Lord Balfe
To ask Her Majesty’s Government what is their assessment of the contribution of trade unions to the British economy.
Lord Balfe (Con)
My Lords, I am pleased to have secured this debate, which I hope will enable the positive contribution of trade unionists to the British economy and the British way of life to be further recognised. I declare an interest, as I have been a TUC-affiliated trade union member since I left school at the age of 16. I would probably not be here today were it not for the encouragement and help that I had as a young trade unionist in getting from secondary modern school through university and into a professional career. Long before I was in the Labour Party, I was an active trade unionist. One thing that I learnt in my branch, incidentally, was that the Conservative Party was not the enemy. There was only one enemy, and that was the Trots—sorry, the Trotskyites, I should say, for Members on this side who are not familiar with internecine politics on the left.
Many people are surprised, but the average trade unionist today is a woman around 45 years of age who is in white collar employment and has never been on strike in her life. Len McCluskey, the general secretary of Unite, recently said at a press lunch in the other place that fewer than half of his members voted Labour. Much evidence collected by the Conservative Central Office shows that over 30% of trade unionists vote Conservative. I recall that after the 1983 election the general secretary of my own union, AUEW-TASS, told me that a majority of our members had voted Conservative. If you take account of all those who, like almost one-third of UK citizens, do not vote at all in general elections, it is no longer possible to typecast trade unionists as being indelibly wedded to any one particular party.
The noble Lord, Lord Monks, referred last week in a debate to the constructive way in which unions faced up to difficult decisions during the recession in order to preserve jobs and capacity. Noble Lords will also probably have heard of the scheme known as Union Learn, started by the last Labour Government and continued by this Government. This partnership between employers and unions currently has 3,636 Union Learn representatives, all active trade unionists and trained through the TUC, who supported 219,091 learners in 2013-14. Of these, 14% were learners on English and maths—basic literacy—25% on ICT courses and 29% on further professional development. What they had in common was that these were all of benefit to the employee and the employer, and were almost all undertaken in premises provided by the employer. Employers benefit from a literate and trained workforce, but often it is only the trade union that is close enough to the worker to motivate them to take part and to study.
I was interested to see a recent scheme inaugurated by the Skills Minister, Matt Hancock, launched in his Newmarket constituency by the National Association of Stable Staff. This is the first in the racing industry, not one that you normally think of as being trade union organised.
Pensions is another area where unions have played a valuable role through the commission headed by the noble Baroness, Lady Drake, and in gaining acceptance for the new pension scheme being rolled out, which needs to be improved considerably. However, we are on the way.
Health and safety at work has been shown by a government study to be enhanced in unionised workplaces. A recent study identified a minimum saving of £181 million following a reduction in time lost due to occupational injuries and work-related illnesses. There is a long catalogue of good outcomes from union activity. I welcome the recent tentative moves by the TUC towards seeking places on company boards. We often rightly note the advantage that Germany has over us in manufacturing and industrial relations. Perhaps it is now time to look at the role of responsible trade unionism in Germany’s industrial and economic success and where it can be replicated here. I am particularly pleased that the TUC now seems to have changed its position on worker directors, or at least to be in the process of doing so.
We cannot have a debate without asking the Minister something or other. Therefore, will the Minister request his colleagues to stop the recent niggling attacks on minor but important areas of trade union rights, particularly in the Civil Service? I am sure many of us would agree that facility time should be clearly identified in departmental budgets, but I ask that recognition should also be given to the ways in which facility time frequently—indeed, generally—helps departments and public bodies to attain their wider objectives.
The deduction of union subscriptions is a long-standing concession, which incidentally was introduced when I was at work and was then opposed by the left on the ground that it would break the link between the subscriptions collector and the person on the floor. Of course, a huge amount of time was lost because we used to wander round during the afternoon and collect subs when we should have been working, so stopping subs collection at source will not necessarily save any time, although it might delight a few people who like going for a walk in the afternoon. This is now being withdrawn in some departments. Frankly, it would be far more sensible to assess what time is being lost. If the Government are really so hard up and wish to charge for collecting the money, I invite them to make out an economic case and sit down and discuss it with the unions and have a small deduction which, presumably, they would extend to things such as gym membership, the charge for which I understand is also collected. If this practice costs money, it should be addressed across the board and should not be a matter of prejudice in just one small area of life.
