Government, industry and unions will need to change if the UK is to be globally competitive and create more good, productive and sustainable jobs. Trade unions must enter a period of meaningful modernisation to complete their part of the bargain
The world of work is changing faster than ever. That presents a challenge, not only for government and industry, but for the millions of people in the UK who manufacture, build, service, create and care. It also presents a challenge for trade unions like my own – Community. How do we support workers facing this new economic reality? There are more small and micro businesses than ever; only 16 per cent of private sector workers are members of a union; and people are likely to change their job seven, eight, or even nine times throughout their working lives. For too many people the reality of working life is one of insecure employment, relatively low pay and poor quality work. The Smith Institute’s ‘Making Work Better’ project has examined a series of recent studies of work in the UK and estimates that around 12m people are unhappy with some aspect of their employment – from anxiety about loss of job status to actually losing their job and lots more in-between.
The Shadow Business Secretary, Chuka Umunna MP, has outlined the challenge of creating inclusive growth: how to generate broad-based success that enables all to contribute and to achieve their aspirations. If we want an economy that works for everyone then an incoming Labour government will have to take an active approach to make sure it happens.
It’s not just about government; industry has to show leadership too. Long-term thinking, collaboration and investment in people is the route to improving the UK’s poor standing against other major economies in terms of productivity and GDP. It’s also about trade unions – which have a moral and economic obligation to help their members and the country more widely to play a part in rebuilding the UK economy.
To meet that obligation trade unions must enter a period of meaningful modernisation – looking to the future rather than relying on the past. Attempting to encourage this, the last Labour government introduced the Union Modernisation Fund, which supported projects to help unions modernise their structures and processes. While there were merits to supporting this kind of activity at the time, the change we must see from unions now needs to be about culture, language and approach. If we make these changes then the structural developments that are required to ensure that unions can provide relevant and fresh services that appeal to the millions of workers who are not in a union will naturally follow.
Trade unions need to be more honest and recognise that the image of the trade union movement is not generally positive. Responsible trade unions are a force for good in the workplace and in communities. On a daily basis trade unions are making workplaces safer, smarter and stronger – helping businesses compete globally, delivering public services more efficiently and encouraging long-term thinking. Our problem is while this approach is recognised by those involved it does not reach beyond a very narrow section of industry and society more generally. For that to change, not only must we moderate our language, but we also need to promote the work we do in partnership with employers and be proud of the successes we share – many of which mean our members have been valued at work in some way.
If the UK is to be globally competitive and deliver public services in the most effective manner then that will require clear leadership from an incoming Labour government to ensure modern industrial relations are prevalent across our economy. In 1997, Labour established a Partnership at Work Fund, which facilitated significant industry-level and workplace engagement between trade unions and employers. This initiative had a particularly positive impact in the manufacturing sector, which was under pressure at the time from emerging low-wage economies and currency pressures from being outside the Eurozone. However, it was not as successful as hoped. Following a lukewarm evaluation of the fund and a change in approach from many of the new trade union general secretaries elected in the early 2000s, the fund closed in 2004 with only a handful of strategic projects surviving.
The Partnership at Work Fund was an example of a non-legislative measure introduced by government to enhance productivity and indirectly modernise trade unions. For the last ten years since it was abolished, there has been very little to fill that gap and there must be a more active approach. There is an opportunity to do this by developing an overarching industrial strategy with sector specific strands. This could not only provide a framework for collaboration between businesses and government, it could also drive co-operation within businesses, between company representatives and unions. A simple way government could further encourage this is by giving greater weighting in its consultations to responses that are submitted jointly by employers and unions.
An excellent example of how partnership working can happen organically and have a real impact occurred when the former Tata Steel plant in Redcar was mothballed in 2010 following the economic crisis. Community worked closely with the management of the plant to minimise the impact of the closure, helping to prevent compulsory redundancies. This helped secure a new owner and investment in the plant from Sahaviriya Steel Industries (SSI), a Thai firm that offered the hope of bringing steel making back to Teesside. Since SSI took over the plant, Community has worked to modernise the conditions of employment in an industry that witnessed little structural change around working conditions for many years. This was a challenging process, but as we now reach the other side of this endeavor, the union and SSI can feel vindicated by the approach taken over the last three years. When organisations are forced to respond to circumstances often beyond their control, coming together to work in partnership can transform the expected outcome.
Another area where the UK lags behind our global competitors is in employee participation, which in many ways is connected to the problems we face in terms of productivity. According to the European Participation Index, the UK has the worst record for employee participation in Europe. While the circumstances with SSI in Redcar show what can be achieved when reacting to a difficult situation it seems wholly counterproductive that more employers in this country do not seem to want to engage more regularly with their employees or unions on matters that affect the business and the people who work in that business.
