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Reclaiming the debate on enterprise

Posted on July 07, 2017 by Tom Healy

Tom Healy, Director NERI
Tom Healy, Director NERI

The key to a flourishing society is an economy that works for all people and not just the few.  And the key to an economy that works for all is democracy in the workplace and in the political institutions that govern the market. [This is the text of a speech I gave at the 2017 Biennial Delegate Conference of the ICTU on 5th July 2017.)

Too often, we see whole communities, families and workers torn apart by decisions made elsewhere by faceless and nameless persons or entities that own and control the bulk of wealth. The crisis in housing, which affects the lives of many across the UK and Ireland is a case in point. A dysfunctional and unregulated lending system coupled with speculative investment in land and property lay behind the crisis of 2008-2010 especially in the Republic of Ireland. As property values recover, significant tracts of land and property are falling into the hands of vulture funds who pay very little tax. We are seeing the rise of a new class of landlords interested in short-term buck and not sustainable housing for the majority.

Housing accounts for a very large slice of weekly income for many families. As new housing supply is at a critically low level, still, in the Republic of Ireland, rents and house prices are soaring. The idea of owning or renting a home relatively near where you work or where you have the greatest family and community support is beyond the dreams of many young people today. While the dismantling of the welfare state and the role of social housing is not as far advanced in Northern Ireland as it is in the Republic we see a major crisis looming in the quality and supply of housing here in Northern Ireland.  The quality of accommodation and the responsibility of the whole community to provide for a basic human need needs to be centre stage in public policy.

The introduction of land value tax as advocated by NIPSA in its recent research report on housing is very important. Likewise, the timely introduction of a vacant site levy in the Republic of Ireland is part of a plan to shift the supply of land towards productive investment now rather than speculative gambling.

I suggest that housing is the greatest social policy failure in the Republic of Ireland. However, Northern Ireland is not far behind. Statutory homelessness has increased at a steady rate since the early 2,000s – even before the recent economic crisis. It is well in excess of that in Great Britain. At the root of the crisis is the public policy addiction to housing as a commodity and not as a human need for a home.  This explains why investment activity in the area of social housing led and funded by public authorities is well short of what is needed. And EU fiscal rules have reinforced the crisis in public funding in the Republic.

In the case of the Republic, policy has failed to respond adequately to the scale of the problem that is emerging.  In recent months together with Congress, the NERI has been discussing ways of moving forward.  The instalment of what we have called a European Cost Rental Model could be a game-changer in the Republic. This model would allow for full cost rents on quality, secure and mixed-income tenancies. This would free up new supply and exert downward pressure on rent increases. Affordability would be within reach for workers – young and old.

As the outgoing President of Congress, Brian Campfield, said yesterday in his address: 'The solutions we have been pursuing, in health, in housing and in the ownership of Irish Water are effectively socialist solutions.'.

At the core of a new economic policy is the role of workers and enterprises.  I suggest that the trade union movement cannot afford to let the various agendas of ‘competitiveness’, ‘productivity’, ‘public sector reform’, ‘corporate governance and regulation’ and ‘innovation’ be monopolised by those hostile to the interests of labour or social equality.  We need to enter that debate with vigour, with ideas, with well-crafted analysis and even more importantly – solutions, proposals, policies that show there is an alternative.

An effective industrial strategy is based on empowering workers and communities. This could take many forms including:

  • Community ‘third-force’ banking to offer real choice and service to households and small and medium-sized enterprises
  • Investment in cooperative enterprises to provide energy from renewable sources
  • Empowering frontline health service workers in delivering better community health with budgets prioritised towards prevention and frontline community care.

An economy that works for workers is based on high productivity, high skills and wages that match productivity and decency of living standards. It is rarely acknowledged by those who think they own the ‘competitiveness and productivity’ agenda that some of the most successful economies and societies in the world are in Scandinavia where a dynamic enterprise culture and social equality sit well together. Could it be that a strong trade union movement, among other factors, is a significant historical factor in the success of the Nordic model?

Even small open economies such as those on the island of Ireland are not entirely at the whims of international trends and decisions made elsewhere. A trade union led analysis and constructive proposal on the need for an enterprise strategy could cut the ground from under the worldview that wages must be cut or curtailed, the inexorable drive towards outsourcing and privitisation. All the better if these efforts are united and coordinated at international and EU levels.

We need to think globally and we need to join research, thinking and policy development with similar minded institutes and trade unions across Europe.  A democratic, social and inclusive Europe is possible. Maybe Brexit will not happen after all! Maybe the EU is reform-able after all? Or, maybe the nature of the EU will change radically towards one of two things: a United States of Europe with a common fiscal, monetary, social and military policy, or, towards a much looser association based on cooperation principally in areas of trade and the ‘four freedoms’.  We live in interesting times and many of the choices and assumptions we made up to now are up for grabs.

The biggest challenge remains that of ensuring an environment that is sustainable. This is why the Just Transition project of Congress is so important and why we need to apply ourselves, more than ever, to new approaches to economic and social development and not just an increase in GDP. The Trade Union movement is about defending and advancing the interests of workers today including those who are members of unions. But, it is not limited to that. The trade union movement also belongs to those not yet born who will be or might be trade union members in the future. This is why sustainable development must be a centrepiece to everything we do. It is a matter of inter-generational solidarity.

 

ENDS

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