I firmly believe that we have to stop viewing unions as belonging to just one political family. They comprise bodies that do good for many people who are not in any political party at all. It was many years after I joined the union that I joined a political party. As I say, unions do a lot of good. There is clearly a need for responsibility in trade unionism and we can all point to the person who lets the side down, so to speak. However, we need to remember the huge number of people who keep Britain going and are legitimately members of trade unions—people such as pilots. Who thinks of airline pilots in this connection? However, BALPA is a very highly organised union. Who thinks of dieticians in hospitals in this connection? I recently hosted in this House a reception for the British Dietetic Association, which does an enormous amount of good work advising people in an important part of the health service. There are numerous other examples. Many unions feel that the Government could be slightly more helpful towards them. They appreciate the contact and the common bodies run by the different departments, but niggling issues such as that of facility time and stopping the deduction of subs do not make sense to us or to the unions concerned. They just add to the burden that has been put on them.
Finally, I would say to our Government that we have to get a level playing field on this. I always despair, frankly, when I hear people say, “Unions—Labour”. That is not the case; it is, “Unions—workers”. That is important. As Len McCluskey has demonstrated, trade union members, by joining, do not put themselves in a political box. That is probably not completely good news for the Opposition; but if they think about it, it should be good news because unions have a massive role to play in a successful Britain. They have a lot of useful and good things to say that people of all parties and none should be listening to. Certainly in government we should be listening to and regarding them as partners in the joint enterprise of making Britain economically strong and great. It is in that bipartisan sense that I move this Question for Short Debate.
Lord Monks (Lab)
My Lords, I must declare a current interest as president of the airline pilots’ union, to which the noble Lord, Lord Balfe, glowingly referred in his interesting remarks. It is nice to know that he retains his beliefs that encouraged me to vote for him on three separate occasions in his earlier political career. I wish him luck in his newish political party, in his evangelical campaign to persuade it that his views are desirable ones to follow. It will be an uphill task. I have just been speaking in proceedings on the Deregulation Bill and asking why unions are not included in a bit of deregulation. The noble Lord, Lord Cormack, will remember there was a debate about assurers, in addition to scrutineers and certification officers, and the red tape in which unions are being wrapped. In the news this morning, we heard that quite a bit more could apparently be on the way as a result of a strike later this week.
Trade unions grew out of injustice. In the face of rapid employment and industrial change, individual workers without unique skills—not the stars but the ordinary—found themselves vulnerable to decisions by employers and managers, and were in danger of being treated as commodities to be acquired and disposed of as judged necessary. So the instinct to form a union was powerful. They were founded in every industrialised democracy in the world. Those two words are important—“industrialised” and “democracy”. In that way, the employer was under pressure to listen to workers and meet their concerns. The growth of unions was a feature of societies like our own, and we in this country led the way. It was an area of British leadership across the world that is much recognised among trade unions in the rest of the world. Their growth was encouraged by alliances with socialists and, in some countries, political parties founded their own unions. Socialists, and in some countries Catholics, were, in the main, instrumental in forming unions.
Today, when societies are less industrial and their economies more service-based, this has led some to question whether unions are relevant or appropriate. In fact, in some US states in the middle and the south you could say that unions were almost an endangered species. Unions are relevant in Britain; they are relevant in 38% of the FTSE top 50 companies, which have collective bargaining with trade unions. In UK manufacturing, to which the noble Lord, Lord Balfe, referred, unions cushioned employers through the recession of 2008-09 by helping to preserve jobs, very often at the expense of a fall in living standards. The carnage of employment, however, was nothing like as bad as we expected it to be, given the depth of that recession. It was not as bad, for example, as the less severe recession we experienced in the early 1990s.
The two relevant unions are not in manufacturing, but in services. The biggest employer of unionised labour in the country is Tesco. To this day, the big supermarkets, security companies and banks are unionised. Of course, they are relevant in public services. I should mention the strikes that are due to take place later this week to remind the Government that change should be negotiated, not imposed. It is important for public sector staff morale that unions should be recognised properly and dealt with in a respectful manner, not in the rather careless, take-it-or-leave-it, way that is being displayed at the moment.
Unions are relevant to all those in insecure, low-paid occupations and to people who are subject to zero-hour contracts. There has been an increase in self-employment, with 40% of the new jobs that have been created since 2010 being on a self-employed basis. We know that not all of them are budding entrepreneurs. Many people are taking self-employment because it is the only thing they can get, with the employer stepping neatly away from PAYE tax, national insurance contributions, pensions, employment rights and so on. Workers today are still vulnerable, just as they were in the early industrialised societies. It seems to me that although the social protections of the welfare state are much better, the instinct for unionisation remains great. I think that it should be public policy to encourage the renaissance of trade unions. Collective bargaining should be seen as a way of checking the excesses of people at the top and boosting the position of people at the bottom. It can narrow the gap between the haves and the have-nots. The companies that are aware of their obligations to their workforces—unions tend to ensure that—are the ones which are more likely to do the right thing rather than the wrong thing. If we are going to tackle inequality in our society, which even the IMF has mentioned, stronger unions are a crucial part of that process.
