The last two and a half years have seen a dramatic revival in trade union militancy, with working days lost through strikes reaching their highest level for more than thirty years. The arrival of a Labour government has already seen markedly more generous settlements than the Conservatives offered – and the new administration has committed to legislation intended to boost union power. It’s a situation that is unlikely to end well – for businesses and for workers.
If the government is not careful, we could end up with a situation like that of France
Keir Starmer has vowed to repeal the Conservatives’ 2016 Trade Union Act (which imposed voting hurdles which unions had to overcome before strike action) and the 2023 Minimum Service Levels Act (which was supposed to provide skeleton services in the event of disputes in key sectors, though it’s never been used). These changes should make it easier for unions to strike and make their strikes more effective. Starmer’s government plans to permit electronic balloting, which union leaders have sought for some time, and to make recognition by employers easier to achieve. There is also a proposed right for union officials to enter workplaces – both real and virtual – to seek new recruits, and a requirement for employers to inform staff of their right to join a union.
Some unionists are pressing for more, arguing for repeal of Thatcher-era legislation which banned unofficial strikes, the closed shops and mass picketing.
Does this mean we are going to see a revival in union membership, currently down at 22 per cent of UK employees from a high of just over 50 per cent in the late 1970s? That seems unlikely. The decline of unionism is only partly to do with legislative changes. There has been a similar decline in virtually all developed countries, many of which (particularly in the EU) positively encourage unions in the guise of ‘social partners’.
The changing structure of the economy, with the decline of manufacturing and extractive industries which concentrated workers on big sites, and the substitution of service businesses spread out in smaller premises, is one factor.
Another is the changing nature of the workforce, with an increase in graduates (with a more individualised lifestyle and greater mobility from job to job) is another. Younger workers just don’t join unions in the numbers they did in the past.
Then there is the huge expansion of employment regulation, with the state often usurping the role of unions: unfair dismissal rules, minimum wage laws, parental leave, equal pay legislation and many other interventions have arguably done far more for low-paid workers in particular than unions ever achieved. And the ballooning growth of the HR profession, driven by the needs of regulatory compliance, has made businesses much more careful to keep workers onside.
As we have seen from recent strikes, unions are far stronger in public sector employment (with 48 per cent in unions) than in private businesses (13 per cent unionised). This is unlikely to change very much, even with government encouragement to join unions. A return to sectoral collective bargaining, which the Labour party favours, seems unlikely. Large private businesses are now often foreign-owned and have policies and procedures across national borders rather than simply focusing on the UK. Dynamic tech start-ups are small and feisty, and as uninterested in national collective bargaining as their staff.
It seems unlikely then that we will see a revival of 1970s-style mass unionisation. Much more likely is that will see new laws further entrenching the power of existing public sector unions, and those in quasi-public sector areas such as the utilities, transport and the Royal Mail. This is still troubling.
Typically, these unions bargain for the whole of a particular workforce, members and non-members alike, so the coverage of collective bargaining is much higher than union membership might suggest: around 80 per cent of public employees have pay determined by union negotiations.
Private sector strikes, while disruptive, tend to be self-limiting, as both unions and management, acting for shareholders, share a concern in keeping a company in business. They are arguing over the share of a surplus generated by productive activity.
In the public sector there is no surplus and there are no shareholders. Strikes and other industrial action (such as overtime bans and working to rule) are aimed squarely at damaging or inconveniencing the general public in pursuit of wage claims. The hope is to get voters – with little choice over education or healthcare, and none at all over the issue of passports or driving licences – so hacked off that the government is obliged to make concessions to the unions.
There is little sign yet of a resurgence in unionisation. Maybe some of the proposed measures will lead to a modest boost to union membership. But it is certainly possible that the powers of a small minority of the total workforce will be significantly enhanced. If the government is not careful, we could end up with a situation like that of France, where unions representing less than ten per cent of the workforce exert extraordinary powers to achieve excessive pay settlements, block reform and thus discourage productivity and employment.
For now, Starmer’s team seems willing to ride the tiger of trade union power. But in pursuing its mission to growth, it could soon run into the same sorts of problems which did for Jim Callaghan, an earlier Labour leader who thought appeasing the unions was a smart move.
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