving the banks but the price that the banks want someone else to pay’ (Blyth, 2016: 7).
Second, the ‘disciplining of labour’ is a key element of the austerity ‘growth project’ in terms of restricting its agency and capacities of mobilisation and resistance. This is facilitated by curtailing the bargaining power of labour via industrial relations and employment regulation. In addition, welfare and labour market policies involve the increasing use of conditionality in terms of reducing access to benefits and restricting the capacities of benefit claimants to negotiate and challenge the welfare system (see Umney, 2018). Welfare conditionality holds that access to certain basic, publicly provided, welfare benefits and services should be dependent on an individual first agreeing to meet particular obligations or patterns of behaviour (Welfare Conditionality Project, 2018a).
The disciplining of labour in terms of regulation at work and through welfare are often conceptualised as quite separate processes in both social policy and industrial relations debates. They are, however, closely interlinked. Colin Crouch (1999: 437) states the
term for ‘social policy’ in French and Italian discussion refers to both the welfare state and industrial relations … Historically, both institutionalized industrial relations and the provision of various social benefits were a response to the predicament of the growing new industrial working class, protected from the insecurities of the capitalist labour market.
This inter-relationship between employment relations and welfare is a central focus of the book. One of the fruitful aspects of the work of Esping-Andersen (1990) on his comparative welfare regime analysis is the way he draws out the relationship between labour movement power/influence and the regime type. For example, the relatively strong coordinated industrial relations systems of Northern Europe have shaped in turn more redistributive welfare systems which are characteristics of the Nordic countries (see Chapter 7 on Denmark).
Brandl and Traxler (2004) draw out in more detail these relationships:
•Employment effects of collective bargaining have an impact on the welfare state insofar as unemployment benefits are provided by the state.
•Collective/individual wage agreements even more directly affect the public welfare system when the level of and change in social benefits is formally linked to wage movements, which in turn impact on in-work benefits.
•Welfare states influence industrial relations when establishing social protection against the risks resulting from the labour market. For example, unemployment benefits act as a cushion for unemployed persons in order for them to seek work. Where there is no compulsion to take up work they can wait and thus enhance the bargaining power of labour, because there is less incentive to undercut wages and labour standards. However, intensive conditionality can mean that the bargaining power is weakened as welfare conditionality guarantees a ready supply of cheap and compliant labour who can replace workers who are deemed ‘too expensive’, militant or organised.
•The interrelation of industrial relations and the welfare state becomes most evident when their regulations target the same subject. For instance, provisions for sickness benefits may be endorsed in social policy legislation and/or collective agreements. Negotiation around health and safety, holiday entitlements, maternity rights and other forms of social benefits can ‘spill over’ into areas of social policy.
•Unions organised in the public sector (employment services, local government and health sector) pursue defensive and offensive strategies to retain employment and services to the benefit of more disadvantaged groups more reliant on the welfare system.
•Union anti-privatisation strategies and campaigns around welfare and public services in terms of retaining service levels and quality, has an important impact on claimant experience of the welfare system.
The most coercive influence of welfare conditionality on employment relations as outlined earlier is the way it reinforces contingent work and undermines wage bargaining. In turn keeping minimum wages low will indirectly influence benefit levels and social security (and vice versa). Weak representation and engagement of trade unions in terms of welfare policy formation can mean that benefit cuts are easier to implement. Conversely, strong trade union presence in the public services can mitigate the impacts of austerity as they struggle and bargain for the retention and improvement of services. The trade union movement has campaigned and created the political space for the implementation of a minimum wage, which benefits those claimants moving from welfare to work.
Since the 1990s, conditions for accessing benefits have become more restrictive; there has also been a tendency to use sanctions (for instance, withdrawing benefits if claimants do not comply with conditions) as a way of disciplining and punishing claimants. Welfare strategies are work-first: they prioritise accessing employment over other policies such as employment support and training. In this way, ‘welfare conditionality’ becomes an important means of regulating the Reserve Army of Labour (RAL). For Marx (1973), the RAL comprises those people who are unemployed, and a segment who are at the margins of the labour market who tend to move in and out of work. He argued that a key function of the RAL is to keep wages down, increase the competition for work and exert discipline on labour (Jonna and Foster, 2016; Wiggan, 2015). The shift towards work-first policies away from Active Labour Market Policies (ALMPs, or activation), which incorporate vocational training, intensive social support and employment training, has also been driven by austerity (Kalleberg, 2018).
