Danny Alexander addresses the GMB – emerging liberal and successful

Yesterday Danny Alexander headed off to the annual conference of my old union, the GMB, to give a tricky speech.

The GMB isn’t just a consistent critic of the government, it has also criticised Labour for not being different enough from the government in its eyes. Throw in contentious issues such as the pension reforms and merely avoiding uproar would have been a success. In fact, the Liberal Democrat Chief Secretary to the Treasury did far better than that:

The full speech (see below) is well worth a read, because the success of it comes from its general tone and approach rather than any particular individual line or initiative.

It’s a tone of respect towards responsible trade unionism – and rightly so, as the idea of people combining together to strengthen their voice and to change their communities sits not only at the heart of trade unionism but also at the heart of community politics. Alongside the traditional Liberal and then Liberal Democrat disdain for seeing the world as one of bosses versus trade unions, there is also room for some shared aims and values.

As Danny Alexander pointed out,

It was of course a Liberal Prime Minister, William Gladstone, who legalised trade unions almost 150 years ago.

And together, the Trades Union movement and the Liberal Party were at the very heart of some of the key economic, political and social reforms for this country.

Regulating working hours. Improving working conditions. Extending national insurance. Laying the foundations of our welfare state with the Beveridge Report. Understanding the economic advantages of Britain playing a strong role in Europe.

More recently, opposing the war in Iraq.

And I would hope that you would recognise that the Liberal Democrats continue to share many of your goals.

As demonstrated by Vince’s work with the TUC and Unite to secure jobs and investment at Ellesmere Port – a shared effort that will safeguard 2,000 jobs, directly create 700 new jobs and secure car production at Ellesmere Port until at least 2020.

And as well as specific examples of collaboration, we share a common desire to change the balance of power right across our country.

To change who has the power and how it is distributed.

That isn’t to say that Danny Alexander shied away from disagreements, particularly over pension reform, where he reiterated his determination to support changes in public sector pension schemes. On regional pay, his message was more mixed:

Despite some of the more excited press reporting, the only thing we have decided is to look at the evidence.

So, let me be clear on this. This is not about introducing regional pay. It is not about ending national pay bargaining. It is not about cutting anyone’s pay. And it is not about making further savings.

And, before we decide anything, we want to hear from everyone with a contribution to make to this debate – employers, academics and, yes of course, the Trades Unions.

There will be no change unless there is strong evidence to support it and a rational case for proceeding.

Overall, it was a liberal – and successful – speech, holding out some olive branches to trade unions. There is a touch of irony about that as the speech came from someone who has attracted rather a reputation amongst some party members for sounding much too keen much too often on Conservative policies in media interviews. This was instead the Danny Alexander who won plaudits from across the Liberal Democrats during his time chairing the Federal Policy Committee (FPC) for successfully bringing together rather than driving apart different outlooks within the party.

Danny Alexander’s speech in full

This is my first speech at the conference of a Trade Union, and it is an honour to have the opportunity to address the GMB.

The GMB play a crucial role in the TUC and the wider trade union movement in our country – As shown by Paul Kenny’s presidency of the TUC this year.

I address the conference today as a Liberal Democrat working in a Coalition Government and as a Treasury Minister at a time of very significant economic challenges for the UK.

I welcome the interest in dialogue that this invitation represents, and I look forward to a robust Q&A later.

I’ve learned from Vince Cable last year – by not briefing anything to the press in advance!

While the Liberal Democrats and the Trades Unions do not always see eye to eye, I want to emphasise three things in particular today:

• first, those areas where we share a common purpose to make Britain a fairer place with more jobs and long-term investment;
• second, the merits of open, honest and constructive dialogue for those areas which we disagree on; and
• third, how the relationship between the Liberal Democrats and Trades Unions might develop in the future.

Despite our differences, the Liberal Democrats and the Trades Unions share many common values and common objectives.

It was of course a Liberal Prime Minister, William Gladstone, who legalised trade unions almost 150 years ago.

And together, the Trades Union movement and the Liberal Party were at the very heart of some of the key economic, political and social reforms for this country.

Regulating working hours.

Improving working conditions.

Extending national insurance.

Laying the foundations of our welfare state with the Beveridge Report.

Understanding the economic advantages of Britain playing a strong role in Europe.

More recently, opposing the war in Iraq.