I’ve lost count of the times I’ve been involved in meetings with companies facing problems and a positive suggestion has emerged from the trade union ‘side’ of the table which has led to jobs being saved, new work being won or more productive working practices being introduced. Sadly, this type of strategic engagement doesn’t happen enough. It is clear that there needs to be a massive culture change across British industry to involve employees more closely in the businesses where they work. Through deeper engagement between employers and employees, businesses will be better able to tackle the issues that arise, seek out new business opportunities and fix problems before they happen.
The development of an active industrial strategy that fosters strategic, tripartite engagement between business, unions and government would ensure a long-term approach from employers. Ed Miliband often talks about the ‘race to the bottom’ – competing with other countries as a low skill, low wage economy – and he is right to be concerned. It is a concern that employers tell me they share too. They feel that the current hands-off approach from government is hurting the UK economy.
Developing sector-specific industrial strategies is not only about crafting a plan for each sector it is about ensuring that there is more effective use of the levers available to government in areas such as procurement, taxation and skills policy to support that plan. Procurement is probably the most frustrating aspect of the current hands-off approach from the coalition. If public sector contracts can be weighted heavily towards company A, because of its lower price as opposed to company B, which has slightly higher costs but will train more apprentices, then it is obvious there is a structural problem within our procurement policy. This creates a false economy, saving small amounts in the context of government spending while at the same time storing up bigger issues for the future, such as skills shortages, a lack of vocational opportunities for young people and the cost of state support for underemployed workers.
Yet, where decision makers are prepared to take a more measured approach success can be found. Royal Strathclyde Blindcraft Industries (RSBi) is one of the country’s leading examples of social enterprise, successfully combining commercial success with socially responsible practices – with disabled workers being the vast majority of its employees. Community works in partnership with the RSBi and the industrial relations are modern and constructive. The two partners have worked together to call on the Scottish Government to adopt a procurement initiative whereby buyers can reserve contracts for supported businesses under Article 19, an element of a 2004 European Union directive. This has since been used extensively to ensure employment and apprenticeship opportunities for disabled workers in RSBi. It has also led to the company being able to compete more effectively for contracts that are not reserved for companies like RSBi, because of the productivity gains achieved through this innovative procurement process.
Workplaces where employees feel secure, have opportunities for self-development, receive fair pay and feel valued are more likely to be high performing. These workplaces represent what inclusive growth might look like. People will be happier at work if they feel rewarded appropriately and secure in their employment. I hope they will be even happier if they are represented by a professional trade union that strives to support their journey through working life.
To generate more inclusive growth, Government, industry and unions will each need to change. We need an active government that drives improvements in industrial relations to engage employees, create sustainable employment opportunities and provide ongoing productivity improvements, with a procurement policy that recognises those prepared to invest in skills. We need industry to be prepared to take a longer-term view, to invest in skills and to work in partnership with their workforce and their representatives. Finally, we need a more responsible trade union movement that acknowledges we can reach new members – and represent our current members more effectively – by ensuring our reputation is enhanced in society.
To deliver this final change, there needs to be strong leadership within the trade union movement. The need for change is best summed up by a long-standing member of Community, who wrote:
“Somehow we must capture the goodwill of the British people all over again. We have to let the public see the better side of trade unionism – all the millions of hours of voluntary work that trade unionists do up and down the country, week-in, week-out.
“The way which we care for our sick and elderly workers, our pensioners, the way which we support our communities, welfare centres, social clubs and all sorts of facilities for young people; the way in which we help to run our town councils, sit on the bench of the nation’s magistrates’ courts and play a part in the cultural, artistic and religious life of the nation.
“The vast majority of trade unionists, like the rest of British people are hardworking, loyal and patriotic. Yet this is not the image the public has of a trade unionist. They see only the bawling, yelling, sloganising ranter, the work-shy, idle card playing, shop floor worker or striker.
“These false images have to be removed before it is too late, and we must use every technique in the book to bring about a change in the public’s perception of who we are and what we do… to see the day when Britain’s trade unionists are more influential than ever before – not because of the power they can employ – but because of the contribution they make to the life of the nation.”
Those are the words of 94-year-old Bill Sirs – former General Secretary of one of Community’s founding unions the ISTC. I chose those words, not just because of the sentiment and message that lies in them, but to illustrate the scale of the challenge facing trade unions in being a voice for those who need to benefit from inclusive growth. Bill wrote those words in 1985 and little has changed in almost 30 years – that isn’t an option for the next 30 years.