Any new settlement must involve progressive and responsible trade unionism that is committed to high productivity, performance and long-termism. It must ensure that the benefits of growth are more fairly distributed than is the case at present. My watchwords are “co-operation”, “respect”, “professionalism” and treating people as you yourself would like to be treated. I look to the other side of the North Sea for exemplars, as did the noble Lord, Lord Balfe, in respect of worker directors in Germany. In terms of collective bargaining and the worker voice in how companies run themselves, as well as the approach to building skills over time and giving people ladders to climb, economies from Finland all the way round to Flanders seem to be able to achieve that. The crucial role played by trade unions in our society needs to be recognised properly, and I hope very much that this debate will be the start of something big. I hope that our evangelist on the other side of the Committee manages to take the hordes of the Conservative Party along the same path that he is treading.
Lord Morris of Handsworth (Lab)
My Lords, it is a great pleasure to follow my noble friend Lord Monks. Unlike him, I welcome the tone of the contribution of the noble Lord, Lord Balfe, to the debate. While I look forward to the Government’s response, it might help if I remind the Committee of one or two landmarks in the development of contemporary trade unionism.
I was proud to be a member of and then to lead a union whose general secretary in 1940 left his office in Transport House and walked into Downing Street to join the Churchill Government as the Minister of Labour. That general secretary was Ernest Bevin. So if we are talking about trade union contribution to the economy, we should pause here and pay tribute to the Bevin boys. I am pleased to say that it was a Labour Government under Prime Minister Brown that gave due recognition to the contribution that the Bevin boys made to the war effort. Ernest Bevin’s achievement on his return to Government in 1945 was a major contribution to the development of the United Nations as we know it today. But that was his political role. His industrial role as the then Foreign Secretary was to establish the International Labour Organization, based in Geneva. Lest we forget, as Foreign Secretary he was present when the State of Israel was born. As we speak, the Israeli trade union, Histadrut, remains a significant contributor to the development of that country.
It is to the trade unions’ contribution to our economy that the noble Lord’s question is directed. In my day, along with my noble friend Lord Monks and many others, we changed both the social and economic agenda of the workplace from politics to partnership. We developed an agenda for both social and economic change. We campaigned for partnership with employers and the wider community. We built an agenda for the workplace based on better health and safety, training and skills, investment in people, export and productivity. Together, we saw ourselves, certainly within the context of the TUC, as ambassadors for social change. Our agenda for social change was led by the pursuance of anti-discrimination laws, health and safety, employment protection, skills improvement and—above all—partnership at work.
The trade union agenda today is about investment. For example, I am proud of the contribution that workers make to the success of the Jaguar Land Rover partnership. I am proud of the contribution made by Bombardier, the train-building company in Derby—another great success. Frankly, anyone who asks the question about the trade union contribution really needs to look no further than at the partnerships that have developed. The days of industrial disputes are almost extinct within the context of day-to-day debate. Day in, day out, I know that management and unions sit down to discuss the issues and challenges of the day. These are productivity, training and skills, apprenticeships, investment and export opportunities. That is the modern, contemporary workplace agenda. What we need is support from government for that agenda. In today’s world, the company ambassadors include the trade unions. I spent more time in Japan seeking to persuade the Toyota motor company to come to Derby than any Cabinet Minister I know.
Yes, there are challenges ahead—zero-hour contracts, for example. I must ask the Government: what steps are being taken to give justice to the thousands of construction workers blacklisted by the Consulting Association? That is a must-have for social justice to be done. I feel a great sense of gratitude to have been supported by the trade union movement. Today, the trade union movement, with co-operation, is not the problem; it is very much part of the solution.
Lord Cormack (Con)
My Lords, it is a great pleasure to be able to follow two such distinguished trade unionists, both of whom epitomise what my noble friend Lord Balfe was talking about in his opening speech. They epitomise responsible trade unionism. I cannot claim, like my noble friend Lord Balfe, ever to have been a member of the Labour Party, but I have always had a great respect for the history of the Labour Party and, in particular, for those Christian socialists who, in a dignified and responsible manner in the nineteenth century, gave the working man—it was mostly the working man in those days—a voice. I honour that, and I believe that our country has received an enormous contribution from those who have served in the Labour Party and in the trade union movement, although I rejoice in the fact—enunciated and underlined by my noble friend Lord Balfe—that one does not now talk of a trade unionist automatically being a member of a particular political party.
