TGWU and GMB, Britain's biggest general unions, are due to commence merger discussions which could bring about the biggest super-union yet, with a combined membership of over two million.
While a formal announcement is unlikely until the conclusion of this weeks TUC conference, sources in both unions confirmed that talks - first predicted in Socialist Outlook last March - are now in the offing.
Areas of widespread common membership, including local government, plastics, clothing and textiles, chemicals, glass and food, would give fusion a strong industrial logic.
Yet a successful conclusion to the discussions is by no means certain; the two unions have traditionally been at loggerheads in many of these sectors. In addition, TGWÚ and GMB are - in Congress House terms at least -on left and right wings of the labour movement respectively.
Nevertheless, relations have strengthened considerably since Bill Morris replaced Ron Todd at the helm of the TGWU in 1991. Morris is said to have struck a personal rapport with GMB chief John Edmonds. Earlier this year, TGWU and GMB put out their first joint statement for many years, on the need to improve training programmes The consolidation of British trade unions began in earnest with the merger of ASTMS and Tass into MSF in 1988, and continued with the formation of AEEU out of the AEU enSpeers and ETU electicians this NALGO. NUPE and COHSE are set to form UNISON by July 1993. A need not to be outflanked probably looms-large in Morris and Edmonds considerations.
factor is TGWUs cashflow. The union spent £11m more than its income last year, and has since engaged professional consultants to manage necessary cutbacks.
Any eventual TGWU/GMB lash up could create a pole of attraction for other unions. While TGWU talks on merger with the NUM are currently on ice after failure to agree what job miners' union president Arthur Scargill should be given, there is continuNo. 27 ina speculation that MSF is looking for a further partner.
For rank and file activists in TGWU and GMB, the key question in the merger will be that of union democracy. While neither union could be viewed as democratic, TGWU structures are marginally more open to shop steward influence, and Marxists occasionally even make it onto the elected lay-member national executive.
Formal positions for unilateral disarmament and the repeal of anti-union laws have been maintained.
In the GMB - very close to new Labour leader John Smith, who it sponsors - fulltime officials have even stronger control. 12 Sept, 1992
The pound, as everyone who hasn't been asleep or on a foreign beach for the last month knows, is in deep* trouble. Endless discussion of exchange rates strikes most people, even socialists, as deeply boring. Who cares?
But this time the pound crisis is going to have a big effect on the standard of living of the vast majority of British workers.
The root of the problem is the international recession which has lasted since 1989. The United States has low interest rates to try to get people to borrow money and get business going, so the US can get out of the recession; but Germany has high interest rates because it needs an influx of capital to pay for reunification.
The net result is that the flow of international capital is heavily towards Germany where the short-term return is best. In effect, international financial institutionsare buying Deutschmarks. The result is the Deutschmark becomes strong and the dollar, and other currencies, become comparatively weak. So The sting in the tail is that Britain is stuck in the European Exchange Rate Mechanism (ERM). This means that the pound must be maintained at a certain minimum value, at the moment 2.77 Deutschmarks to the pound. To do that, the international financial markets have to be willing to buy buy marks, at least at the present exchange rate.
In the end there are only two caught in the ERM trap." ways out of this situation for Chancellor Lamont; either the pound is devalued by realigning 1 the ERM, or money is attracted back towards pounds by raising interest rates.
Devaluing the pound will make all imported goods and foreign travel more expensive. The price for doing this would be to add inflation to Britain's already near-slump economy.
Raising interest rates would give another twist to slump. High interest Page 6 12 Sept, 1992 No. 27 rates are recognised by millions of people as meaning that their mortgages go up. But it means much more; money is expensive to borrow, and loans are much more expensive to pay back. Businesses, especially small businesses, go bust. Big firms don't borrow to invest. The economic recession gets worse.
Consumers respond to high interest rates by not buying on credit, with the inevitable result that high street trading slumps again.
Now the government has organised £7 billion in loans from foreign currencies to attempt to avoid raising interest rates. The irony is that in the end both may happen; devaluation of the pound, followed eventually by a rise in interest rates.
This is the classic deflationary spiral that the British economy is in. But belt tightening' is the least of it for working people: this crisis will inevitably and inexorably hit the poorest in society.
Real unemployment is running around 4 million (the official figure is 2.9 million). Now the poorest are going to be hit by massive slashing of government spending.
In a recession government incomes from taxes goes down. Last year the government spending deficit was probably £37billion in real terms. That compares with the government actually being €10 or £12 billion in credit during the 1988/9 boom years.
Either the government prints money on a vast scale, to the tune of £40 or £50 billion a year causing massive inflation; or it cuts back.
Unemployment and social security benefits are certain to be a target, because if held at present rates they will bankrupt the government as unemployHarris Nothing to offer but Keynes: new Labour leader John Smith ment goes up. Already unemployment benefit has been cut to 6 months, ensuring that millions more are on income support, which is savagely means-tested.
The other two big-spending ministries are Health and Defence. Defence is undergoing a rationalisation, but of course core spending is bitterly protected. The NHS is bound to suffer a further round of cuts. As with social security benefits, cuts are effected by just not increasing spending in line with inflation.
The job market is becoming quite desperate. Mass sackings of industrial workers are being compounded by " the slashing of white collar jobs;
government, local government, data processing, and 'professions' like journalism are all heavily affected. This will now be redoubled by government plans massively to extend higher education, to take 18-21 year-olds out of the jobs market.
This of course prepares the way for an increasing number of unemployed graduates.
Against such a background anyone would think that the Labour opposition would have a field day. The problem is that Labour is caught in the deflationary political trap implied by the ERM and Maastricht treaty; indeed Labour was demanding that Britain go into the ERM before the Tories actually did it!
If France votes against Maastricht on 20 September then European capitalist unity and with it the ERM is in danger of collapse.
But with or without the ERM British capitalism is stuck in a recessionary spiral which only the most radical social and political measures could break out of.
The sterling crisis means above all an attack on the working class. Indeed in the post election situation, far from Major having dragged the Tories towards the 'centre, 1 he attack on the working class is just getting deeper.
The Labour and union leaders are paralysed by this onslaught; John Smith and his team have spent the whole summer in a stunned and complacent silence.
The whole working class is paying the price for the refusal during the 1980s to take effective measures to organise the unemployed, to fight back against unemployment by demands of banning overtime and job sharing with no loss of pay; and the refusal to anything substantial to defend the low-paid and the welfare state.
In this new situation it is not just employment and living standards which are under threat; it is the whole structure of the welfare state.
"Against such a background anyone pounds; today they would rather would think that the Labour opposition would have a field day... But it got