The Challenge of Deindustrialisation

Deindustrialisation has led to stagnating wages, workplace insecurity and declining union membership. The next Labour government must turn the tide.

Illustration by David Biskup

Durham’s annual Miners’ Gala is always a highlight of my year. The sights, the sounds, the speeches, and, of course, the colliery bands, represent much more than political entertainment. And this year, the thirty-fifth anniversary of the start of the 1984 miners’ strike and the pit shutdowns, puts the Gala in an even more significant place — one from which to consider not just the devastation of our former mining communities, but the deindustrialisation of cities and towns the length and breadth of our country.

Twenty-six years on from the closure of Wearmouth, the last colliery in County Durham, thousands of people in the county are on zero hour contracts or in bogus self-employment, with a higher percentage working in low-paid caring, hospitality and other service sector jobs than in the North East and the country as a whole.

How trade unions respond to the organising challenges presented by the changing nature of work, and the challenges of automation and digitisation will be critical to our success. But at the same time, we must never take our eye off organising in the sectors where we have historic recognition agreements. And neither should we forget the real prize, that which will enable us to achieve an impact across all sectors: a Labour government.

The destruction of British manufacturing might have begun with Thatcher’s neoliberal economics, but successive governments allowed labour to be discounted in the drive towards a flexible, predominantly service sector economy. Let’s never forget that under New Labour, one million manufacturing jobs were lost. Neither Blair nor Brown recognised the central role that a vibrant manufacturing sector plays in securing an economy with living wage jobs and decent public services.

In 1970, manufacturing accounted for 27% of all of Britain’s economic output. However, by 2017, it stood at just 10%. In every other major European economy — France, Spain, Italy, and Germany with 23% — manufacturing has a higher share. Over the last 30 years, service sector output in the UK rose by 97%, and by 2017 it was 79% of the economy, up from 69% in 1990. By September last year, services accounted for 83% of workforce jobs.

The UK is now in the grip of a manufacturing emergency. The latest economic figures show manufacturing has shrunk 3.9%, with motor vehicle production plunging by a record 24%.

It’s not just the lack of a coherent industrial strategy to bring unions, government, and industry together that’s caused this shift to a short-term, precarious, low-pay economy. Anti-union laws have had an impact too. Trade unions are central to our democracy, necessary to deal with industrial and investment questions. Yet the fundamentally undemocratic restrictions imposed on us have undermined our ability to organise workers and assert our influence.

The dramatic changes the Tories made to collective bargaining during the 1980s also made it much more difficult to organise workers on a sectoral basis. Up to then, for millions of people, living standards had taken great strides forwards. But collective bargaining coverage slipped so that by 1990, with the Thatcher laws in place and market deregulation underway, it had fallen to 55 per cent. By the turn of the new millennium, only one in three workers was covered by a collective bargaining agreement.

It is no accident that the labour share of the income in the UK has fallen from a high of 70% in the 1970s to around 50% today. Any A-level economist could tell you the devastating impact that has on an economy. It was a direct result of deindustrialisation and deunionisation. Yet New Labour did nothing to stop this trend, meaning that the challenge we face now to turn around the race to the bottom is all the greater.

Let’s not kid ourselves that trade unions can do this without a progressive Labour government. It’s time to reverse the anti-union laws which shackle us and give us proper access to workplaces, to abolish zero hour contracts, and agency worker abuses, and to restore national and sectoral collective bargaining. But more than that, we need an integrated industrial and procurement strategy with real investment coming through a national and regional investment banks. Only by these measures can this period of political and economic uncertainty end with improved conditions for workers.

It isn’t only the damage of recent decades that needs to be grappled with — automation and the fourth industrial revolution present huge challenges for workers and require a political response. Should automation only benefit capital, or should it be used to reduce the burden on workers? In the hands of big business, it can only be a threat to jobs and wages.

Research conducted by Unite has identified more than 650,000 members working in sectors which are at risk of losing their jobs through automation — over 231,700 of these by 2035. Our research also suggests that a higher percentage of roles filled by women workers are at risk, a perspective that the Office for National Statistics concurs with.

Automation can do much to change the lives of working people for the better. It provides the prospect of shorter working weeks, with no loss of pay — which is why Lord Skidelsky’s inquiry into shortening working time is so important. Skidelsky recommends investing in automation and improving flexibility in the public sector as a starting point on the road to a four-day week. This would help workers to stay in work when new technology reduces the number of tasks that need to be done.

But automation must also be the gateway to a nationwide programme of re-skilling and up-skilling of existing workers. It can be the catalyst to creating new, high-quality apprenticeship schemes, as well as training for jobs in programming and operating the technology. We urgently need government to take the lead in setting up a Future of Automation Commission, involving unions, employers, researchers, and academics to find the best solutions to automation, looking at both its opportunities and threats.

It is the refusal by the Tories to engage with trade unions as industry partners that makes automation something to be feared. Recently, an auto industry boss pointed out to me that all the robots working alongside Unite members on the shopfloor were made in Germany. That wasn’t his choice, but no one in the UK is making the robotic technology his company needed. That is a profound failure of industrial strategy.

It is no coincidence that thousands of small and medium-sized businesses, on which we’re so reliant to generate wealth in the post-industrial economy, remain unable to get the loans they need to expand. Britain can’t hope to be at the forefront of responding to historic workplace challenges without better economic planning.

Unions are a predictor of the changing world. Through our members, we see the developments and analyse long-term trends in our economy. We hear workers’ anecdotes and do the research to explore their observations and fears. It would be almost impossible to understand the changing nature of work without unions — and yet we continue to be marginalised by the media and the government.

So, it’s up to us to fight for our position in a new society: socially-planned and controlled by a left Labour government, with powerful unions and civil society involved in charting our way forward. Reindustrialisation and automation can be steered in the right direction and its benefits reaped by society. We don’t need to look to the future of our economy with trepidation and fear. Together, we can fight for something better.