Economic Justice Commission

Debate between Justin Madders and Liam Byrne

Tuesday 11th September 2018 Westminster Hall

[Liam Byrne]

I did not expect to intervene, but my hon. Friend makes an incredibly important point. The case he makes has been rehearsed by the Opposition for some time, but it has now been endorsed by the International Monetary Fund, which reported over the summer that the dismantling of labour protections accounts for a huge slice of the fall in labour’s share of national income. That is not just our view—it is now the IMF’s view.

[Justin Madders]

I did not think I would quote the IMF today, but my right hon. Friend is absolutely right about the share of income that goes to labour. I found that statistic in the report staggering. It is clear that the direction of travel will only continue downwards. We must find a way of reversing that decline. We like to say in this place that economic growth is the answer to all society’s problems, but that growth has to be shared by everyone, and it clear that that is not happening. If we do not solve that puzzle, we will have failed our constituents.

We must also tackle the myth propagated from time to time that an empowered workforce are a barrier to growth when, in fact, as my right hon. Friend said, all the evidence shows that they are an enabler. Many of the countries that outperform us in productivity have better paid workers and stronger workplace rights. The report states clearly:

“If both productivity and pay are to be increased, power will need to be rebalanced in significant ways from employers to workers. This will require stronger labour market regulation and strengthened trade unions.”

Sadly, the Government seem to spend a disproportionate amount of time looking to stifle and inhibit trade union activity.

There has been a lot of soul searching in the past few years about why people voted as they did in the referendum. I think many of the answers are in this report. I always maintained that the arguments advanced during the campaign about the threats to our economic security from Brexit would never work with people who already did not feel economically secure. As the report makes clear, the issues that have created the rampant inequality that fuels division and discontent in this country can be solved only by a Government who are prepared to tackle the root causes of what is a very lopsided economy. The lessons of the past tell us that things will change only if there is a political will to make that change. We will fail this country if we do not take the lessons in the report seriously.