Following Farnsworth and Irving (2018) (see also Dukelow and Kennett, [2018]), there are several dimensions and trends following the 2008 crisis which can illuminate the way welfare reform and employment relations are interlinked.
Financialisation has increased its role in the development of the employment relationship, of which work-first policies play a pivotal role. Many firms have chosen to financialise their operations by investing in derivatives and credit markets for a quick return on investment. Managers prioritise the distribution of dividends for the shareholders at the cost of squeezing production, cutting wages and ‘downsizing’. The result is the maximisation of bonuses and profits in the short term at the expense of the wage bill. Top earners have improved their position. For example, on average the wage income share of the top 1% of income earners rose by 20% over the last two decades, while the wage share of the lowest educated slumped (Mercille and Murphy, 2015: 15). Deregulation of labour markets, labour flexibility, capital mobility and global finance are key sources of wage stagnation. Several writers suggest that welfare conditionality and the offensive against employment rights are closely interlinked. Work-first policies adapt people to low-waged employment and, when combined with deregulation of labour rights, succeed in strengthening capital control over the labour process (Grady, 2017: 282).
Work-first policies undermine wage bargaining and reinforce insecure work. This is intended to have the double effect of undercutting wage demands but to serve the low-wage economy with ‘compliant’ labour (Raffass, 2017). In the UK, Universal Credit (UC, launched in 2013) is the major Conservative government welfare reform launched on the back of ‘making work pay’. The stated aim of UC is to ‘simplify’ the benefit system, as it merges a number of different benefits into one benefit. UC also involves an in-work benefit (work allowance) to replace working tax credits. Access to both in-work and out-of-work elements of UC are subject to demanding work search and progression requirements reflecting the way the welfare reform agenda has involved a stricter conditionality regime as a way of moving people into work (see Chapter 3). In this way the attack on employment rights works in tandem with work-first policies: the two are mutually reinforcing processes.
The financialisation of household debt is due to easy access to credit and mortgages during the housing boom reinforced by the trend towards wage stagnation since the 2008 crisis. Consequently, households are more and more pushed towards private indebtedness and credit consumption. This has been compounded by the cuts in welfare support and the social safety net. Rubery (2015a) refers to this as the shrinkage of the social state in relation to all its four main roles: as a source of income support; as a provider of free or subsidised public services; as a direct employer; and as a defence against marketisation of society. The new ‘welfare regime’ is downgrading or even phasing out benefits as a safety net. Women, according to Rubery, are disproportionately impacted by these changes. Reproduction services have become financialised, particularly in relation to pensions, care packages, insurance and mortgages, and this has had the impact of fuelling household debt, exacerbated by the cuts in welfare. Given that the public sector is a major source of employment for women, austerity cuts have led to greater instability and uncertainty in terms of employment, career routes and pay (Himmelweit, 2016: 11).
Geography plays an important role in the political economy of welfare and work. Localities (cities and city regions) are important sites for the delivery of welfare-to-work and the reproduction of labour via local welfare services and in turn they shape the contours of labour markets and precarious work. There is also plenty of evidence to show that cities and regions are bearing the brunt of austerity (see Etherington and Jones, 2018; Gray and Barford, 2018). While the rise of insecure and precarious work is an international as well as national phenomenon, there are distinct geographical outcomes and processes at work particularly within deindustrialised cities (see Chapter 5 on Greater Manchester and Chapter 6 on Sheffield Needs a Pay Rise Campaign). Employment restructuring in ‘traditional’ industries has given rise to a high concentration of new jobs in the service sector, which tend to be low paid and require little vocational training. Polarisation and segmentation of the labour market has resulted, and this has been exploited by industry with support through state infrastructure investment and welfare-to-work policies. The ‘de-unionisation’ of cities and regions involving lower union densities and collective bargaining coverage has led to gaps in employment protection (or its enforcement), reinforcing and accelerating labour market insecurity and inequalities. From the perspective of labour, the processes for negotiating around employment rights and social protection are highly constrained. However, as discussed in Chapter 4, this needs to be viewed as continually subject to negotiation, struggle and contestation (Cumbers et al, 2010).
