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Starmer’s Worst U-Turn

New Labour’s refusal to release Britain’s trade unions from Thatcher’s restrictions entrenched decades of national decline.

Peter Byrne / PA Images via Getty Images

During the general election campaign of 1997, Tony Blair, in an article in The Times titled ‘We Won’t Look Back to the 1970s’, reassured readers that the changes to trade union laws being proposed by New Labour would ‘leave British law the most restrictive on trade unions in the Western world’. The opinion piece was an effort to shore up support from business and media interests on the first day of Labour’s campaigning, after the Tory party had apparently bewailed Britain’s imminent return to the picket lines of Grunwick or Wapping under a Labour government. Not to fear, Blair said: ‘[T]he essential elements of the trade union legislation of the 1980s will remain.’

The 1980s Thatcher-era anti-union laws to which Blair was referring defanged trade unions by severely restricting their ability to recruit and organise members and by making effective strike action unlawful. New Labour’s decision to keep this legislation in place ultimately ensured the continued decline of the workers’ movement which that decade had heralded. Between 1979 and 2010, the proportion of workers represented by trade unions more than halved, and the proportion covered by collective agreements fell by two-thirds — more than in any other advanced economy.

The consequences for the working class were disastrous. The link between economic growth and wages was severed, causing poverty to soar and insecure working practices to explode. The influence of trade unions on national politics was also severely curtailed, undermining the ability of the organised working class to meaningfully oppose the vast privatisation of state assets in the ’80s and ’90s and, later, the assault on the welfare state during the 2010s austerity.

It’s no wonder Margaret Thatcher called Labour’s acquiescence to restrictive trade union laws her ‘greatest achievement’. By design, the balance of power in the workplace and the country was tipped away from workers, enabling an upward transfer of wealth that has defined Britain ever since. As it happened, this was not just a disaster for working people, but damaging for the economy as a whole, too, with even pro-market institutions like the International Monetary Fund (IMF) and Organisation for Economic Cooperation and Development (OECD) blaming the lack of collective bargaining for Britain’s more recent economic woes.

Today, just as then, the Labour Party is headed towards a seemingly inevitable landslide victory against an exhausted Conservative Party. And today, just as then, the question of whether the party will decide to unshackle Britain’s trade unions will be a defining feature of its time in government.

A Trail of Broken Promises

Soon after being elected leader, Keir Starmer instructed his then shadow employment secretary, Andy McDonald, to work with the party’s affiliated trade unions to draw up plans for the most significant strengthening of workers’ rights in a generation. The result was a White Paper titled ‘A New Deal for Working People’.

The New Deal set out plans to do two things. First, it would bolster the individual rights and protections of workers. Second, it would unshackle trade unions to revive effective collective action, in order to ‘fundamentally change our economy so that Britain works for working people’.

This, at first, seemed like evidence of Keir Starmer’s determination not to repeat New Labour’s historic error, and for a long time afterwards, through all the other U-turns and broken promises, it was the one genuinely radical pledge on which he did not renege. The Labour leader paraded the document at the Trades Union Congress and iterated his ‘guarantee’ to bring it into law ‘within the first 100 days of a Labour government’. In recent months, however, this resolve appears to have weakened.

It is worth stating that the New Deal has not yet been completely gutted. The party is still committed to outlawing fire and rehire, granting trade unions rights to access workplaces, and repealing the 2016 Trade Union Act, which imposed thresholds to prevent strike action even when there is the support of the majority of voting members. Yet even these changes would still leave Britain with the most hamstrung trade unions in the Western world.

The guiding principle of the New Deal’s reforms to individual workers’ rights was universalism — the idea that everyone should receive basic rights and protections on which they can build a stable and fulfilling life. To achieve this, it was judged necessary to overhaul Britain’s tiered system of employment rights.

At present, British law allows three tiers of employment: ‘employees’, who have full rights; ‘limb (b) workers’, who have some limited rights such as national minimum wage and sick pay entitlement; and the bogus self-employed, who have no employment rights at all. The New Deal pledged to ‘create a single status of “worker” for all but the genuinely self-employed’ and to ‘give all workers day one rights on the job … by ending the qualifying periods for basic rights’.

This has now been replaced with only a vague undertaking to create a ‘simpler framework’, fatally undermining the universalism promised in the New Deal. This change was intended in large part to respond to tech companies like Amazon, Deliveroo, and Uber, who have in recent years utilised new technologies to usher in hyper-exploitative employment practices that have become common across large parts of the economy.

