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Monday, September 14, 1998 Published at 06:05 GMT 07:05 UK

'Hours from recession'

TUC leaders will issue warnings over the economy

A senior union leader has warned the UK is just "hours away" from a recession, as the campaign for a change in government economic policy gathers steam.

Real Video: BBC Business Correspondent Jonty Bloom previews John Prescott's conference appearance
Another union official has complained of the "open season" on job losses as thousands of redundancies hit factories across the country, mainly blamed by unions on the strength of sterling and high interest rates.

On the eve of the TUC Congress in Blackpool, the Amalgamated Engineering and Electrical Union and the Manufacturing Science and Finance Union joined forces to launch an alliance aimed at averting another recession which could cost tens of thousands of jobs in the UK.

The BBC's Stephen Evans: "There may be a lot of shouting"
The alliance called on the Bank of England's monetary policy committee to give equal weight to employment when it next considers interest rates cuts.

AEEU General Secretary Ken Jackson said the "terrible twins" of high interest rates and a strong pound were threatening a return to the late 1980s recession, which destroyed 40% of British industry.

"I had discussions with a major high street electrical retailer last week and they told me that we are just hours away from a recession," he said.

MSF General Secretary Roger Lyons said many manufacturing firms were now facing a crisis.

[ image: Bill Morris: Urged euro slow-down]
Bill Morris: Urged euro slow-down
"The media is full of human tragedies from towns where people are finding that through no fault of their own their customers are disappearing.

"We are facing an open season on job losses and something has to be done."

Mr Lyons has also called for a task force to be set up to develop a forward-looking strategy for manufacturers.

Stephen Evans on what to expect at the conference
The union leaders said employers supported their campaign, which will be pressed on the Governor of the Bank of England, Eddie George, when he addresses the conference on Tuesday.

Another leading union, the GMB, has tabled an emergency motion to the conference attacking Marks & Spencer for advising suppliers to consider sourcing more work abroad.

The union called on the high street giant to reconsider its strategy which it warned could hit 60,000 textile jobs.

'Don't panic'

TUC General Secretary John Monks said he did not want to talk up the threat of a recession, preferring the Corporal Jones "don't panic" approach.

But he admitted he was concerned about the country's economic outlook and said unions wanted a change in government policies.

Meanwhile, a split was emerging between unions over the TUC's support for a single currency after Bill Morris, General Secretary of the Transport and General Workers' Union, issued a warning about the employment consequences about EMU.

Mr Monks said the TUC was probably ahead of some unions over EMU but he attacked the "general level of apathy" over the single currency, even though other European countries would be launching EMU in a few months' time.

Mr Morris said there was a conflict between the single currency and full employment.

He said: "The TUC's current economic strategy calls for a controlled fall in the exchange rate for eventual EMU entry.

"The TUC is going down this road at excessive speed without due care and attention.

"We don't want to stop the journey necessarily but just to slow it down so we can at least read the map."

No stop-go measures

The Congress will be addressed by five Cabinet ministers, including Deputy Prime Minister John Prescott and Trade and Industry Secretary Peter Mandelson.

Mr Prescott will warn the conference that the government will not change direction on the economy.

He will stress there can be no return to "boom and bust and no short-term stop-go measures".

Mr Prescott will remind delegates that the government-engineered boom of the 1980s led to a recession which wiped out millions of jobs and saw interest rates rise to 15%.

In advance of his speech on Thursday, Mr Mandelson has received a cool response from the TUC general secretary after he praised privatisation as a great British success story.

On a trip to South Africa aimed at winning orders for British firms, Mr Mandelson said he was enthusiastic about privatisation and believed Britain could offer a wealth of help and advice after the successful sell-off of firms such as BT and British Airways.

But Mr Monks did not agree. He said privatisation had often led to massive improvements for shareholders and major job losses among workers.

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