The underlying theme of this debate is partnership. We cannot have true and lasting prosperity in our country without a real and continuing partnership “from two sides of industry”. I do not like that phrase, I would rather say “from all of those who are committed to the commercial and industrial development of our great country”. I have been involved, for the last 12 or 13 years, with an award for responsible capitalism. It came out of the magazine First. Way back in the late 1990s, I had a series of discussions with the chairman of that company, Mr Rupert Goodman, and Lord Dahrendorf. We decided that we wished to challenge the captains of industry to emulate the Robert Owens and the Cadburys of the past and practise true responsible capitalism. Responsible capitalism means not only a commitment to a profitable enterprise—it clearly means that—but recognition of the needs and aspirations of those who work, and of the environment in which they work.
Way back in 2000, we were able to persuade the then Chancellor of the Exchequer, Mr Gordon Brown, to present the first annual award for responsible capitalism. Year in and year out since then we have continued to do that. Sadly, since then, Lord Dahrendorf has died. He was one of the most truly remarkable men who have ever sat in your Lordships’ House. He was replaced as chairman of the panel of judges by the noble and learned Lord, Lord Woolf, the former Chief Justice, who had himself presented the awards in a previous year. I believe that it is incumbent on us all to do everything possible to encourage responsibility in all of those who work for the future of our great country. Whether they are those in positions of managerial authority, or those who are working with their hands as well as their heads, responsibility and partnership are surely the key words.
I have been fortunate enough in recent weeks to initiate two debates in your Lordships’ House. One was on the subject of craft apprenticeships, and the other was on citizenship. I want to see the day when every one of our young people leaving school goes through the sort of citizenship ceremony that those who are becoming British citizens and subjects go through as recognition of their responsibilities and their rights. I believe that the trade union movement can play a significant part in encouraging that sort of responsible citizenship because those responsibilities interact and work together.
I also believe that there is no group of organisations better able to promote true and proper craft apprenticeships than our trade unions. I see an expanding role for them in that context in the years ahead. I deplore the yah-boo politics that occasionally still disfigure the other place and paint people into different corners because if we do not work together in partnership in this country whatever our background, ethnicity or religious beliefs, we will not be able to prosper as we should and truly inherit the legacy of the past created by men and women who had responsibility and partnership as their watchwords.
One of the winners of the award for responsible capitalism was Sir Charlie Mayfield of the John Lewis Partnership. There is no better example of true responsibility and involving all those who have a role in the organisation concerned than the John Lewis Partnership. May that be a role model for us all in the years ahead. I have enormous confidence in the future of this country, but that confidence could so easily be undermined if we saw a resurgence of small-minded industrial cold war rhetoric which could do no one any good at all as we move through the 21st century.
I applaud my noble friend for introducing this subject. I apologise for my slightly random remarks. I do not write speeches, but I feel very passionate about this and I very much hope that those outside who read this debate will feel, as the noble Lord, Lord Monks, said, somewhat inspired by it.
Baroness Dean of Thornton-le-Fylde (Lab)
My Lords, I, too, thank the noble Lord, Lord Balfe, for introducing this debate and for the tone that he used. Like him, I joined a trade union before I joined the Labour Party. I am still a member of a trade union and always will be. I have been a member for more than 50 years. In fact, the union I was fortunate enough to join is more than 200 years old. Its originating members were deported to Australia for having the audacity to break the law to try to form a trade union. That is the DNA that ran through the union that I joined. The union has had a lot of changes.
I currently chair the employee share ownership scheme of NATS. It has been interesting to see how that has worked well within the company. At the time of the part-privatisation of the organisation in 2001, a shadow share price was established which I think was 20p. It was just before the bombing of the twin towers and the company was then trading almost illegally, with 126% gearing. Since then it has been interesting to see how we have substantially trade union-organised employees who are also shareholders in the company. It works well. The share price is now more than £4 a share; and those employees are benefiting from that. So, in the right structure and context, I support the employee share ownership schemes to which the noble Lord, Lord Balfe, referred. When we moved from free shares to part-free, part-buy shares, more than 80% of employees in the company bought shares. That is partnership working. The company has a policy of joint partnership working. That cannot be repeated enough because the company had its most successful financial year last year. Having been a totally nationalised company, it is now part government owned, part privately owned. It is held up worldwide as being an icon of professionalism and good quality. So the noble Lord, Lord Balfe, is absolutely right when he refers to the fact that trade unions are part of solving the economic issue, not part of the problem.