And I would hope that you would recognise that the Liberal Democrats continue to share many of your goals.

As demonstrated by Vince’s work with the TUC and Unite to secure jobs and investment at Ellesmere Port – a shared effort that will safeguard 2,000 jobs, directly create 700 new jobs and secure car production at Ellesmere Port until at least 2020.

And as well as specific examples of collaboration, we share a common desire to change the balance of power right across our country.

To change who has the power and how it is distributed.

So, in Government, the Liberal Democrats are leading the march on changing our political system and rebalancing our economy.

On the political system, the Liberal Democrats are spearheading reform of the House of Lords – something which I know has been a priority for the GMB since its beginnings.

This ought not to be controversial or difficult – after all, three parties were committed to a democratic second chamber at the last election.

So we should not give in to the vested interests who have always found an excuse to oppose reform, and always will.

On the economy, I am well aware that the GMB takes a different view to the Coalition Government on the right strategy for the UK economy.

But while we disagree about some of the solutions, we do have a shared desire to protect this country from the worst effects of the crisis and to return to sustainable prosperity. And I suspect we share an analysis of what went wrong over the last decade or so.

The over reliance on under-regulated banks to provide tax revenues that could not be sustained.

The shocking decline in manufacturing.

The false belief that boom and bust could be ended, and the failure to build resilience into economic policy that resulted . . .

And I am all too aware of the real world challenges – for both hard-working public servants and for those who rely on public services.

But I believe those challenges would be far, far greater if we didn’t have plans in place to deal with our record deficit and get back to being a country that can pay its way.

If we had carried on as before, we would end up in the long run with even higher debt, spending more on even higher interest payments and needing even bigger cuts in the end.

But whether you think the cuts should come over the next few years as planned, or that even bigger cuts should be made later on, I believe there is more common ground on our priorities for the economy.

The Liberal Democrats have been clear on our priorities for public spending.

• improving social mobility – including through a pupil premium for the most disadvantaged children;
• providing capital investment that supports jobs in our economy – including through our commitments to transport projects, the Regional Growth Fund and the Get Britain Building fund;
• prioritising education and training, particularly apprenticeships, so that our people have the skills they need to drive the economy forward; and
• protecting the vulnerable – including, for instance, by ensuring that those earning less than £21,000 a year receive some uplift even during the public sector pay freeze.

I am sure that you will share my deep disappointment that many local councils refused to follow our lead in ensuring the lowest earners received that pay rise.

On the economy, our immediate, essential priority is to strengthen our economy in the face of growing headwinds from the Eurozone.

That means supporting businesses to create jobs, especially for young people; investing in the skills of our workforce; working hard to secure export orders and investment into Britain.

And crucially it means investment in infrastructure, where we are actually spending more on our transport system than our predecessors managed.

We are working hard now on new ways to use the government’s balance sheet to bring forward more investment in infrastructure and housing.

Our medium to longer term aim is to rebalance an economy that became very unbalanced between sectors and different parts of the country.

To do this, we need to deliver a better balance across a range of sectors – and move away from the over-dependence on financial services and the City of London.

We need to ensure that growth benefits the whole of the UK – not just London and the South East.

And we need to tackle unjustified income disparities in our society.

With Vince as Secretary of State for BIS, we have worked with shareholder groups, with pension funds, with insurers to reinvigorate the power of shareholders, especially in relation to excessive pay.

This has started to bear fruit. Shareholders are beginning to wield the power that for too long they have allowed to sit idle.

Trades Unions could do more on this.

I would encourage all Trades Union trustees – including, for instance, of the local government pension schemes – to actively use their voting powers to ensure that company leaders are held to account.

The Deputy Prime Minister is driving forward the employee ownership agenda.

Where employees have a real say and direct influence on the running of their companies they will perform significantly better

And I announced at the Spending Review an additional £900m for HMRC to bear down much more heavily on tax avoidance and evasion – particularly by those at the top who can pay their fair share. Because at a time of austerity, it is even more important that everyone pays what they owe.

Alongside this, we delivered in this year’s Budget the biggest ever increase in the Personal Income Tax Allowance – lifting an additional 840,000 low paid people out of income tax altogether – 2 million since 2010.

In our first three budgets, we have halved the amount of income tax paid by someone working full-time on the minimum wage.

