Unite’s Len McCluskey

By Len McCluskey

With poverty and unemployment skyrocketing before lockdown, the government must act urgently to avoid a disaster – and support millions of workers who are already on the breadline.

In the end, it took Boris Johnson just eight minutes to tell the country it was being locked down again. He didn’t address his government’s dangerous and shambolic handling of this virus, or offer additional help to our NHS firefighting a level five threat ripping through the system, leaving staff exhausted as they deal with the human costs of his government’s dither and delay.

Frankly, it is far from prime ministerial as can be imagined that the people of the country were told to brace themselves for further months in an economic coma but with no attendant support for incomes and health.

There are huge milestones on the footpath we must now follow, and they are coming at people fast.

On Monday, the ban on landlords in England evicting their tenants ends. Later this month, the deadline for applications for the third grant under the self-employed income support scheme passes. And the last day of January brings the deadline for mortgage holidays and the end of the ban on home repossessions.

These imminent cliff-edges are swiftly followed by the closure of the government-backed ‘bounce back’ loan schemes, withdrawal of the £20 a week Universal Credit uplift – a lifeline for many struggling families – and the April end of the job retention scheme.

Rishi Sunak has announced £4.6 billion worth of grants for the hospitality, retail and leisure sectors. Astonishingly though, the chancellor, whose initial enthusiasm for fast and vast action has been replaced by a tendency to last minute limited fiscal crisis-responses that have to be dragged out of him, had nothing to say on jobs and livelihoods. For that, we must await his 5 March budget.

Well, workers can’t wait. The millions on benefits, the low-paid, the self-employed and precarious workers, and their children, cannot wait for springtime stock-taking to know if they will receive longer term income support or be pushed further into poverty.

Fix the furlough scheme for parents and make it clear to employers that they can and should use it.  Deliver the long-promised laptops and internet access, and act to increase statutory sick pay to the level of the real living wage and available to all, Chancellor. If you do not, then you ignore the plight of millions – and with that the recovery of our country.

Almost one year ago Unite first called for emergency legislation to ensure that workers not entitled to SSP receive it from day one if they can’t work because of coronavirus. Nothing has changed, other than the virus has mutated and become even more infectious. And it remains the case that poor workers can’t isolate, and if they can’t isolate the virus can’t be beaten back. A TUC survey has found that one in five people forced to self-isolate and unable to work from home have received no sick pay or wages confirms this.

This virus feeds off inequality, targeting the poor and the vulnerable, sadly to be found in shameful levels in the UK, the fifth richest economy on earth. But this government is making deliberate choices. Its failure to provide sick pay that people can live on and where all workers who need it can receive it is a conscious, ideological act but this pandemic will not be defeated until the diabolical choice between health and income has been removed.

Those of us in the union movement who know from our members exactly the struggle they face were, of course, disappointed that Keir Starmer followed the PM on air last night with a comment that there were ‘no absences’ in his speech. I sincerely hope that this is just a failure to think on his feet rather than a genuinely held belief. I prefer to regard Anneliese Dodd’s media round calling for genuine and full income support as the more accurate representation of where HM’s official opposition stands.
Tomorrow’s debate in parliament must not be hijacked by the few on the Tory benches who have all too readily had the ear of the PM in which to pour their lockdown scepticism. No, this must be where the Prime Minister and his Chancellor talk to the people of the country and for the people of this country, not a self-interested faction that will lead us to greater despair.

Speak for the industries that have gone without long-promised help, supply chains that are trying to get to grips with Brexit, and SMEs trying to figure out how to make workplaces secure amid an airborne disease and need urgent support if they are to keep people in work.

Help them by giving them the certainty that the JRS will extend for as long as needed and in line with a vaccine programme that can see the safe re-opening of the economy. And workers sick with fear need to know that they will not lose their homes and that their incomes will not be destroyed.
The signs so far are not great. For those who still have jobs in our hardest-hit industries, many furloughed on below minimum wage levels – which has to be addressed, now – and terrified of what those cliff-edge January dates will bring, the new package offers no hope. They are, as ever, the forgotten victims of a shuttered high street.

This pandemic will subside, thanks to the genius of our scientific community and heroic efforts of our health workers. But the seeds of a new crisis are already being sown – that of endemic, generational poverty and unemployment.

This government is now commonly referred to as the worst in living memory, riddled with cronyism bordering on corruption and stuffed with incompetents. We need an opposition that turns the spotlight on them, exposing them as unfit for office.

So, I appeal to Keir and his team: take off the gloves. The public will respect you for being strong and decisive, a welcome contrast to the shambles in No 10.

The people of this country have been put through hell by this government. They need a strong and confident alternative. Workers can’t wait.