In effect, the U-turn is a green light for hyper-exploitative gig economy practices to continue, and for workers to be denied time with their newborn children and protection from wrongful dismissal. It will maintain a precariat of workers, too, making all workers in turn less secure and therefore less able to demand higher wages and better working practices.

And it’s not the only change. The New Deal also pledged to roll out what it called ‘Fair Pay Agreements’. These agreements were modern Labour’s term for sectoral collective bargaining, whereby trade unions and employers negotiate minimum terms and conditions that apply to entire sectors of the economy.

If instituted, the agreements would have created a floor on pay and working conditions in the most exploitative parts of the economy, such as agriculture, hospitality, and delivery services. In recent months, however, this commitment was quietly downgraded to a ‘trial’ in adult social care, with little sign of any ambition from Labour to carry it further.

Next, in perhaps the most controversial development, the party has also rolled back on its pledge to outlaw zero-hours contracts — a Labour policy even under Ed Miliband’s milquetoast leadership. Labour now only pledges to ban ‘exploitative’ zero-hour contracts, suggesting that non-exploitative zero-hour contracts will continue, despite the fact that their one-sided flexibility for bosses and insecurity for workers are exploitative by their very nature.

The last change addressed here is probably the most egregious. The boldest of the New Deal’s pledges was to bring the UK trade union law into compliance with the obligations of its international treaties. This would mean reversing and removing various restrictions on unions, including those that prevent contact with workers and access to workplaces, as well as those that prevent and delay strike action, giving bosses unfair advantage.

It would also mean abolishing the legislation that prevents workers from taking solidarity action with other workplaces, sometimes termed ‘secondary action’ or ‘sympathy strikes’. Solidarity action is the practice that built trade unions as we know them today, and made possible victories such as the 1889 London Dock Strike when workers in factories and workshops downed tools in solidarity with dockworkers, and the 1972 Miners’ Strike when railway workers refused to transport and power station workers refused to handle coal — but it was made illegal under Thatcher. That illegality meant the organised labour movement was unable to prevent P&O Ferries’ illegal sacking of 800 workers in 2022 and British Gas’ firing and rehiring of 700 boiler engineers in 2021. And it prevents Amazon workers fighting for better pay and dignity at work from linking up to put real pressure on the tech behemoth.

Despite all that, the commitment to liberate trade unions by reversing suffocating bans on strike action in the ‘New Deal for Working People’ has now vanished from the party’s public commitments.

Zombie Blairism

To understand Labour’s volte-face on workers’ rights, it is worth considering the shifting circumstances in which the Starmer leadership has operated. The New Deal was agreed in 2021, before the Partygate scandal and the Tory collapse, at a time when Keir Starmer needed to hold together his coalition. Since then, the Conservatives’ implosion in the polls appears to have emboldened the right-wing clique surrounding the Labour leader to forge its own path.

Peter Mandelson, a New Labour figurehead brought back into the fold as one of Starmer’s closest advisers, has publicly cautioned against ‘tilting’ towards trade unions, criticised Unite for striking, and defended the ‘flexibility’ of the labour market, echoing Tony Blair’s euphemistic pronouncement in his 1997 article that ‘[T]he future of the workplace lies in the partnership between workforce and management, not conflict.’ This counsel has coincided with the party cosying up to lobbyists from the nation’s most unscrupulous employers and accepting large donations from predatory business interests.

The return of key Blairite characters reflects a strategy intended to replicate the success of 1997 — one those characters no doubt feel their double-digit poll leads vindicate. But the circumstances Starmer is set to inherit are drastically different. New Labour came into power at a time when the economy was booming, private sector wages were on the rise, and increased tax revenues allowed significant boosts to public sector pay and investment in public services. There was a relatively pacified workforce, with only limited calls for fundamental change.

In 2023, in large part thanks to the failure of earlier governments to repeal the restrictions Thatcher placed on our trade unions, Britain is staggering forward having experienced the worst period for wage growth since Napoleonic times. In this broken status quo, trade unions have undergone a revival and are more assertive and combative than at any time in decades — but the effectiveness of their action will be blocked as long as the unjust legislative barriers remain.

Starmer and his shadow chancellor, Rachel Reeves, have repeatedly opposed real-terms pay rises for striking workers and ruled out any redistributive taxation, and are now backsliding on pledges to give workers the power to win higher wages themselves. The belief that 1990s technocracy is an evergreen trick is a fantasy: unless the party corrects its course, things can only get bitter.