In opposition, Sir Keir Starmer said he would repeal Tory measures to limit the right to strike, while keeping a distance between Labour and trade unions leading strikes. In office, he has moved swiftly to identify with the labour movement. Sir Keir’s deputy, Angela Rayner, this week issued instructions to disregard a Tory law that forces workers to provide a minimum level of service during strikes. Days earlier, the chancellor, Rachel Reeves, awarded above-inflation pay rises to millions of public sector workers and settled a pay dispute with junior doctors to end industrial action.
These are necessary and welcome steps in the right direction, away from a model of employment that sought economic growth by making workers poorer. Under the Conservatives, Britain did not correct the imbalance of power between labour and capital. The need for change had been widely accepted. In 2019, the Organisation for Economic Co-operation and Development (OECD), hardly a hotbed of labour militancy, argued that collective bargaining needed to be “mobilised”.
As a recent report for the Trades Union Congress revealed, the degree of job protection enjoyed by UK workers dropped from the OECD average following the advent of Thatcherism. It only partially recovered under New Labour and “the gap widened again after 2010 as other OECD countries modernised their labour laws … while the UK cut protections in key areas such as protection against dismissal”.
As workers’ rights were being whittled away, shareholders were increasingly benefiting from company profits. The Common Wealth thinktank pointed out that in the 1970s, when unions had more power, private non-financial corporations paid out 20p in dividend payments for every £1 of gross fixed capital formation. In the second half of the 2010s, this figure was 95p. Payouts to shareholders rose two-and-a-half times faster than total employee compensation between 1988 and 2019. This money could have been used to increase productivity, but UK business investment has been consistently lower than the average for leading industrial nations.
The new government’s employment rights bill, which will increase the ability of unions to operate in workplaces, is desperately needed. As union density increases, more workers will be paid more. A more hospitable legal framework for unions should also make it easier for them to achieve pay growth for their members. Sir Keir is taking a different approach to New Labour, which had no love for unions. Despite this, Labour’s historical union-party link survived Blairism.
Sir Keir distanced himself from grassroots campaigning, which had been a feature of Jeremy Corbyn’s leadership. Labour today sees itself as a self-sufficient political organisation, taking cues from a range of social actors, but not restricted by formal links with any one in particular. Yet the tension between Labour and the trade unions over their values and their financial relationship is real, and intensely felt.
Understanding this is at the heart of the enigma of the current Labour party. In his book Getting Over New Labour, Karl Pike – a political scientist at Queen Mary University of London – suggested that the party “does not offer merely the status quo, but nor does it have a clear sense of where the country should go and what the good society looks like”. It has been encouraging that Sir Keir’s early actions suggest his politics has been forced to take on a purpose. And it is a good one.
