Victory for 250,000 HSBC workers has helped to create an alliance within UNI to address global concerns and grievances.

In mid-February one of the world’s leading banks, HSBC, emerged from 10 months of hard thinking having decided not to act on the threat to move its headquarters from London back to Hong Kong. The British Conservative government gleefully touted the decision as a vindication of Tory financial competence. “The world’s local bank,” as HSBC liked to call itself, stopped blustering just long enough to feel the world moving. Between a right wing government and one of the new masters of the universe it’s tough to decide which looked the most ridiculous.

Hardly anyone echoed the question asked by Prem Sikka in his newspaper column on the day HSBC made their announcement: “Why on earth would HSBC leave a country that gives banks an easy ride?” Fewer people, if any, voiced the thought that the bank’s main consideration might well have been the state of the global economy – and particularly the very substantial Chinese part of it. After all, with the Chinese economy tanking, and the Chinese government apparently dropping its previous commitment to “one state, two systems”, it might make sense to stay well clear of Beijing’s interference. As Sikka observed, “banks have little to fear here, as UK regulators and prosecutors rarely take action.” Sikka is Professor of Accounting at the University of Essex, so he probably knows.

And yet no-one can promise a smooth ride, even to the banks with their notoriously well-oiled relationships with UK governments over the years. Just a few days after the HSBC announcement, the global economic think-tank, the OECD (Organisation for Economic Co-operation and Development) issued its latest Interim Economic Outlook. Things, said this report, are looking bad.

The OECD’s chief economist, Catherine L. Mann, did not mince her words when she introduced the report. “Global growth prospects have practically flat-lined,” she said, “recent data have disappointed and indicators point to slower growth in major economies, despite the boost from low oil prices and low interest rates. Given the significant downside risks posed by financial sector volatility and emerging market debt, a stronger collective policy approach is urgently needed, focusing on a greater use of fiscal and pro-growth structural policies, to strengthen growth and reduce financial risks.”

In other words, everyone, including the bankers, had better start worrying. And in the UK, Japan, China and India, they had better worry more than most. The OECD predicted growth this year to be lowest in the US, the Eurozone and commodity exporters like Brazil and Canada. It has revised its previous global growth forecast of 3.3% in 2016 leaving it unchanged from last year’s 3% but sees growth recovering in 2017 – everywhere except the UK, Japan, China and India.

And among the already manifest disappointments of economic performance in 2016, the most disappointing so far have been among the banks. The recent collapse of bank share prices across the globe has been described as “a rout” and a couple of days before announcing the bank’s decision to stay put in London, HSBC’s chief executive, Stuart Gulliver, observed that shares in banks have been “the worst-performing” so far in 2016. “Several of our competitors have recently announced large-scale redundancies, salary freezes, bonus reductions and … cost reduction programmes,” he said.

So much for economic miracles, the rebounding finance sector and the rigours of austerity. The answer, according to the OECD’s Catherine Mann, is definitely not more of the same. “With governments in many countries currently able to borrow for long periods at very low interest rates, there is room for fiscal expansion to strengthen demand in a manner consistent with fiscal sustainability,” she said with diplomatic tact. “The focus should be on policies with strong short-run benefits and that also contribute to long-term growth. A commitment to raising public investment would boost demand and help support future growth.”

In other words, governments should spend more on infrastructure projects and encourage demand to rise. The OECD used to be a strong supporter of deficit reduction policies that the UK government still clings to. Now it is arguing that the time has come to encourage spending.

For HSBC there are no good reasons to up sticks and move to China, although the bank has very loudly expressed its willingness to move hundreds of its workers from London to Paris should the UK vote to leave the European Union. But if it looks like the bank bosses have not yet given up on their megalomaniac desire to run the world, there are occasional reminders that they may not always have it their own way.

Hidden under all the other news from the economic stratosphere, a little story appeared in the press telling those who could find it that HSBC had dropped a global pay freeze affecting the vast majority of its staff less than two weeks after it had been introduced. It might have been a small victory amidst the carnage of job losses and staff cuts, but it was a victory for 250,000 HSBC workers.

“The bank’s attempt to freeze pay,” said Dominic Hook of Unite the Union, “was grossly unfair, shamefully handled and Unite is glad that the resulting outrage has forced Stuart Gulliver to see sense. This episode shows the importance of having a recognised trade union which can make sure senior management hear the voice of staff loud and clear.”

In fact, the collective action of quarter-of-a-million HSBC workers has helped to create a global union alliance within UNI and that must be good news.

UNI global union affiliates working in HSBC met in the UK at the same time as the bank was announcing the pay freeze U-turn. The meeting was sparked by the outrage that HSBC unions and staff across the world felt about the cavalier way in which the freeze had been announced by email. This was a result of HSBC’s policy of making and implementing global decisions that override local country agreements and undermine collective bargaining. But the meeting also identified job insecurity, outsourcing and offshoring, long and unpaid hours, and stress as specific issues affecting employees all over the world.

Now HSBC’s workers have an organisation which can begin to address these grievances.


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Gary Herman

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