Labour’s unwillingness to state the importance of trade unions: good for business, bad for everyone else

Rachel Reeves gave a speech at Bloomberg yesterday. That Reeves is orating about social security at a financial news company as opposed to – oh I don’t know – a community centre should offer some kind of perspective on the accusations that the Labour Party is anti-business. But I digress.

Reeves’ speech was surprisingly good. For the most part she managed to avoid portraying benefit claimants as Dickensian economy saboteurs which, given the sorry state of political discourse around the issue, is actually quite the achievement. Instead she focused on the fact that the rising benefit bill is a result of low pay, unaffordable rents and a lack of decent jobs. I wonder how much of that message will filter through to an electorate that has been bombarded with unchallenged images of the scrounger parent of 14 feckless children; but better late than never I suppose.

My real issue with the speech was not so much what was said, but what was not said. In an entire analysis of work and low pay in modern Britain, the word “trade union” was only mentioned once – which is the same number of times Reeves referred to tax-avoidance enablers KPMG. Incidentally, KPMG came up because Labour has commissioned its former deputy to produce a report about low wages – which is a bit like asking Dapper Laughs to solve the problem of sexism. Those anti-business impulses at work again, I presume.

Omitting trade unions from a speech on wages is either an ideological move on Reeves’ part or evidence that her analysis is superficial. As I mentioned in the Guardian earlier this week, the UK has some of the worst collective bargaining coverage in Europe. Only Bulgaria, Latvia, Estonia and Lithuania beat us on that front. According to research produced by Class and the Institute for Employment Rights, UK collective bargaining coverage has declined from 82% in the 1970s to 23% today. At the same time, the gap between the highest and lowest paid is now the largest it has been since records began. Trade union density is essential to explaining the wage levels of a country; to barely mention them at all in a speech on pay is nonsensical.

Having said that, the transfer of wealth and power from working people to employers over the last 30 years is not simply a result of the decline in trade union density, but also the power of unions to bargain collectively with employers. An individual worker who is dependent upon their employer for wages is likely to feel to powerless to oppose pay cuts and declining conditions, but a group of workers whose employer is dependent on their labour is likely to be powerful enough to enter into meaningful negotiations. Any measures to improve pay that fail to restore the collective power of workers will be insufficient. The relationship between employer and employee is based upon competing interests, after all.

Sometimes I think only the left is blind to how vital trade unions are; the amount of union bashing the right indulge in suggests they’re well aware of it. Labour’s unwillingness to publicly acknowledge the importance of trade unions in improving pay and conditions is good news for business, despite this week’s theatre. But it’s likely to be bad news for everybody else.

Ellie O’Hagan is the Media and Communications Officer for the think tank Class