Class and agency in welfare and employment relations
The role of agency – how neoliberal politics are offset, modified and resisted by trade unions and other social actors – is of crucial importance in our understanding of the implementation of welfare policies. Central to this is an understanding of class and class relations. I have argued in this Chapter that central to the politics of austerity are the changes to the capital/labour relationship. Within a Marxist approach, capital (the capitalist class who own the means of production) are solely concerned with extracting surplus value and maximising profit; for labour (the working class defined as wage labour) the primary interest is to wages to secure survival and attain a standard of living. This will include ‘the social wage’ and welfare services essential to maintaining or attaining the reproduction of labour power. It is not difficult to see how these interests can be and are fundamentally in conflict, and how wages and welfare are a terrain of struggle between classes. Inequalities in wealth and income are important measures of the nature of class relations and struggle. In the current period, austerity has underpinned and driven the increasing power of dominant classes as observed by Callinicos, cited earlier (see Umney, 2018).
While there is not a rich vein of work in social policy with respect to the role of agency, there is a body of work in Marxist tradition which has posed the question of struggle and mobilisation in terms of class and collective politics (Ginsburg, 1979; Lavalette and Mooney, 2000). The post-war UK welfare state was forged from a longstanding struggle by the trade unions and Labour Party for more redistributive employment and social policies, including social benefits, education and the National Health Service (NHS). There should be no return to the poverty and blight that prevailed in the 1930s. At the same time, the settlement or ‘class compromise’ contained some weaknesses, particularly the ideological belief in women’s primary responsibility for the home. This assumption regarding gender roles was generally accepted within the Labour Party and some sections of the trade union movement (Blackford, 1993: 220).
This historic legacy of the construction of the UK welfare settlement is important in terms of framing the social divisions and struggles over welfare. As Williams (1994) emphasises, the link between family, work and nation must be understood in relation to a diversity of social divisions – not only gender but also ethnicity, and class (although disability, sexual orientation and age can also be included). Such struggles are influenced ‘not only by class relations but also, relatedly, by the relations of other forms of social power – racism, nationalism, male domination and so on – which influence both the demands of the working class and the response of capital and the state’ (Williams, 1994: 60). In this way, I assert that the nature of oppressions (and the ‘class struggle’) must be related to the concrete experiences of social life within capitalism (Lavalette and Mooney, 2000: 8).
Trade unions are important ‘actors’ or source of agency in the class struggle as they act as a fulcrum for solidarity within the workplace (and reduce competition within the labour market); they also articulate worker resistance and negotiation around the employment relationship (Hyman, 1989: 36). Although trade unions developed through struggles around workplace issues, they have also pursued concerns relating to social reproduction, and social and welfare policy. As Fine states, trade unions will:
… often be drawn across the nebulous and shifting boundaries connecting economic and social reproduction. The wage, after all, is only the most immediate source of revenue for sustenance of the working class family, whose capacity to provide able and skilled labour depends upon the range of services that are now commonly thought of as constituting part and parcel of the welfare state, albeit unevenly by country and type of provision (housing, education, health etc). (Fine, 2003: 91)
The debate around trade union survival has been recently focused around representing outsiders as well as ‘insiders’, their core membership within the workplace (Clegg et al, 2010). The UK trade unions face many challenges in engaging and mobilising ‘outsiders’. Traditionally, links between trade unions and social security claimants in the UK have not been strong. Until recently there has been a tacit acceptance of the principles of welfare conditionality and there has not been the same degree of argument about benefit cuts as there has been around wages and the minimum wage. Very few Trade Union Congress (TUC) annual congresses have given welfare reform any priority and, with the exception of the Public and Commercial Services Union (PCS), there was tacit support from the TUC and trade unions to the operating principals of the New Deal work-first programmes under the New Labour government. Only at the later stages of the last New Labour government did the TUC mobilise opposition to the 2009 Welfare Reform Act, which in many ways shaped the post-2010 politics of welfare under the coalition/ Conservative governments (see Chapter 3). In many respects there are signs of some shift in the way trade unions are responding to welfare reform by engaging and campaigning with marginalised and disadvantaged groups, on which Chapter 4 will focus. However, at the same time it is important to recognise the many initiatives that trade unions are involved with which have a direct or indirect impact on ‘outsiders’ and those who are reliant on welfare services. Trade unions have been at the forefront of defending the attacks on the welfare state and therefore play an important role in relation to the delivery of social reproduction services. An example, the development of the TUC Unionlearn initiative originated in response to the need to address the lack of skills of marginalised workers (Clough, 2017).
