‘Labour’s vision for growth must have trade unions at its heart’

Mike Clancy
© godrick/Shutterstock.com

The Economy 2030 project, which publishes its final conclusions today, has been a wake-up call for a UK political debate that has in recent years become increasingly focused on petty divisions and distractions.

A non-partisan wake up call for British politics

Even though it is a non-partisan report, it clearly has Labour in its sights and a prescription for a change of government next year. Its findings should be a stark read for Labour’s front bench laying bare the challenges for an incoming new administration.

For over a decade now we have had an economy that isn’t productive enough, and isn’t distributing the proceeds of its meagre growth widely enough.

These mutually reinforcing failings are locking us into a vicious cycle meaning that, at a time when we need be rising to the challenges of life outside the single market, transitioning to Net Zero, and managing unprecedented technological and demographic change, we are instead on course for the relegation zone among advanced economies.

Growth is needed to get public services back on track

This is why growth is key to Keir Starmer and Rachel Reeves’ missions. There is no dividend to rebuild public services or to tackle living standards without both growing the economy and sharing its take more widely.

The Resolution Foundation’s rigorous and wide-ranging analysis of what it would take to move the dial in key areas also rightly sets a high bar for solutions that are more than mere lipservice to phrases like “levelling up” or “industrial strategy”.

Essential components of this agenda include plans to ramp up levels of business investmentaccelerate the creation of good jobsreboot our export performance and rethink utility regulation to steer and secure the delivery of a new generation of essential infrastructure.

Particular policies and priorities should be tested and debated, of course. But what is not in doubt for any honest look at the problems we face is that the decline in collective bargaining and organised worker voice is not a side issue that can be skirted or greeted with a shrug of indifference, but a fatal weak link that will hamstring any concerted attempt to put our economy on a different track.

Declining worker bargaining power is hurting wages

The Resolution Foundation’s own research finds that the decline in worker bargaining power, the result of decades of de-unionisation along with increased market power of employers, costs the average worker around £100 a week in lost wages, and has been a major contributor to income polarisation.

Recent cross-country analysis confirms that the economies with the most workers covered by collective agreements – such as Sweden, Finland, Denmark, Austria or Belgium – are also those with the lowest inequality.

Trade union representation and involvement is also critical to underpinning corporate long-termism, redesigning skills systems, and bringing worker perspectives and workplace expertise to key questions of industrial policy.

That includes making the most of our comparative advantage identified by the Resolution Foundation in areas like clean energy, aerospace, life sciences, telecoms, computer and information services, and creative industries from film and television to museums and performing arts – all sectors where Prospect has a growing membership.

Trade unionism must be at the heart of rebuilding the UK economy

A strategy to reboot the UK economy that doesn’t include a plan to rebuild the role of responsible trade unionism simply won’t work. But as well as a challenge to politicians and the media, this is a challenge to the trade union movement too.

Are we ready to step up and play our part, or remain content in our comfort zones and our own version of “managed decline”? On the trends of recent years, by 2030 union density in the private sector will have fallen below 10%, and might be nearer 5%.

A modernised framework of industrial relations regulations will help – the Resolution Foundation proposes rights to access new workplaces and reforms to the statutory recognition process – but by far the largest part of the work must fall to trade unions themselves: reaching out to new generations of workers and proving our relevance to new ways of working.

Unions must show their worth to working people

The growing recognition among economists and policy experts that trade unions need to be part of the solution, as already seen with the Biden Presidency in the US, is a welcome step forward.

But the audience we and Labour most need to convince are the millions of working people who for the most part aren’t hostile, but simply don’t see that we can do anything for them.

The years ahead may offer us new opportunities to turn this around. But the window is a short one.

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