Trade Unions Form Alliance to Rally Opposition to Planned Cuts in Spending

U.K. union leaders warned of strike action as they urged the public to join millions of workers in a campaign to halt government plans for the deepest budget cuts since World War II.

Unions representing more than 6 million workers voted today to coordinate industrial action and build support for public demonstrations. The unions, which are meeting at the Trades Union Congress’s annual convention in Manchester, want to be ready to act as soon as cuts are announced next month.

“Industrial action is inevitable unless the government is prepared to change direction,” Mark Serwotka, general secretary of the 301,000 member Public and Commercial Services Union, told delegates. “If all the public and private sector unions stand together not only can we win but we can offer hope and inspiration to people who are looking to us to stand up for them and protect their public services.”

Widespread public support for the unions’ campaign would threaten to derail Chancellor of the Exchequer George Osborne’s program that has so far won the backing of bond investors and rating companies. Unions want the government to clamp down on tax evasion by the rich, scrap the nation’s nuclear weapons and invest in programs that boost economic growth instead of making cuts to services.

‘Difficult Disputes’

“Cut services, put jobs in peril and increase inequality; that is the way to make Britain a darker, brutish, more frightening place,” Brendan Barber, general secretary of the TUC, an umbrella group that represents more than 6 million workers, told delegates. “We have to start and win this debate about our country’s economic future and mobilize in every community and every constituency.”

Barber said opposition to the government’s academy schools program, which saw unions, parents and school governors working together at a local level to limit the take-up of the plans, was a model for how unions could work with the users of public services to oppose cuts. The unions will use grass-roots campaigning to make the case for maintaining public spending and investment, he said.

Osborne is due to map out cuts to government departments of as much as a quarter in the Comprehensive Spending Review on Oct. 20. Prime Minister David Cameron’s coalition of Conservatives and Liberal Democrats is proposing to tighten fiscal policy by 113 billion pounds ($174 billion) by 2015, mainly through spending cuts, to all but eliminate a deficit of 11 percent of gross domestic product.

‘Stimulating’

Osborne has embarked on his own campaign to win support for the cuts and yesterday said the budget consolidation plan has already delivered lower real interest rates, improving the ability of businesses and households to borrow.

“Having low interest rates is the most stimulating thing you can do for the economy in a situation like this,” he said in an interview on “Charlie Rose,” scheduled to be broadcast today on Bloomberg Television.

Union leaders said the government should seek to boost growth rather than cut spending and pointed to evidence that Osborne’s plans may already be affecting confidence in the economy.

An index of business confidence compiled by BDO LLP fell to 93.1 in August from 95.5 in July, the lowest in more than a year.

“Businesses seem to be convincing themselves that things are going to get really tough in 2011, and are deferring new hires and investment decisions as a result,” said Peter Hemington, Partner at BDO. “Much of this comes from the hype around the government’s spending cuts.”

Government Responsibility

While ministers will listen to the unions’ arguments, the government has a responsibility to slash the deficit and cuts will not be “agreeable” or easy, Cabinet Office Minister Francis Maude said.

“We are not going back to the days where there is a complete standoff between trades unions and the government. Those days are gone,” Maude said in an interview with BBC Radio 4’s “Today” show. “But we are the government and we inherited a terrible budget deficit.”

Bob Crow, general secretary of the RMT rail union, said unions need to follow the example of the banks, which used their political muscle to win a bailout in 2008. Coordinated strike action should be used to have the maximum political impact, he said.

“If those five bankers don’t get out of bed in the morning the country will run as normal, but if workers don’t get out of bed in the morning the country will come to standstill,” said Crow, whose union is involved in a dispute that halted the London Underground on Sept. 6. “We’ll be fools not to coordinate our action because there’s a concentrated attack on us so there needs to be a concentrated response.”

Wrong Tone

The British Airline Pilots’ Association was the only union in the TUC to oppose the motion for a national campaign against cuts. The angry tone of other speeches won’t help to win over the public, the 8,400-member union’s general secretary Jim McAuslan told delegates.

“Saying that we don’t have to cut one penny of public expenditure to deal with the deficit this country has, I think is getting the tone wrong,” McAuslan said. “We are giving the coalition government an open goal with our resistance. We have to go out and win the argument.”

To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net; Gonzalo Vina in London at gvina@bloomberg.net.

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