Comment: Carney addresses unions | East Coast

WITH a clear eye to his audience, Bank of England governor Mark Carney told the annual TUC conference yesterday that the hard hand of the Great Recession has fallen squarely on Britain’s households and rank-and-file workers.

Martin Flanagan

Carney told his Liverpool audience that financial risk had steadily transferred onto the shoulders of employees from both employers and the state, ranging from lower wages to pension changes and evolving workplace practices.

People are working longer for less money before they take their pensions. And they are accepting historically muted wage growth at this stage of a recovery from recession because they want to pay down debts and are uncertain what the future will bring.

However, the governor stopped short of tickling the unions’ tummies. He said British workers deserved a pay rise for their fortitude and flexibility in the extended downturn, but indicated that in the greater scheme of things, he believed that current subdued wage growth and productivity were a price worth paying for securing much lower UK unemployment than is the case in America and swathes of southern Europe.

It is difficult to argue with that, even though some will in the run-up to the Scottish referendum and next year’s UK general election.

As Carney makes clear, it has been a drab picture for many workers – trade union members and not – over the past five or six years. And it is difficult for workers whose purchasing power has fallen by at least 10 per cent since the 2008 financial crash to be urged to be grateful for small mercies.

But you only have to look at the basket case that is the eurozone, with youth unemployment rates in the likes of Greece, Spain and Italy of about 40 to 45 per cent compared with (a still unacceptable) 20 per cent in Britain, to realise there was nothing certain about recovering as we have.

Carney and his predecessor at the BoE, Lord King, have played the tough hand the central bank was dealt pretty well. Interest rates have been at historic lows for several years, and further central bank financial stimulus has been pumped into what was a badly weakened UK economy.

Without such actions there was a real danger that we could have had a re-run of the 1930s Great Depression rather than a Great Recession. Instead, we have paid for averting apocalypse with lower income and employment security.

Arguably, the glass is half full.

East is east and privatised is not best

THE latest strong profits of the East Coast railway under public ownership makes you wonder why the government wants to privatise it again. The answer is that political ideology is stubborn.

Directly Operated Railways (DOR), which runs the line linking Edinburgh to London, is returning nearly £217 million to the taxpayer for its latest trading year.

It is a signal improvement on the disaster that was National Express’s withdrawal from the franchise in late 2009, not the finest hour of the privatised rail industry.

Strong anecdotal evidence – including from this columnist, a reasonably regular traveller on the route – suggests most passengers feel the DOR service has been notably superior to its predecessor.

To say there is no public clamour for a return of the East Coast to privatised status next year is a major understatement. If it ain’t broke…