Every organisation and structure, I would dare say even the Conservative Party or any political party, has its own issues of one kind or another. I shall come back to those shortly. I referred to my original trade union links with the union of which I am still very proud to be a member, although it has been amalgamated almost out of existence: I am now a member of the same trade union as a number of noble Lords in this Room. When you look back at history—and the noble Lord, Lord Monks, rightly referred to the economic and social implications—you can see that trade unions are not just part of the economy but part of the overall quality of democracy within a nation. The noble Lord, Lord Balfe, referred to Germany, in which trade union structures were set up by the TUC after the Second World War. It is very much part of that engine of success, on the boards of companies and elsewhere, so it is not even an issue.
The issue over trade unionism in Britain is like the issue of class and the great divide that we have—there is no need for it, and has not been a need for it. What we need in the country is the partnership work—and if there is one word on which we are all united in this debate, it is “partnership”. Look at Tata and the success that it has made—it is trade union organised. Look at BAE Systems, which is fully trade unionised. Some months ago, I attended a meeting in the House of Commons where the company and trade unions were alongside each other, talking about how important was the success of that company, the investment that had taken place and the skills. There is a very highly skilled requirement in the company, as there is in Tata and a number of other companies, Bombardier included, to which my noble friend referred. People were then arguing for the well-being of the company. Why? When I was a trade union official, I never took any satisfaction out of dealing with a company that was not making a profit. Profit is a good word; it is how it is used that matters, and how we concentrate what we are doing in the UK to build on our economic recovery.
The question that I pose in this private debate about how we work together in Britain—because it will not receive publicity—is how trade unions, companies and government can make sure that we have economic success, taking the leaf out of great competitors, Germany, and the Scandinavian countries. I see that even in America, which is not known for its pro-trade union line, trade unions are growing in strength. In Britain, too, a number of trade unions are growing in numbers. It is still an anachronism for an individual employee to be faced with a professional employer and to have to deal with that employer on their own behalf. Collectivism is important, whether it is a small company or a large one. It would be much more profitable for the nation—I do not mean just in money terms but in our economy and social well-being—if we concentrated on that. It is therefore with some deep concern, which I am sure is shared by the noble Lord, Lord Balfe, that I saw the clear briefing this weekend, and the reporting in the press today, in the FT and the other newspapers, that the Conservative Party intends to have in its manifesto certain requirements on trade unions with regard to strikes and pre-strike ballots. I would welcome the Minister’s comments on that in his reply. The union that I came from never had a dispute without having a ballot—and that has to be the case. It is something that I have always agreed with; it was something which I was brought up with in my union.
It is reported that there will be a requirement for 50% of the employees covered to have voted. Just imagine how requiring that kind of level for elections would transpose itself to our democracy. That would be just unacceptable. It will be an adversarial debate. It has to be. Rather than the idea of almost going on to the front foot of aggression with the Government not wishing to negotiate and consult, partnership would serve our country better than having these kinds of briefings and leaks. This would be legislating for the small areas of industrial relations problems that still exist. I do not deny there are some. They might even be tiny and geographically placed for a number of reasons. Instead, concentrate on the nation as a whole. The nation as a whole has a darn good record in both this economic recovery, which my noble friend Lord Monks referred to, and the strike record. I thank the noble Lord, Lord Balfe, for this debate. It might give one or two of us the courage to come back to this issue in the months ahead because it is a debate which needs to be aired. We are indebted to the noble Lord. I ask the Minister, who I know is a coalition Minister, to address those questions and put on record where the Conservative Party stands.
Lord Kennedy of Southwark (Lab)
My Lords, like other noble Lords who have spoken, I thank the noble Lord, Lord Balfe, for putting this Question down for debate today. Like my noble friend Lord Monks, I voted for the noble Lord on many occasions when he was a Labour Member of the European Parliament, and I wish him well in his new endeavours in his new party.
I declare an interest as a member of the GMB and would remind the Committee that I have been a trade union member since I left school. I joined USDAW and the Co-op at around the same time—I do not know which one was first—when I started work in the retail sector. I am now the president of the Society of Chiropodists and Podiatrists, which is a very small specialist trade union working in the NHS.
