Philip Whiteley's Blog

July 11, 2012

Sectarian or Useless – the voter’s choice

Filed under: Uncategorized — felipewh @ 9:42 am

The two main political parties in the UK each receive an increasing proportion of their financial backing from a narrow strip of society: the Conservatives from City-based institutions and Labour from the public sector trade unions. Given that the two parties have alternated power for decades, it is hardly surprising that these two parts of the economy have benefited from favourable legislation and financial support, compared with other sectors.

A generation ago, the unions behaved in an appalling, quasi-criminal manner, culminating in the Winter of Discontent (1978/79). Waves of strikes and aggressive picketing affected both the public and the private sector, leading to the downfall of the Callaghan Government.

Trotskyite infiltrators in the unions damaged UK industry in the 1970s, quite deliberately. Ultra-left activists – often middle-class students fired up by the 1968 revolutions – were sent to the coal, steel or car manufacturing industries to stir up trouble and pave the way for a workers’ takeover. This is not a Daily Mail conspiracy theory; I met some Workers Revolutionary Party veterans in the 1980s who described the process.

After 1979, the Thatcher Government imposed new rules on unions. Paradoxically this had a beneficial effect – requiring votes for general secretaries and for strike action reduced militancy, and gave unions more legitimacy.

Now it is the City institutions that are behaving appallingly. There is increasing evidence that criminal fraud is rife in the financial markets, as the Serious Fraud Office begins an inquiry into Libor rate fixing. As was the case back then with the unions, not all in the sector are crooks; but the crimes committed have been serious. In a mirror image, the next Labour Government is likely to produce new rules curbing such behaviour. As with the union reforms, this could have a beneficial effect on the sector.

With both the Thatcher reforms and the expected Labour reforms of the City, however, there are missing elements. They leave their own sides unreformed, and they neglect the importance of industrial leadership. Union militancy was only part of the reason for industrial decline: incompetent, class-based industrial leadership was the other. The Trotskyists would never have stood a chance of entryism if organizations had been run intelligently, on the basis of participative structures, strong teamwork and leadership. This approach also produces better productivity, service and profits, as Neela Bettridge and I describe in the blog and forthcoming book, New Normal, Radical Shift.

Almost certainly, Labour will introduce numerous new laws, both for the City and more widely in the economy to protect workers’ rights. And almost as certainly, they will neglect the importance of management education and industrial development. It is very unlikely that they will acknowledge their own role in the crisis: the hubris, mismanagement, excessive borrowing and wasteful spending by Gordon Brown, who bent the definition of the ‘Golden Rule‘ – a deception with an even bigger impact than Libor-fixing.

As for the Liberals then and the Liberal Democrats now, they appear to have little to say about economic and business issues. Sectarian or useless: this is the voter’s choice.

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