Ed Holmes

Vince Cable dances with the unions

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The Business Secretary’s words to the GMB union today about the government’s reluctance to reform Britain’s antiquated trade unions laws could hardly have been more modest. He called for a ‘mature and productive relationship’ with the trade union movement. Given the reception he received, this seems like wishful thinking (we at Policy Exchange had a dose of the GMB’s approach when it described our recent report on public sector pay as ‘propoganda [sic] in the tradition of reports by Joseph Goebbels’). Despite the heckles, Vince Cable was keen to emphasise that the government has no plans to reform strike laws and that it would only do so if pushed.

It may well soon be. Things have changed a great deal in the past thirty years. Unions only represent a minority of the workforce. Membership has almost halved – with many of the remainder close to retirement age. Less than thirty percent of workers still pay their dues and this falls to just sixteen percent in the private sector (largely concentrated in formerly nationalised industries). This isn’t surprising either: unions find it increasingly difficult to assert monopoly power in a modern market economy, so it makes ever less sense to be involved. The wage premium of comparable union over non-union members has fallen exponentially, especially for younger and private sector workers where it has almost disappeared.

Even those who are members are often inactive – the practice of deducting subs direct from a pay packet (which we believe should be stopped) and the odd leaflet are often the only reminders of a status of which they are semi-aware. This means that those who participate in strike ballots and electing union leaders are often only an extreme minority of the whole. For example, the head of Britain’s largest union, Unite’s Len McCluskey, was elected despite more than 93 per cent of his membership not voting at all or voting for someone else. This leads strident unions to speak with a voice that is simply not that of the majority. Does the average Unite member believe like Mr McCluskey that ‘there is no such thing as an irresponsible strike' and that unions should be ‘preparing for battle’? Would the average GMB member have met Mr Cable’s mention of ‘general strikes and widespread disruption’ – with cheers and applause (see the video above)? It seems unlikely.

The question is whether it is still appropriate to give such extraordinary legal exemptions to organisations that represent only a small segment of the workforce (and, in practice, strike ballots and union leaders who only represent the active, usually militant wing of that small segment). Those exemptions can allow unions to bring public services to a standstill, as several unions will try to do on 30th June. It also threatens public sector workers – union and non-union alike – with redundancy by pushing for wage increases the country simply cannot afford.

The government will soon have to consider whether our trade union laws remain appropriate. It may well be the case that many trade union members will want to strike over the next few years. But with appropriate reforms, we can at least be sure their voice is being properly heard.

Ed Holmes is a research fellow in Policy Exchange’s Economics Unit