Cable warns on industrial action

THE case for changing strike laws is not compelling but pressure on the Government to act would “ratchet up” if action by public sector workers damages the economy, the Business Secretary will tell union activists today.

Vince Cable will admit “we are undoubtedly entering a difficult period” as he addresses the annual conference of the GMB union.

Mr Cable said he expects “significant parts of the public sector” to join a day of industrial action in protest at cuts in spending, jobs, pay and pensions later this month.

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Union leaders have warned that three quarters of a million teachers, lecturers, civil servants and other public sector workers could take co-ordinated strike action on June 30 in the biggest outbreak of industrial unrest for years.

Dr Cable will tell the 500 GMB delegates at the Brighton conference: “The usual suspects will call for general strikes and widespread disruption. This will excite the usual media comments about a summer or an autumn of discontent, and another group of the usual suspects will exploit the situation to call for the tightening of strike law.

“We are undoubtedly entering a difficult period. Cool heads will be required all round. Despite occasional blips, I know that strike levels remain historically low, especially in the private sector. On that basis, and assuming this pattern continues, the case for changing strike law is not compelling.

“However, should the position change, and should strikes impose serious damage to our economic and social fabric, the pressure on us to act would ratchet up. That is something which both you, and certainly I, would wish to avoid.”

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The minister will say he understands that feelings were running high in trade unions, as the huge TUC demonstration in March showed, adding: “Despite our differences, we have much in common. We share many policy aims. We face the same economic challenges. Let’s address them together. I believe this is what ordinary union members would want their unions to do.”

Dr Cable will say that modern shareholder capitalism in the UK has considerable strengths as a system, but also weaknesses.

“One is a tendency to what is called short-termism - a preoccupation with short-term, often quarterly, profitability and shareholder value at the expense of long-term growth. It says something when private equity investors are considered to be long-term - because they plan over five years.

“Long-term institutional investors who manage pension funds, for example, seem to be eclipsed by those solely interested in the short-term and managers have those short-term goals embedded in their incentives.

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“We are seeing too many company takeovers which reduce or destroy value and are driven by the fat fees earned by the lawyers and banks who facilitate them. I have made it clear - post Cadbury - that there have to be changes and I am pleased that the Takeover Panel has come up with modest but useful changes to reduce unnecessary takeovers.”

Aides said Dr Cable wanted to emphasise that the Government feels there is no case for changing strike laws at the moment, and that unions have acted responsibly.

Chancellor George Osborne told the BBC News Channel: “Vince Cable is absolutely right. He speaks for the Government, of course, and I agree with him.

“Of course we want a constructive relationship with the public sector unions. We have got important negotiations under way, for instance on pensions.

“What Vince is saying is if we go into a cycle of destructive strikes we would have to think again, but let’s hope we don’t get there.”

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