At the start of February, trade union chiefs assembled in No. 10 with their agenda for government. Top of the list was the Employment Rights Bill, which makes it easier to strike, picket and join a union. It will shortly pass into law: proof, Labour MPs say, of a Prime Minister willing to ignore squeals from business leaders. Yet the danger for Keir Starmer is that the unions, having banked this win, will keep returning for more.
Starmer is perhaps the most union-friendly PM since the 1970s. Staff happily reel off a series of ‘wins’ he has already delivered for Britain’s 6.4 million trade union workers: a higher minimum wage, public sector pay rises and subsidies for Grangemouth refinery. Unions enjoy access to key ministers: towards the end of last year, Bridget Phillipson’s team met a union rep every three days. Yet Starmer might find that, like Harold Wilson, the predecessor he most admires, a promised ‘partnership’ soon turns into an estrangement. ‘In opposition, we promised to get round the table,’ says one aide. ‘But that’s always harder to do in office.’
In an era of stagflation, conflict over pay becomes inevitable. The Bank of England forecasts inflation to rise to 3.7 per cent next quarter, while annual growth remains a feeble 0.75 cent. Officials are bracing for a ‘summer of discontent’, as unions express anger at the pay bumps on offer. Rachel Reeves’s insistence that she’s not prepared to breach the 2.8 per cent affordability cap set by the Treasury means industrial action by teachers, nurses and council workers is a real possibility. Ministers will be forced either to cut their budgets or to face down unions.
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