The Brexit and COVID-19 crises and the contradictions of austerity
I am writing this book in the middle of one of the deepest political and social crises the UK has witnessed since the Second World War. The December 2019 Conservative government general election victory under Boris Johnson will no doubt pave the way for a ‘no deal’ Brexit and further austerity. In addition to the Brexit crisis, we are experiencing the global COVID-19 global pandemic, which is accentuating this generalised crisis of the capitalist system. I will, however, as a brief postscript, make my own brief assessment of the implications and significance of these events in Chapter 8.
I view Brexit as a logical extension of the austerity growth model I described earlier in this chapter, but which involves a deepening of the crisis and contradictions of austerity neoliberalism. The COVID-19 crisis has exposed in a fundamental way the contradictions of austerity and the neoliberal growth model even further. Neoliberalism, as I analyse in Chapter 2, emerged as a strategy to restore the profitability of capital post oil crisis of the 1970s, but which has failed spectacularly, evidenced by the 2008 crisis and ongoing structural problems of the economy. Austerity was a key element of this as part of a politics of redistribution in favour of certain class and capital interests. The contradictions take a number of forms. I will highlight two. The first, outlined by Callinicos and citing Georg Lucas (1971), capitalism has a tendency towards a
deepening rationalisation of specific aspects of society accompanied by the growing irrationality of the whole. In the present case, the banks have acted ruthlessly to pursue their interests as shaped by the existing structure of financialised capitalism. The problem is that this whole structure has at the very least been gravely weakened by the crisis. (Callinicos, 2012: 74)
The Conservative government’s COVID-19 policies attempt to insulate financial and ‘rentier’ interests from the crisis while millions of people are thrown into unemployment, poverty and insecurity. Christine Berry, writing in the Guardian (2020), argues that the lending policies of the bail-out will mean that many small and medium businesses, and individuals, will have to pay back their debt while ‘virtually no sacrifices have been demanded of banks, landlords or profitable corporations, such as utility companies. The only people in society not being asked to share the burden are “rentiers”: those who make money by owning assets they can charge others to use’. Second, fiscal consolidation and the attack on the welfare state and other public services and infrastructure undermine capitalism’s requirement for the reproduction of labour and capital accumulation: the deeply rooted logic of state spending and interventions conflicts with neoliberalism’s attempts at public spending rationalisation. Conditionality and welfare cuts, combined with long-term spending reductions on health and social care, distort the labour market, leading to increasing segmentation, exacerbating poverty and impoverishment (Gough et al, 2006: 182).
MacLeod and Jones (2018) describe how the long-term impact of neoliberalism and austerity on working class communities and the regions has led to large scale disaffection in the political establishment:
New Labour had intervened with public money to save Britain’s major banks while facilitating the Bank of England to feed ‘quantitative easing’, in effect boosting the London job market by 18 per cent while further enhancing the lavish spending power of the capital’s über-rich … Further, through punitive cuts in tax credits and housing and disability benefits alongside savage reductions in local government funding … the austerity state has impacted disproportionately on people in older industrial areas, jaded seaside resorts, and now bypassed towns such that ‘by 2016, there were causes enough for a protest vote’. (MacLeod and Jones, 2018: 119)
Taking a similar view to Callinicos, they go on to comment on the divisions within the ruling elites over the direction of travel in relation to the ‘growth model’ when they suggest that ‘the Brexit conjuncture witnessed ideological divisions within an elite that, while generally supportive of further adherence to a neoliberal accumulation regime, had alternative views about how it might be successfully advanced in the UK context’ (MacLeod and Jones, 2018: 119).
Peter Taylor-Gooby (2017), in his assessment of the impact of Brexit on the UK welfare state, perceptively points out that through Brexit, elites are positioning the UK economy within an increasingly globalised economy. It is an example of a ‘race to the bottom’ with the potential for market competition policies being used to reduce even further social protections. Furthermore, employment rights, labour regulation and trade unions are the target of the dominant Brexit class. As Frances O’Grady, General Secretary of the TUC has stated: ‘the only employment rights, commitments that come out of the future relationship with the EU are in the Draft Political Declaration. Unfortunately, this section of the agreement is non-binding, it is not worth the paper it is written on’ (O’Grady, 2018).
