This week marked the 20th anniversary of the National Minimum Wage Act, perhaps the most groundbreaking piece of legislation passed by the last Labour government. Reaching the milestone in itself is half of the achievement. The minimum wage has withstood nearly a decade of a Conservative government that has at best a mixed record on workers’ rights and the low-paid, and has been uniformly regressive on union rights. Let’s not forget the political opposition to the minimum wage (and not just from the Conservatives). The minimum wage is testament to the idea that progressive and lasting change can be achieved in the teeth of ferocious opposition from the voices of the business lobby and some politicians.
These lessons should inform the next Labour government if it is to meet its transformational aims. There is scope for significant progress in the field of employment rights and protections in the coming years, but it will all be for nought if it is vulnerable to a subsequent change of government. This is especially true when it comes to strengthening the role of trade unions. We have learnt from bitter experience in recent years that there is little that Conservative governments love more than stripping unions of their rights, therefore when designing policies in this field there must be extra attention paid to future-proofing them against Conservative governments of a particular complexion.
The context is one where unions are struggling in an extremely hostile policy environment. Whilst employment levels are at record levels, union membership has continued to fall from 13 million in 1979 to just over six million today. In the private sector, only 13% of workers are members of a union, and just 15% are covered by collective bargaining. Union members are also getting older on average and many younger workers have no experience of collective bargaining, or are unaware what it is. If you believe, as I do, that this state of affairs is not only bad for workers but bad for the economy, then it is something that must urgently be addressed. Labour has already described policies on establishing a new Ministry of Labour, and on worker share ownership and other areas, but is rightly taking time to consider what the policy approach would be for employee relations.
So what are the lessons that must be learnt? The first is that concerted business opposition can be overcome if the policy is right and it has enduring appeal. This might well be even truer today in the post-crash environment than it was in 1999. In recent times, we have seen the limitations of campaigns based on dire warnings from business and open letters to The Telegraph from captains of industry. But we must also be honest that the public imagination has not exactly been captured by warnings about threats to workers’ rights or complaints about diminishing union power either.
This leads to the second lesson, which is that the language and framing of policies in this regard must be focused on the tangible positive impacts they will bring to the lives of working people, not just institutions. The government could probably abolish the Low Pay Commission overnight without much public outcry. How many NMW workers even know what it is? But they cannot abolish the minimum wage because it is something that millions of workers understand in a very real sense. Future Labour policy should focus on giving workers, individually and collectively, rights that they understand and value, not simply on creating potentially remote institutions.
It is for this reason that I am sceptical about the claims made in favour of the wholesale adoption of a sectoral approach to collective bargaining. There are clearly advantages to sectoral models, but there are also huge risks involved. I fear that sectoral bargaining would force unions to be ever more centralised, at exactly the time when we should be doing our best to be adaptable, listen more and stay relevant to modern workspaces and the variety of occupations. I question whether overarching sectoral structures would discourage workers from joining unions as they calculate they can get all the benefits without paying the subscription fee, magnifying existing ‘free riding’. Put simply, is our model to be more like France, with high levels of collective agreements but low levels of union membership? Or the Scandinavian model, where collective agreements are matched by high levels of activism and membership at company level?
Most of all, I see a distinct risk that a future government would expend huge energy and political capital in creating such a system, including corralling employers into working collaboratively together in a way that has become totally alien to them in the UK, only to have it dismantled fairly easily by the next Conservative government with little political cost.
This could become an electoral liability rather than an asset to Labour. We have fallen so far from the 1970s that to confront employers with notions they have no concept of risks losing all that we want to achieve here. Like it or not, a renaissance of collective bargaining needs both the fundamental policy shift envisaged by Labour, but in a form and with a programme that deals with where we are now.
That is why Prospect has been championing the idea of a new ‘right to a collective voice at work’. This would impose a duty on businesses with over 250 employees to bargain collectively with their staff on pay, terms, and conditions. If staff wanted to exercise their rights through a staff council, that would be up to them, but unions would be able to organise these workplaces, which cover about half of the private sector. The test would be that any such employee body is independent of the employer, ruling out sweetheart deals or sham bodies.
Such a right could dramatically improve the conditions for union organising and membership, and by doing so embed a culture of collective bargaining across the economy in a way that would be difficult to reverse, even if the legislation was repealed. The default for organisations of this size would be independent collective voice stipulated by law but with some freedom to shape those arrangements in their circumstances. This should be positioned by Labour as giving people a say in their workspace and then unions making the positive case for being the best vehicle to make these worker rights effective in practice.
Union membership should be based on choice. Unions need to win over new members by demonstrating their relevance, even more so in a workforce that has less knowledge of unions than ever before. The role of government should be to ensure we have the rights and framework to deliver on members’ needs and that employers or engagers can no longer refuse ‘recognition’.
Something clearly needs to change in the balance of power in the workplaces and workspaces of the UK. This is where Labour are absolutely right in their analysis. The current system, which embeds employer prerogative, is not only bad for workers, but holds back the productivity of businesses and by extension the whole economy. Today’s generation is one in which autonomy is important. Neither corporate power nor top-down union solutions fit that world. With an election potentially around the corner, it is always worth reflecting on how lasting change has been won in the past, and using that as our guide for creating a better world that endures.