It strikes me that one of the least reported stories here in the UK is the state of the trade union movement. Amongst City investors I think a consensus has emerged which suggests that they don’t really matter, except for the future of the Labour Party. Thatcher beat the unions, membership numbers are in retreat and we shouldn’t really care.
I beg to differ. Almost unreported a whole generation of big trade union leaders are retiring (or being forced out, depending on your take) and will be replaced with a younger generation of bosses. My guess is that many of these new faces will be from the ultra-Left or the Hard Left. These are people who will view Keir Starmer with growing suspicion, and they will also be even more instinctively hostile to any conversation with the government or businesses. In a word, we are drifting towards an even more hostile union movement, akin to the French hard left unions such as the CGT. This will serve to reinforce the conventional narrative amongst many in business that the union movement is making itself irrelevant, despite the efforts of Frances O’Grady, the sensible boss of the TUC who has tried to strike a more emollient tone.
Unfortunately, this consensus narrative from the City is flawed I believe. My hunch is that we are entering a new era where the boundaries between Labour and Capital are shifting. Big business has been in ascendancy for many decades and has been allowed to consolidate and push up profit margins, which have in turn mightily greatly benefited investors. You don’t have to be a raving Marxist to understand that the post WWII consensus has unravelled and that management has come out on top. This has been good for investors, but I would suggest less good for many ordinary workers, especially those who are paid less than the average.
Again, one doesn’t have to be a Marxist to accept that a fairer settlement for the ‘left behind’ might make some political sense, even for a Conservative government. To date that attempt at balancing Labour and Capital has largely taken place through mechanisms such as the increasing minimum wage and the living wage. But we can’t keep pushing up the minimum wage without encountering real labour market challenges. And much of the growing frustration of many lower paid, especially freelance labour, is now around working conditions and security. These can and will be addressed through changes in labour laws, but it strikes me that a much more durable settlement would be reached if we had better, more co-operative unions willing to engage in dialogue with business and government. In the US, rumours abound that Presidential candidate Biden might well concede the principle that unions can negotiate across a whole sector, even for those who aren’t in unions. This model is widely used in Europe (Sweden and France , two big contrasts in effectiveness). My sense is that it could end up happening in the UK at some point. The Corbynites and John McDonnell were keen on this idea at the last election and I have a hunch it might survive in the new Starmer formulation.
But even this sector wide bargaining power isn’t adopted, I think it hard to argue with the idea that effective unions are a great counterweight to corporate power. Sensible, pragmatic unions can fight for workers and achieve valuable change which can be useful for the whole of society, and – a heretical thought here – be good for business in a new ESG friendly normal.
Sadly, though there is a problem. Most of the media have failed to report that there has been a tectonic change in the UK trade union movement over the last few decades. I like many grew up with constant news about pragmatic bosses battling radical bosses. I’m afraid the radicals have won. A whole generation of leaders have taken over who are fundamentally Hard Left, many straight-out Marxist. And I see no hope of change.
And what’s made this even worse is that the myriad unions of my childhood have been consolidated into mega unions, where the (Hard left) activists can control all the levers of power – and member voter turnout is sometimes dismally low. This helps no one in my view, except the Hard Left. We need more pragmatic union bosses who can hold a sensible dialogue with business (think of the shenanigans going on at the moment around BA for instance) and government. These pragmatists might even be able to achieve policy objectives that help a great mass of workers who aren’t members although I admit that that is my own (business friendly) social democratic worldview expressing itself there. But if investors do start to take the S in ESG seriously, I see no way of avoiding building a better relationship with the workforce. Some businesses will attempt that through worker reps and maybe informal councils. Good on them but that isn’t a systemic answer and can easily be abused. Better to accept that a sensible union can be a sensible partner. But we don’t have many of those left although I sense that USDAW and Community are much more realistic. If that is the case, then I think the wider stakeholders in business and the economy need to take an interest. We should be sponsoring pragmatists and realists in the trade union movement and encouraging those members who want to fight back against the Hard left activists. All of us need to take an interest in the trade union movement – if we don’t it’ll have harm all of our economic prospects.