(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,