Labour’s Most Damaging U-turn
Labour's commitment to reverse the decline of unions is the only way for Britain to end job insecurity and in-work poverty — if this was ditched, it would only show that Starmer is comfortable with bosses reliant on massive exploitation to turn a profit.
The Labour Party leadership is watering-down its transformative pro-trade union policies. (Photo by Christopher Furlong/Getty Images)
Tribune’s excellent article on Labour’s New Deal for Working People, Labour Turns Its Back on Workers’ Rights, highlighted the attempt by factions in the Labour Party to undermine this transformative policy document and, in particular, its commitment to a single status for workers.
Since then, Labour’s Deputy Leader, Angela Rayner, has denied any watering down of the New Deal and reaffirmed Labour’s commitment to it. She is to be applauded for doing so. As Tribune’s assistant editor, Karl Hansen, pointed out, the New Deal was ratified both by the leadership and by Labour Party Conference in 2021 and again in 2022. It drew inspiration from the work of the Institute of Employment Rights over many years and presented an unusual but entirely uncontroversial continuity from the policies of the election manifestos of 2017 and 2019.
The suggestion that the single status for workers’ element, so well described by Karl Hansen, needed further ‘consultation’ was absurd: the proposal had been widely discussed for the best part of ten years. Indeed, my Status of Workers Bill passed through the House of Lords with support from all sides of the House, with only one lone Tory voice doubting that it was necessary. Unfortunately, the prorogation of Parliament prevented it from going further in the Commons and passing into law.
The only objection raised in the labour movement was based on a misunderstanding: it was said that granting full employment rights to so-called gig workers would also lose them the tax benefits of being self-employed. This was nonsense since the single status only affected employment rights and was not directed at tax status, with its separate legal regime. The definitions in tax law will not be the same as in labour law: the extension of labour law coverage does not automatically affect tax law coverage.
Trade Union Freedom
But we should not give the impression that the New Deal is confined to individual workers’ rights. Though these rights are important — and single status is very important, as is entitlement to full employment rights from day one — we want to stress that the New Deal’s proposals to restore trade union freedom to speak and be heard on behalf of working people are yet more important.
In the middle of an economic crisis after forty years of Tory-led de-industrialisation and an unparalleled transfer of income and wealth from wages to profits, the Office for National Statistics (ONS) tells us this month that the value of real wages has risen by just 0.1 percent since 2008. There can be little doubt that what has prevented wages rising to match or overtake the cost of living has been the engineered collapse of collective bargaining coverage.
From the average of 80 percent of British workers having the benefit of a collective agreement between 1945 and 1980 (86 percent of workers were covered in 1976), coverage today is less than 25 percent. That means that wages, terms or conditions for three-quarters of our 31 million workers are set on a take-it-or-leave-it basis by employers. Without a union to negotiate on their behalf, the ONS reports that those on zero-hours contracts have risen to a record 1.18 million. The Joseph Rowntree Foundation says that one in eight UK workers (13 percent) are in in-work poverty, unable to make ends meet or cover their essential living costs.
As the share of GDP going to wages falls (from nearly 65 percent of GDP in 1976 to less than 50 percent today), it is not only workers and their families who suffer. As wages decline, there is a fall in the demand for goods and services. This damages businesses, injures the economy, diminishes the government’s tax take and increases its benefits bill. The OECD and many economists have been pointing this out for many years.
In consequence, the OECD advocates the expansion of collective bargaining coverage. So, and no doubt for the same reasons, does the EU, which recently, after years of undermining collective bargaining, introduced a Directive requiring Member States with less than 80 percent collective bargaining coverage to implement an action plan to achieve that level. In New Zealand, legislation was introduced last year to impose mandatory collective bargaining across the economy. Australia is going the same way.
Collective bargaining also has other benefits, not least in diminishing gender, ethnic and other wage disparities, as well as promoting equality generally. So the New Deal’s proposal for rolling out ‘Fair Pay Agreements’ (compulsory collective bargaining across an entire industry, setting a floor for terms and conditions) for the whole economy — not just in adult social care, as the party is now suggesting — is probably the single most important measure to rescue the working class and the economy from the current cost of living crisis.
But collective bargaining cannot be effective if the workers’ side does not have leverage in negotiations. That means — and can only mean — the threat of an effective right to strike. Whatever some may think, such a right can never be unlimited. But there is no need for argument about the proper limitations on the right to industrial action, as they have already been set by the international treaties ratified by the UK.
The supervisory bodies of these treaties, such as the International Labour Organisation, have many times over many years condemned our current restrictions on industrial action. There is little doubt they will hold that the Strikes (Minimum Service Levels) Act 2023 also violates our treaty requirements. So, the New Deal’s commitment to a set of laws that comply with the UK’s treaty obligations is vital to the restoration of living standards, collective bargaining and, of course, to the Rule of Law, as well as our obligations under the Trade and Cooperation Agreement with the EU.
No More U-Turns
We have identified only the most fundamental of the proposals in the New Deal, which does even more both by way of extending workers’ rights and restoring trade union freedoms so that unions can effectively represent members. Space does not permit us to set it all out here but the New Deal extends across every aspect of the law at work.
Examples include: the use of public procurement to ensure government contracts support quality working conditions and pay to stronger family-friendly rights, including greater rights for carers; closing gender and ethnic pay gaps; tackling socio-economic discrimination; dealing with fire and rehire and zero hours contracts; penalising harassment at work; a right to disconnect; greater powers of enforcement, especially through a properly resourced single enforcement body and full compensation for loss. For trade unions, examples include: a reasonable right to attend workplaces to speak to members, workplace and electronic balloting and elections, and a simplified recognition procedure.
Labour’s commitment to the New Deal for Working People and the personal endorsement of Sir Keir Starmer and Angela Rayner to introduce the legislation to achieve it in the first 100 days of a Labour government is to be celebrated. There can be no retreat, and surely none is intended despite mischievous reports to the contrary. Otherwise, for working people, what would be the point of voting Labour?