Of course, the divisions among the working class are an important factor. The Brexit campaign, when it became more fixated around race and immigration, was cynically exploiting social and ethnic divisions. However, as emphasised earlier, these divisions are created and inextricably part of neoliberal capitalism. They are also part of Europe as a failed project in terms of delivering social and economic benefits (Gumbrell-McCormick and Hyman, 2018). As Jamie Gough (2017) argues, people’s resentment against immigrants and even benefit claimants is a product of austerity, poverty, inequality and oppression, as well as a result of a lack of a coherent alternative socialist strategy. This raises an important point about the nature of critical voices and the range and possibilities of alternatives to austerity neoliberalism. This will be explored in the concluding chapters of the book.
Origins of the book
The book arises from my longstanding comparative research on welfare and labour market policy in the UK and Denmark. What is striking about the Danish model, and indeed other Nordic models, is the role of the trade unions. Narratives on welfare and social policy in the UK tend to ignore the role of trade unions and how industrial relations policies will influence and shape welfare policy. Esping-Andersen (1992) argued that strongly redistributive welfare states are moulded by developed industrial relations and social dialogue. This brings the role of agency or class struggle into the debate. My first publication on Denmark (Etherington, 1998) posed the question of whether the Danish model offered an alternative perspective to the seemingly free-market policies of the New Labour government. This was written at the time of the early days of the welfare-to-work programmes (New Deal for the unemployed): even then my view was that the Blair government had missed an opportunity to develop something more radical with a greater role and emphasis on the role of local government and the trade unions. In fact, the welfare reforms became more work-first and disciplining as they developed, reflecting the dominant neoliberal politics of New Labour.
As argued in Chapter 2, the 2010 coalition government welfare reforms actually display many continuities. At the time of writing, the roll-out of UC is taking place accompanied by unprecedented criticism from sections of the media, trade unions, and social and welfare movements because of its wholescale assault on benefits and social protection. Understanding the nature of response from the trade unions is extremely important. Trade unions are the single largest voluntary organisation in the UK, with over 4 million members; after successive onslaughts by neoliberalism they are still capable of innovation and providing a voice for disadvantaged groups and the working class as a whole in the face of a sustained attack on living standards. They have strengths and weaknesses which this book will explore. Strengths lie in their bargaining activities and capacity to resist austerity and the cuts in the public and welfare services and which are so important for supporting disadvantaged groups. The weaknesses are their low level of presence and activity in large parts of the service sector where poor working conditions and insecure work predominate.
Geography plays an important part of the book’s analysis. As a geographer and researcher on labour market policy, I have been interested in the spatial dimension to state restructuring. Between 2005 and 2007, I was involved with a major two-year Joseph Rowntree Foundation (JRF) project, Devolution and Regional Governance and the Economic Needs of Deprived Localities (North et al, 2007), which examined the extent to which policies and governance structures in national jurisdictions and regional bodies across the UK linked economic development activity to the needs of deprived areas. A key finding of the research was the extent of deprivation and large proportion of people claiming out-of-work and sickness benefits in deindustrialised areas. The uneven geographies of welfare reform and austerity play a key role in shaping territorial politics within the regions. The chapter on Greater Manchester is based on earlier research on the impact of austerity on devolution and welfare undertaken with Martin Jones in 2017 (Etherington and Jones, 2017). Greater Manchester is chosen as a case study as it represents the flagship devolution initiative where welfare reform is a key element of the devolution process.
The book’s focus on insecure work and ‘precarious’ economies arises from my interest in the way welfare reform impacts on insecure work. This is an important lens under which to tease out the links and relationships between the industrial relations system and welfare policies. From this, the book explores weakness in terms of the lack of employment rights and workplace trade union representation in certain sectors of the economy, and how this has been reinforced by work-first policies, which tend to ‘feed’ workplaces where exploitation and oppressive working practices exist. My involvement with Sheffield Needs a Pay Rise Campaign (SNAP) provided an opportunity to explore these links (Etherington et al, 2018). Many workers in low-paid and insecure work places have travelled the welfare–work system, often cycling between the two, and the research – involving interviews with workers, benefit claimants and trade union officials/ activists – provides insights into how trade unions negotiate and resist insecurity and relate (or do not) to the organisations (community, non-government organisations) and other social movements who act on behalf of the disenfranchised. Sheffield, in common with a number of post-industrial cities, has undergone considerable cuts to social protection and services which are essential to the reproduction of labour. The SNAP research provides a useful case study in terms of the relationship between austerity and labour market insecurity.