Blog by Professor David Bailey

Birmingham Business School 

That a trade deal has been at been agreed at the last minute between the UK and EU comes as a huge relief for manufacturing sectors like automotive, which would have faced tariffs of 10% on exports and imports in the event of no deal – an outcome widely viewed as potentially ‘devastating’ for the sector. BMW for example recently stated that a no-trade deal scenario would push up costs by several hundred million euros, and that longer term it would look at where to make the Mini model.

It’s hoped that the deal now gives a green light to major investments in the UK that had been stalled amidst Brexit uncertainty, such as that by PSA in assembling the Vauxhall/Opel Astra at Ellesmere Port, and Nissan starting Qashqai production in 2021 at Sunderland. If so, that’s genuinely good news in securing a new round of model assembly at two plants at least.

But – and this is a big but – this is still a thin deal with major implications and costs for automotive. There are many ways in which UK manufacturing is deeply intertwined with the EU through complex supply chains. Even with the deal, Brexit will create additional costs for auto makers: think of tariffs, customs declarations, certification costs, audits to prove that rules of origin requirements are met, border delays disrupting just-in-time systems, EU customers switching to other suppliers, visa costs for EU workers, and so on.

“Non-tariff barriers will be quite substantial”

And so despite Prime Minister Boris Johnson claiming that the deal ensures “no non-tariff barriers”, this is clearly not the case. In fact, non-tariff barriers will be quite substantial. Various estimates have put the cost of completing customs declarations alone at around £15bn for the UK economy as a whole, for example. And that’s before we get to complying with rules of origin rules.

And even with the deal, automotive firms will want clarity on a range of areas like data flows and the timescale for setting up UK regulatory agencies to take over work from their EU counterparts and so on. On data flows there is a temporary six-month agreement to keep the current rules in place for six months until a new ‘adequacy decision’ is sorted.

Some of the final sticking points in getting a deal over the line were over Rules of Origin in the auto sector and on batteries for electric vehicles in particular. On this there is good news in that there is full bilateral cumulation, allowing UK and EU parts to count towards local content rules in enabling goods like cars to avoid tariffs.

Although the UK’s ask for diagonal cumulation with third countries like Japan, China and Turkey was rejected by the EU, what’s been agreed will be enough for most car makers in the UK to avoid tariffs unless they are importing lots of high value components from, say, Japan.

Interestingly the UK government summary document refers to “modern and appropriate rules of origin” – what this actually means is not clear at this point. What it may imply is more flexibility over how such rules are applied.

One element of flexibility appears to come with the self-certification of rules of origin (according to the EU summary document). Here it appears that assemblers will need to collect and maintain information on the origins of components, but this appears to give assemblers some time to set up systems to collate this information. The same EU document refers to “specific facilitation arrangements” for automotive. The UK government summary document also points to “predictable and low-cost administrative arrangements for proving origin.” All in all, the auto industry will be keen to see what this means for them and whether there will be a grace period.

The UK government summary document highlights that the Rules of Origin agreed for batteries and electric vehicles “will ensure that UK-made electric vehicles are eligible for preferential tariff rates”. I am guessing that this refers to the six year phase-in of the requirement for electric cars (and hybrids?) to have a maximum of 45% content from outside Europe, reducing over time,  from 60% to 55% to 45%. The UK had asked for 70%, so this is a compromise. This could still be tight for some manufacturers when it comes to batteries or high value hybrid systems from outside the EU.

Toyota, for example, might struggle to qualify its UK assembled hybrids for tariff free export to the EU – although it has time to increase local content, such as via its UK engine plant. However, we don’t actually have figures on local content as they were – of course – not needed when the UK was in the single market.

What the deal means is that by 2027, there has to be 55% local content even for battery electric vehicles for these to qualify for tariff free trade between the two. This will pose a particular challenge for UK auto and industrial policy. The UK is lagging behind EU countries in attracting investment in battery making capacity and without a major effort to reorientate the auto supply change, UK car assembly will be increasingly dependent on imported components from the EU to meet rules of origin rules going forward.

Overall, UK automotive will welcome the deal in as far as it goes – after all this deal really is better than no deal for the sector. There will be extra costs for the industry in terms of non-tariff barriers but things could have been much worse. Much will depend on the degree of flexibility allowed and the degree of phasing in. The devil will be in the detail but on first inspection the deal will be welcomed by automotive manufacturers.

David Bailey works at the Birmingham Business School and is a Senior Fellow at the ESRC’s UK in a Changing Europe programme.  This blog was first published at The UK in a Changing Europe Blog site.

See also Unite Comment On The EU-UK Brexit Deal and Manufacturing