We are now only a short step away from the goal that we set in the Liberal Democrat election manifesto that no one should pay any income tax until they earn more than £10,000.

In doing so, we are delivering the biggest tax cuts for decades for 24 million working people.

And crucially, we are working to ensure that our young people are supported through these difficult times. This has, rightly, been a major campaigning issue for the GMB, and something Paul Kenny has raised directly with me and with the Chancellor.

And we are acting:

• We are delivering a record number of Apprenticeships – an increase of 250,000 over the Spending Review period;
• the youth contract which started in April will provide opportunities for up to 500,000 young people
• including up to 160,000 wage subsidies for employers and 40,000 new incentive payments for employers to take on a young apprentice.

But this is a huge challenge. In order to avoid the perils of a lost generation, we need to engage employers actively.

And we need active Trades Union engagement with the Government and with employers to support this agenda.

So while there may be big differences in our economic analysis and approach, Liberal Democrats and the Trades Unions share many of the same objectives.

On the need to ensure that young people are not blighted by years of unemployment as they were in the 1980s.

On the importance of infrastructure investment to support jobs.

And on the need to rebalance the economy.

The Liberal Democrats in Government are actively promoting these priorities.

I would welcome more dialogue and constructive engagement with you to help us to do this.

On those areas where we disagree, the Liberal Democrats and Trades Unions at least share a common approach to resolving differences.

We are both committed to engaging in open discussion.

We are both committed to seeking consensus where we can find it.

And we are both committed to speaking up for those that cannot speak up for themselves.

This common approach means that we have in place the basis for open dialogue, rational discussion and engagement based on mutual respect.

This approach is all the more important on those areas where we have very clear differences.

Take reform of public service pensions.

We may not have agreed on the objectives – and I am only too aware of the strong feelings on this issue across the Trades Union movement.

But the Coalition Government and the TUC agreed at the outset on the need to engage constructively, honestly and regularly.

The Trades Union negotiators – led by Brendan Barber and Dave Prentis, with Brian Strutton from your Union playing a key role throughout – were tough, committed to their principles and often compelling in their arguments.

They stayed at the negotiating table and fought hard for their members, recognising that walking away benefits nobody.

And by doing so, they were able to shape the reforms for the benefit of their members.

At the end of last year, we established heads of agreement on the reforms for each of the main public service pension schemes.

These recognised that with people living longer, public sector workers like everyone else in society, will need to work longer and contribute more towards the cost of their pensions.

That is the only way to ensure that it remains affordable and sustainable for public servants to continue, rightly, to receive among the very best pensions available.

These reforms will deliver significant long-term savings for taxpayers.

But in return we were also able to make important commitments:

• that at retirement, those on low and middle incomes will get at least as good a pension as they do now;
• that those at the bottom end of the income scale will be protected from the contribution increases; and
• that those nearing retirement will be protected from the wider reforms.

This demonstrated the benefits of the honest and robust engagement between Government and the Trades Unions.

As a result, we have a more affordable future for public service pensions, which means that there need be no further changes for 25 years.

I believe that it demonstrates that we can works towards agreement through negotiation in good faith and based on clear objectives.

That is the right approach to an issue as sensitive and long-term as public service pensions.

I know that GMB members have voted against the health pension changes.

But I believe they represent a good deal for NHS workers.

As a result of the negotiations, we have ensured that lower paid NHS staff will not be hit by high contribution increases.

And even under the last Government’s plans – the so called ‘cap and share’ arrangements – there would have been some contribution increases.

These reforms are essential to meet the rising costs resulting from the positive fact that people are living longer.

So I would urge you to look again at the health pensions proposals on the table.

I want to pay tribute to Brian Strutton’s tireless efforts, alongside colleagues from Unison and Unite, in negotiations on the Local Government Pension Scheme.

In the last couple of weeks, the Government, the Local Government Association and those Trades Unions with local government members were able to reach agreement on a proposal for a new local government pension scheme – that will now be put to members and employees.

This will involve local government workers – in common with other private and public sector workers – working longer.

But, reflecting the funded nature of the Local Government Pension Scheme, it will also involve a more generous accrual rate, keeping average member contribution rates at current levels, and additional flexibility in contributions and benefits.

It is right that the GMB and other trades unions will want to consult carefully on these reforms with their members over the coming weeks.

So it was good to hear that your negotiators are recommending that this deal be approved.