I join my noble friend Lord Morris of Handsworth in his remarks about Ernest Bevin. I pay tribute to the Bevin boys and the role they played in the war effort.
This has been an interesting debate with a very experienced range of speakers. I was particularly pleased that the noble Lord, Lord Cormack, spoke because it is important that Members from the Government Benches should speak in these debates. He was right in his comments about partnership, and we all want to see that.
I think it is fair to say that the relationship between the Conservative Party and the trade unions has often been fraught. We can go back and look at the Governments led by William Pitt the Younger and the introduction of the Combination Acts in 1799 and 1800 and see that it is nothing new. The biggest recent change with respect to the relationship between the unions and the Government came in the 1980s and 1990s in the Governments of Margaret Thatcher and John Major. Trade unions were not viewed as allies or as organisations the Government could work with or wanted to work with. That is a matter of regret as unions have an important role to play in representing their members. They seek to improve terms and conditions through bargaining with employers, but they are also the biggest voluntary sector organisation in the country. They have 6.2 million members from all walks of life. They have an important role to play in civil society. They campaign for social justice at home and abroad. They have joined forces with a wide variety of organisations and have a proud record of achievements that have made our country a better place in which to live.
The noble Lord, Lord Balfe, made some points regarding which political parties trade union members support. Like any other group of people, support for particular political parties among trade union members will ebb and flow due to a range of circumstances, and trade union members will vote for all sorts of parties. Most trade unions are not affiliated to the Labour Party and never have been. Major changes to the relationship between affiliated unions and the party were agreed earlier this year. When the Minister replies, perhaps he will tell the Committee why the Government do not always see trade unions as organisations with which they can discuss things and work more closely. If it is because they see them as the arm of a political opponent, that is a most regrettable place to be and is incorrect, but it may explain some of the actions they have taken.
This Government, although it is a coalition, is a Conservative-led coalition. During the passage of the lobbying Bill in the previous Session, proposals were brought in which affected trade unions, as my noble friend Lord Monks said. They were supported by both coalition parties. Like my noble friends, I still struggle to see any difference they have made or any help they have given anybody. I am sorry to hear reports of further legislation in the pipeline, and I am sure the Minister will deal with that in his response.
As I have said, trade unions have a proud record of campaigning on a wide variety of issues. Let us take the area of health and safety. Where we have a unionised workforce the rate of injuries is much lower. That can be attributed to the management and safety reps sitting down together to deal with issues and find solutions. I recall going on a parliamentary visit to the Olympic Park just before the Games started. Sir John Armitt, who was then the chair of the Olympic Delivery Authority, proudly told us that health and safety was important to the authority, the companies and the unions involved, and indeed to the workforce. The worst accident on the entire site over the duration of the whole project had been one broken leg. Contrast that with the agriculture industry, which is not heavily unionised. People work in small groups on small farms. On average over the past 10 years, one person has been killed every single week as a direct result of their work. It is by far the most dangerous industry in the UK. Perhaps the noble Lord, Lord Popat, can tell the Committee what the Government intend to do to deal with health and safety in the agricultural sector.
My noble friend Lord Morris said that there are numerous examples of unions working together with employers to achieve the best for the business. I recall speaking last year to a senior manager in British Gas who told me that the company would not be as productive as it is without the support and help of GMB. The union is an integral part of the business. It has a direct interest in ensuring that the business succeeds because its members’ livelihoods depend on it. My noble friend Lady Dean made similar remarks, which I fully support. Let us look at the car manufacturing industry in the UK. It has been transformed, with thousands of jobs across many companies employing people who are building quality products. Many years ago I had the privilege of going to the Toyota plant in Burnaston with my noble friend Lord Prescott. It is an excellent example of unions and employers working together, and I pay tribute to my noble friend Lord Morris for securing that inward investment into the UK.
The noble Lord, Lord Balfe, and other noble Lords mentioned the benefits of union learning and other training schemes. The trade unions have a proud record of supporting and assisting members by providing education for them. Trade unions have also been campaigning for better deals for part-time workers and were instrumental in setting up the Pension Protection Fund. The noble Lord, Lord Balfe, referred to the positive contribution trade unions have made to the provision of pensions for UK workers, and I strongly agree with that. I also agree with the comments of the noble Lord, Lord Balfe, about facility time and the attacks on check-off. They are very silly and will benefit no one. I hope that the noble Lord, Lord Popat, can respond to that, hopefully in a positive way. My noble friend Lord Monks talked about respect and treating other people as you would want to be treated yourself. It is really important that negotiations and discussions are always held in that way.
