The RMT delegation walked out of the conference hall in Manchester yesterday as Bank of England governor Mervyn King stood up to warn the TUC Congress that there was no alternative to cutting the ‘unsustainable’ budget deficit.
RMT general secretary Bob Crow said: ‘RMT delegates would rather hear from one of the millions of people at the sharp end of the ConDem government’s cuts than sit in a hall and endure a lecture from one of the architects of the financial crisis that’s ripping a hole in our public services.
‘It’s the bankers that caused the crisis, it’s like rubbing salt in the wounds of workers.’
King opened his remarks by heaping praise on TUC general secretary Barber.
King said: ‘Members of your General Council have made a huge contribution to the Bank of England by serving on our board – the Bank’s Court.
‘Carrying on that tradition today is Brendan Barber. By bringing a distinct and important perspective to our discussions, Brendan has helped us through some extremely turbulent times. I am grateful to him.’
Referring to the 2008 banking crash, he added: ‘Before the crisis, steady growth with low inflation and high employment was in our grasp.
‘We let it slip – we, that is, in the financial sector and as policy-makers – not your members nor the many businesses and organisations around the country which employ them.
‘And although the causes of the crisis may have been rooted in the financial sector, the consequences are affecting everyone, and will continue to do so for years to come.’
He went on to warn: ‘So we cannot just carry on as we are.’
He conceded: ‘Your members, and indeed the businesses which employ them, are entitled to be angry.’
He continued: ‘In 2008, banks were bailed out not to protect them but to protect the rest of the economy from the banks.’
But he added: ‘Although a large budget deficit is inevitable for a period after a crisis, it is also clearly unsustainable – our national debt, even relative to GDP, is rising sharply and will continue to do so for several years.
‘It is vital for any government to set out and commit to a clear and credible plan for reducing the deficit.
‘I would be shirking my responsibilities if I did not explain to you the risks of failing to do so.’
He insisted: ‘If the world economy needs rebalancing, so does our own. The substantial trade deficit over a number of years means that national spending exceeded production.
‘We need a higher national saving rate, a shift in spending and production away from consumption and towards exports. And a key part of that is a reduction in our budget deficit.’
Reacting to the speech, Paul Kenny, GMB General Secretary said: ‘His analysis of the excesses of the banking system reminds me of Jessie James warning people in the Wild West about the dangers of train robberies.
‘The truth is that he presided over the Bank of England and he never spoke out when he should have done.
‘His statement that the banking crisis and the recession that has followed was not foreseeable is plain wrong.
‘Many voices including that of GMB spoke out. He should have done the same. The fact is that he failed us.’
During a question and answer session following his speech, King was asked by the Public and Commercial Services union about closing the tax gap as an alternative to public spending cuts.
PCS national president Janice Godrich took the opportunity to raise PCS’s tax justice campaign.
With the amount of tax uncollected each year estimated to be around £120bn, Godrich asked if King agreed with the union that tax loopholes should be closed, HM Revenue and Customs should increase staff rather than cut them and decisive action should be taken against tax evaders.
King said he could not comment on tax policy but that our case seemed ‘persuasive’.
The PCS said: ‘Since HMRC was formed in 2005, 30,000 jobs have been cut, leading to huge delays in dealing with enquiries from members of the public and businesses, and one million items of post going unopened.’