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.
Another flashpoint could be Labour’s plans to introduce disability and ethnicity pay gap reporting for large employers. Backdated claims for historic underpayment of women is already forcing councils into bankruptcy and risking conflict with the unions. In Birmingham, which has shelled out £1.1 billion in equal pay claims since 2012, the cash-strapped council is in its eighth week of bin strikes. And the Conservatives will use every chance to depict Labour’s union management as weak and incompetent. The Tory local election campaign has focused on portraying England’s second city as a rat-infested dystopia. ‘Vote Labour, get Birmingham,’ says one apparatchik. Within Downing Street, staff take inspiration from a slogan from the last Labour government: ‘Not flash, just Gordon.’ After 14 years of Tory posturing, they’re keen to stress that any drama will be kept behind closed doors.
‘You have to act like you’re on the unions’ side – even when you’re not,’ explains one Labour source
Responsibility for labour relations has been given to former Unison organiser Claire Stewart. It’s a sensitive role that has tested the most scarred party veterans. ‘You have to act like you’re on the unions’ side – even when you’re not,’ explains one Labour source. In a government where 90 per cent of ministers belong to a union, few boast better links than Angela Rayner. Some within Labour regard the her as the ‘keeper of the cloth cap’, capable of both leading on third reading of the Employment Rights Bill and demanding that Unite settle its Birmingham bin strikes.
These skills will be necessary in handling a new generation of union barons, such as Daniel Kebede of the National Education Union and Eddie Dempsey of the RMT, who were staunch Corbynites. But when it comes to managing the 11 unions affiliated with Labour, the ‘big three’ matter most: Unison (1.4 million members), Unite (1.2 million) and GMB (600,000). They’re headed respectively by Christina McAnea, Sharon Graham and Gary Smith; and each represents a different risk to the ‘Starmer project’. McAnea, a Starmer loyalist, is battling for re-election against a left-wing rival who rails against the government, and her result will be closely watched by other chiefs. Graham, a Starmer critic, leads a union that’s under fire for both the bin strikes and a scandal involving a hotel built with £112 million of members’ money. Smith, a more Blue Labour-aligned figure, has veered between loyalist and critic but is leaning to the latter in his opposition to Ed Miliband’s net-zero drive.
It is here that Labour’s political opponents sense an opening. The Scunthorpe steel debacle has offered an opportunity for Reform UK to move from being simply ‘anti-net zero’ towards advocating full ‘reindustrialisation’: a position designed to entice voters in Labour’s heartlands. Efforts to arrange a meeting between Reform and Smith have so far been rebuffed. ‘He wants to meet – but he can’t,’ claims a Reform source.
Other union leaders have relished taking the fight to Nigel Farage. Paul Nowak, the TUC’s General Secretary, this week dubbed Farage a ‘political fraud and hypocrite’ who is merely ‘cosplaying’ as a friend of the workers. But union members have a history of ignoring their leaders’ entreaties. One in three voted for Thatcher in 1979; four in ten Unite members backed Boris Johnson in 2019. ‘We’re after their members, not the leaders,’ says one Reform aide.
For the labour movement, the challenge is to find areas of agreement. Yvette Cooper’s forthcoming white paper on migration offers such a chance. This will demand that the private sector plays much more of a role in cracking down on the black market in illegal labour – hence recent Home Office raids on takeaways and nail bars. While the Tories in government focused predominantly on border security, unions and ministers hope that overhauling weak labour law enforcement will deter illicit migration.
For now, the Employment Rights Bill has kept union-backed MPs happy. But employment tribunals could become the next battleground. The Bill will grant further rights to new hires on day one of their job. That risks more cases ending up in tribunals, putting pressure on the existing courts backlog.
Those in Labour often describe the relationship with the unions in familial terms. The trade union movement birthed the party, nurturing it for a century. Sometimes, the offspring disappoints the parent. Often, there is mutual embarrassment. Their deep bonds mean a fundamental breakdown is unthinkable. But the grim fiscal outlook means the next four years will be anything but a game of Happy Families.
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