In conclusion, I thank the noble Lord, Lord Balfe, for initiating this debate. I wish him well in his endeavours. Like my noble friend Lady Dean, I hope that this is the first of many debates on these issues. I think also that we would all agree that in the noble Lord, Lord Cormack, the noble Lord has a very welcome ally in the Conservative Party.
Lord Popat (Con)
My Lords, I am grateful to my noble friend Lord Balfe for initiating this important debate. On listening to him, it is clear that he has a detailed knowledge of the operation and activities of trade unions, and of the impact they have on our economy. This is an interesting debate for me to respond to because we have reached a cross-party agreement in the Committee today on the important role played by the trade unions in terms of both the country and the economy. However, it is worth reminding ourselves that in 2013 the UK experienced its fastest growth since 2007 and it is currently the fastest growing major developed economy. While I am not implying that this can be attributed to trade unions, it is relevant to note that the union movement engaged positively during the recent economic downturn while also maintaining its traditions of fairness and equality.
My noble friend Lord Balfe opened the debate by talking about the positive contribution made by trade unions. A recent ONS business survey tells us that trade unions contributed £443 million in gross value added to the UK economy in 2012. I do not know about their working patterns or which parties members vote for, and I do not think that my office would have that information either. However, I will present some facts about trade unions that were prepared by the Department of Trade and Industry in 2007. Representation in the workplace reduces the dismissal rate by 5% to 10%, thus reducing annual redundancy costs by £107 million to £213 million. Representation reduces the voluntary exit rate in a workplace by 5% to 10%, saving employers between £72 million and £143 million a year.
The impact of workplace representatives in reducing dismissal rates also reduces the number of employment tribunal claims against workplaces, thereby providing annual savings to business and the Exchequer of between £22 million and £43 million. Health and safety representatives in the workplace reduce injury rates for employees by between 10% and 15%, providing overall annual economic benefits of between £136 million and £371 million, and reduce incidence of work-related illness by between 1% and 3%, providing an overall annual economic benefit of between £45 million and £207 million. The annual economic benefit of training and learning generated through trade union learning representatives was estimated at between £94 million and £156 million, due to increased productivity.
We can see from those figures the huge benefits that employers receive by having their members represented by trade unions. While it is unfortunate that no current data are available, and these data are now seven years old, they show the scale of the positive effect that trade unions have on our economy and how this debate is an excellent chance to remind us all of those facts. I am afraid that we do not have recent data on the impacts that I have mentioned. The industrial relations climate in the UK is generally positive; industrial action is at an historic low and has been relatively stable for more than 20 years.
I will now talk about the wider benefits of trade unions, which a number of noble Lords mentioned, in particular the noble Lord, Lord Morris. Noble Lords quite rightly said that the trade union movement is very relevant today. Trade unions play a role that is increasingly important to the public and to those young people who will form our future workforce. It is about making sure that business is a benefit to society and reflects the society we live in. My noble friend Lord Cormack mentioned responsibility and partnership. Unions help to maintain the debate about diversity in the workplace, about how disability should not be shunned and about how improving skills can make a real difference to the poor and vulnerable. All this makes our economy perform better for all our citizens. Quite rightly, the noble Lord, Lord Monks, mentioned the benefits of economic growth, which must be distributed while we are doing well in this country. Hence, we are looking at the minimum wage and have increased the rate above inflation in the past few years.
Trade union members also participate in the many voluntary roles that help create cohesive communities. Unions are also at the forefront of developing greener workplaces by working in co-operation with employers who want to make their enterprise environmentally and energy effective.
The Union Learning Fund, which is administered by Union Learn, the learning and skills organisation of the TUC, is an excellent example of how unions help their members and their employers. Union Learning Fund projects are primarily targeted at workers, many of whom have low skills, including literacy and numeracy needs—the very people who may be reluctant, or may not know how, to take advantage of the various development opportunities available to them. The history of unions providing learning for their members is a long one. Some colleges were established for the education of working people in the late 19th century, closely followed by the founding of the Workers’ Educational Association. The opening of the TUC training college after the Second World War gave a big boost to the training of trade union representatives.