My longstanding collaboration with Martin Jones (and later with Jo Ingold) has spawned several comparative publications on Denmark and the UK which have contributed to ideas about the inclusive labour market. Given the plethora of excellent critiques on welfare and work, there is a question of what alternative and progressive strategies may look like. I will make some attempt at this towards the end of the book drawing on previous work on Denmark and the UK (see Chapter 7).
Objectives and structure of the book
Summary
The book provides fresh perspectives on the link between welfare policy and employment relations, and their fundamental impact on social inequalities. This analysis is set in a wider context of austerity and the current employment crisis. Work-first policies, specifically UC, undermines employment rights as welfare claimants are pressured under threat of sanctions into low-paid and precarious work. The book analyses the role and strategies of trade unions and civil society organisations in contesting the reform agenda demonstrating the importance of union organisation and bargaining for welfare policies. The geographies of austerity play a central role in the politics of welfare, with the ‘left behind’ regions bearing the brunt of public expenditure cuts. In the case studies of Greater Manchester, as England’s flagship devolution initiative, and trade unions and civil society organising against precarious work in Sheffield, a more detailed insight into the struggles against austerity and labour market inequalities is provided. A central argument of the book is that an industrial relations model based on coordinated collective bargaining and enhanced employment rights will underpin an inclusive welfare agenda. The final two chapters are devoted to exploring alternatives, including lessons that can be drawn from Denmark’s more redistributive welfare and industrial relations system, and the importance of challenging the austerity narrative where there is an emphasis on the importance of investing in public services and local government as a basis of building a democratic and accountable labour market.
Outline of chapters
Chapter 2 develops a conceptual framework and theoretical concepts on austerity welfare and the employment relationship in two parts. Drawing on theories of class and power resources, I will construct a framework for drawing out the links between welfare and industrial relations regimes in the context of broader class politics and relations. The second part of the chapter provides a more rigorous theoretical analysis of neoliberalism, austerity and uneven development and the changing nature of the state in the context of the global economic crisis. A key element of state intervention in this respect is the way industrial relations policies underpin changing relationships between capital and labour through the attack on employment rights and representation, and the intensifying conditionality within the welfare system. The chapter situates agency and class struggle by exploring the role of actors (trade unions, social movements) and struggles which are involved in negotiating and contesting neoliberalism. Chapters 1 and 2 should be viewed as providing the conceptual and theoretical context to the book.
Austerity, in the form of attacks on public services and the welfare state has underpinned Thatcher’s and New Labour’s radical transformation of industrial relations, social security and the benefits system. This is the focus of Chapter 3, which briefly analyses the political and economic basis to neoliberal policies and how these have placed greater emphasis on the attack and reduction of labour rights, with a brief explanation of the impact of the 2008 crisis and ensuing austerity policies. The election of the New Labour (NL) government in 1997 promised a break from the neoliberal policies of Thatcherism. I will explore in this chapter the argument that while there were important policy shifts, the continuities with the Thatcher economics and social policy reflected neoliberal politics pursued by the NL government led by Tony Blair. In other words, this brand of neoliberalism has paved the way to the market fundamentalism and austerity politics of the current 2019 Conservative administration. The examination of the NL legacy is critical to understanding what I term the embedding of neoliberalism in welfare and employment policy. The chapter starts with an analysis of NL employment and welfare policies and then an overview of the coalition/Conservative government’s reforms. As well as tracking key policy changes, the chapter will cover responses and engagements of key actors in relation to welfare and work including trade unions and social movements
Chapter 4 focuses on challenging austerity and, in particular, analyses the nature of resistance to welfare reform and UC, exploring the critical voices and discourses of trade unions and welfare rights organisations. The UC policy of in-work conditionality puts into critical focus the way austerity and cuts to personal support and skills funding have placed considerable barriers for people to progress in work. The TUC, along with individual trade unions and some welfare rights organisations, has been proactive in challenging the way in-work conditionality and progression is being implemented. Women and disabled people are bearing the brunt of the cuts to social protection and benefits as a safety net. The discussion reveals a wide range of strategies deployed by both the trade unions and civil society organisations which are challenging the discriminatory and oppressive practices embedded in the implementation of policies. Of particular importance is the vulnerability of women to financial abuse in the UC payment system and the operation of the Work Capability Assessment (WCA), which is deeply contested by disability rights organisations.