I believe they represent a good, responsible and sustainable deal for local government workers.

I want to build on this open and constructive engagement between the Government and the Trades Unions on pensions.

We have already set up a Government and TUC working group to look at how we can better administer public sector pension schemes in the future.

I hope that this will result in more members being involved in the running of the schemes.

And better information for members on their costs and benefits.

Alongside this, the Government and the Trades Unions have agreed to work together to ensure the new pension schemes comply fully with all Equalities legislation.

The Coalition is also taking steps to ensure that all employees can prepare for and look forward to a dignified retirement – in both the private and public sectors.

It is a scandal that half of UK employees are not part of an employer-sponsored pension scheme.

From this coming October, we will be making it compulsory for all employees to be automatically enrolled in their employers’ workplace schemes.

And the Coalition is introducing a new type of pension scheme – NEST – for workers whose employers don’t provide an occupational pension scheme.

These reforms will mean up to 8 million people saving more into a pension, or saving for the first time.

And we will introduce a simplified, single-tier state pension so that all people can expect a good income in retirement – a change which will particularly benefit low paid and female pensioners.

There are two significant further areas where I would welcome more engagement between Government and the Trades Unions.

Where by working together, I believe we can get a better outcome for workers and employers.

And a better outcome for jobs, growth and the quality of our public services.

The first is on local market facing pay.

As you will know, the Government has invited the independent Pay Review Bodies to consider whether there is evidence for making public sector pay more responsive to local labour markets.

The Pay Review Bodies will report back next month.

At the moment, while private sector pay is set in accordance with local labour markets, public sector pay is set on a national basis.

So it’s right that we should look at the evidence.

Despite some of the more excited press reporting, the only thing we have decided is to look at the evidence.

So, let me be clear on this.

This is not about introducing regional pay.

It is not about ending national pay bargaining.

It is not about cutting anyone’s pay.

And it is not about making further savings.

And, before we decide anything, we want to hear from everyone with a contribution to make to this debate – employers, academics and, yes of course, the Trades Unions.

There will be no change unless there is strong evidence to support it and a rational case for proceeding.

The second area I would welcome more engagement is on employee rights.

There has been enough trading of colourful language on one set of suggestions – the Beecroft Report- and I don’t intend to add to that today.

Instead, I’d like to talk about what the Government is actually doing.

The core issue is not how can we strip away employee rights. But, are there ways in which we can make our labour market even more flexible while maintaining essential hard-won employee protections?

To encourage employers to take on staff will benefit everyone – particularly those without work.

A rational, informed and evidence based discussion is worth having.

That is why we are taking steps to encourage earlier resolution of workplace disputes…

Why we have made changes to the rules around employment tribunals…

And why Vince announced yesterday further plans for Settlement Agreements, developed by Norman Lamb, – a sensible, fair alternative to tribunals that keeps necessary protections for employees in place.

Again, we would welcome constructive dialogue on this.

As I have said, although these are incredibly difficult and testing times, there are quite a number of issues and ideas on which Trades Union and Liberal Democrat instincts are closely aligned.

Historically, though, Trades Unions have focused their efforts and engagement on one political party.

And indeed the huge amount of your resources spent on campaigning for that party – and against all others, is a hurdle in the way of improved relationships.

But equally I have seen firsthand through the public service pensions negotiations, many Unions – including this one – seek to represent their members’ interests responsibly and constructively to the Government of the day, whichever parties are in office.

So, building on that experience, I think there is an opportunity to see closer dialogue between Liberal Democrats and Trades Unions . . .

That is an opportunity for both Trades Unions and Liberal Democrats to understand and influence each other.

In other European democracies, it is commonplace for Trades Unions to seek to engage with all mainstream political parties, and their influence is the greater as a result.

So I’d welcome more Trades Unions at our party conferences – as you did by organising a fringe event on public service pensions last year, and as Brendan Barber has done regularly over recent years.

It is in all our interests to engage constructively as we deal with the huge challenges facing our economy.

So, just as we need to rebalance our economy, I hope I can encourage you to think about the balance of your political engagement too.

To focus on what Will Thorne, founder of the GMB, really meant when he said.

“There is a world of freedom, beauty and equality to gain, where everyone will have an opportunity to express the best that is in them for the benefit of all, making the world a place more to our heart’s desire and the better to dwell in.“

Thank you.