I will now talk about trade union membership. It is interesting to note that permanent employees are more likely than those in temporary jobs to be union members in all categories of employment. Full-time employees are also more likely than those in part-time work to be union members, the only exceptions for full-time employees are among professional occupations and those employed in the wholesale and retail trades. It may also surprise noble Lords to hear that middle-income earners are more likely to be trade union members than either high or low-paid employees. About 39% of employees who earn between £500 and £999 per week are members of a trade union compared with 21% of employees earning £1,000 or more. The proportion of employees earning less than £250 who are trade union members is only about 14%. Employees in professional occupations are also more likely to be trade union members, and we know that the wage premium is higher for females who are trade union members at about 30%, compared with 7% for males.
I now move on to some of the tangible benefits that unions bring to the workplaces in our economy. This was again mentioned by my noble friend Lord Balfe. These benefits fall in three main areas: helping people participate in the labour market by ensuring fair standards of employment; resolution of workplace disputes, and helping deliver necessary changes in the workplace to enhance business performance. The noble Lords, Lord Morris and Lord Kennedy, and my noble friend Lord Balfe mentioned the important area of the health and safety environment. Unions health and safety representatives help reduce the number of accidents in the workplace, hence reducing the number of hours lost to accidents, and improve the working environment so that employees feel safer and happier, which in turn reduces the number of staff absences due to illness.
Unions also play a major role in establishing the business environment in the UK, especially when it comes to negotiations on EU legislation. An example of this is the TUC pursuit of the interests of UK working people through the European Trade Union Confederation, the social dialogue with European employers and the Economic and Social Committee, and through representations to the institutions of the EU—the European Parliament, the European Commission, the Council of Ministers and the British Government. Such actions give more confidence to people, especially if they are low skilled, to participate in the labour market. This is turn provides a greater pool of talent for business to choose from.
Equally, the role that unions play in resolving workplace disputes, be that at an individual or group level, is not to be underestimated. This is more than a reduction in industrial action that we have seen over the years; it is about being proactive and working in partnerships with employers to make sure that a business can change and adapt to customer needs, or respond to competition in the market in the most effective way. Recent figures show that 76% of union members resolve their issues before taking formal action via a tribunal, whereas this figure is 69% for non-union members. Trade union members’ claims are less likely to go through to tribunal than those of non-members, with 13% of members’ claims ending in a tribunal compared with 21% for non-members. The tribunal figures also show that only 28% of claims are from trade union members.
A number of issues have been raised which I shall deal with very briefly due to time constraints. My noble friend Lord Balfe referred to the deduction of union subscriptions from employees’ salaries. This is for employers and unions to agree. Some unions feel that direct debit is more favourable. The Government support unions’ right to collect the subscriptions as they see fit.
Lord Kennedy of Southwark
I am sorry to interrupt but the Minister is not going to be able to respond to all the questions that I asked in the next couple of minutes. Therefore, will he respond to those he can and give a commitment to write to noble Lords on the points he will not be able to cover and place a copy of the letter in the Library of the House?
Lord Popat
I will certainly do that and place a copy in the Library. The noble Lord, Lord Morris, raised the very important issue of blacklisting trade unionists. The Government are clear that blacklisting is an unacceptable and illegal practice. We take any allegation of this practice very seriously. Indeed, the Secretary of State has asked anyone who has information about this practice still going on to get in touch with the relevant authorities. The Employment Relations Act 1999 (Blacklists) Regulations 2010 make it unlawful.
The noble Lord, Lord Kennedy, asked whether the Government can work with the trade unions. Of course, we can work with the trade unions. The Government believe that trade unions have a key role to play in resolving workplace disputes. Representation in the workplace reduces voluntary exit by employees by about 5% to 10%, which helps business retain key skills. The noble Lord, Lord Kennedy, also asked about the health and safety performance of the agricultural sector. I have covered health and safety, but I do not have agriculture on my brief and I will have to write to the noble Lord.
The noble Baroness, Lady Dean, mentioned workers’ participation, and having share ownership schemes. I believe there are many companies that have share ownership schemes. This is up to individual companies and employees to agree upon. My brief does not say what government policy is on this, but I would be happy to write to the noble Baroness.
Baroness Dean of Thornton-le-Fylde
Will the Minister also kindly undertake to respond to my question about the plans which have been reported in the press on further trade union legislation? Would he kindly reply to me in writing if he does not have this information today?
Lord Popat
Certainly the noble Baroness is right. I read in the Times this morning about possible legislation. This is not the policy of the Government. It may the Conservative Party policy, but I do not know what its manifesto will be in 2015. I will certainly be writing to the noble Baroness.
Lord Balfe
Will the letter be sent to all of the Members who have participated in the debate, please?
Lord Popat
I will certainly do that and I will put a copy in the Library for other Peers to look at.