One of the theoretical arguments of the book is that integral to neoliberalism and austerity is the deepening geographical uneven development as illustrated by increasing urban and regional inequality. Furthermore, the trend towards rescaling state policies with a greater role for local institutions in the implementation of welfare and employment policies has been a defining feature of state restructuring since the 1970s. Devolution and the creation of the Northern Powerhouse is a pivotal part of the Conservative agenda for ‘regenerating’ the regions. Chapter 5 analyses the devolution of welfare policies in Greater Manchester, the government’s flagship devolution initiative. Greater Manchester’s economy has been impacted by deindustrialisation with major socioeconomic implications. Drawing on devolution research in Greater Manchester the chapter explores the way uneven development and the precarious dimension to economic development in the deindustrialised cities is shaped by wider class strategies particularly around ‘Austerity Welfarism’ reforms and waves of labour conditionality. It concludes by identifying and analysing the role of key actors (trade unions, local government, community organisations) who are negotiating and challenging the premise of devolution.
Continuing the theme of analysing the way devolved austerity and employment policies are shaping city region economies and social relations, Chapter 6 explores the link between work-first policies, industrial relations and precarious work in Sheffield. Sheffield was identified as the city with the highest proportion of workers paid below the living wage and, from this finding, the local trade union movement established the Sheffield Needs a Pay Rise Campaign. Work-first policies provide a ready supply of compliant labour into insecure and non-unionised employment. This dovetails with policies aimed at attacking trade union organising such as the 2016 Trade Union Act, described as the ’final coup de grace’ on an already weakened movement (Tuckman, 2018: 104). This raises the question of how the two processes connect and interact – workfare and employment relations. In other words, how are employment rights and unionisation undermined by a process of funnelling labour into low-paid, unskilled jobs? How do industrial and other actors respond and negotiate the challenges of welfare conditionality on employment relations? The chapter draws from work undertaken as part of the Sheffield Needs a Pay Rise (SNAP) campaign in 2018 (Etherington et al, 2018). The SNAP campaign, initiated by Sheffield Trades Union Council (STUC), is linked to the Britain Needs a Pay Rise campaign organised by the national TUC.
For many years I have sought to explore the political economy of welfare in the UK from a comparative perspective using Denmark as a comparator country (Etherington, 1998; Etherington and Jones, 2004a; Ingold and Etherington, 2013). The value of comparison is that it provides insights and a window into the social processes and class forces which configure a particular welfare settlement (in this case the UK). Comparative research also provides insights into innovations and progressive politics that may offer lessons and another perspective on the UK. This forms the basis of the analysis of the Danish system of welfare and employment relations, which is the focus of Chapter 7. In Denmark, social democracy has arisen from a strong trade union movement and the historic legacy of class politics, where many aspects of the welfare consensus based on universal and relatively generous benefits have been retained. Unemployment insurance (UI) operates under the Ghent system, which has a long history in Denmark, whereby the trade unions have traditionally managed unemployment insurance benefits since the 1930s. These benefits are based on individual contributions through employment; in the event of unemployment, unemployed people will receive their benefit from the UI office run by the relevant sector trade union. This also includes the provision of state-supported universal childcare (Ingold and Etherington, 2013). There are features of neoliberalism in the restructuring of welfare in Denmark, including the tightening of benefit conditionality, a more workfare approach to targeted groups, and the implementation of austerity and expenditure cuts in the public sector. However, many aspects of universal welfare are retained, including the model of capital/labour relations through social dialogues, coordinated collective agreements and the provision of subsidised childcare.
Chapter 8 concludes by developing the discussion of the Danish model further arguing for an alternative strategy towards an inclusive labour market and welfare agenda (with some of these ideas contained in the Corbyn-led Labour Party 2019 manifesto). As a postscript, I first make a brief ‘post-election’ assessment arguing how the geographies of austerity and the electoral response from the ‘left behind’ regions played a crucial role in the results. I follows this with a brief assessment of the impact of the COVID-19 crisis. I briefly set out some ideas regarding another welfare and employment model. For example, a central argument of the book is that an industrial relations model based on coordinated collective bargaining and enhanced employment rights will underpin an inclusive welfare agenda. I demonstrate how this works in relation to the Danish model of job rotation. As ‘work’ is in the title of the book it is important to consider critically the meaning of work and that it is not the route out of poverty given that large sections of the population are either not able to work and/or categorised as ‘economically inactive’. How can work–life balance be achieved in an unforgiving labour market? There is no doubt that strong trade unions and bargaining practices can play a role in developing this balance. Defending and expanding the role of democratic and accountable public services, especially local government, is key to the development of a more egalitarian welfare model.
