Trade Unions

Debate between Lord Foulkes of Cumnock and Lord Clinton-Davis

Thursday 19th November 2015 Lords Chamber

[Lord Foulkes of Cumnock]

My noble friend Lord Grocott says that it has not changed completely. They were intent on increasing their wealth, and ordinary workers were excluded and exploited.

The Chartists, founded by the London Working Men’s Association, agitated for political rights for ordinary people and set in train the long series of events that, by 1928—only then—led Britain to become a full democracy. When we take time to look back at the achievements of the unions, we begin to appreciate how different life would be now for ordinary working people without them. I will give a few examples.

First, on workplace safety, workplaces with union safety representatives have half the serious injuries of non-unionised workplaces. In particular, the London Olympics of 2012 were the first Olympic Games ever in which nobody was killed while constructing the venues. It is not accidental that for the 2012 Games there was strong union representation on both the London Olympic committee and the Olympic Delivery Authority. In comparison, at last year’s Winter Olympics at Sochi in Russia, 60 people died.

Secondly, there is the minimum wage. Unions were among the early supporters of what was arguably—it is a view I hold—new Labour’s most successful achievement: lifting the purchasing power of low-wage workers, particularly women, without negatively impacting on unemployment and, incidentally, thereby helping economic growth.

Thirdly, on equal pay, as we all recall, the female trade unionists at Ford’s Dagenham and Halewood plants forced the introduction of the Equal Pay Act 1970, which was a key step in the battle for gender equality in the United Kingdom. However, we are not all the way there yet. Since last week until the end of the year, women will on average be working for nothing in comparison with men in equivalent jobs.

Tremendous advantages have been won by the trade union movement, including full statutory maternity leave since 1993, and there are all those achievements without even mentioning the insurance cover, the legal representation and the other services that we ordinary union members receive from our trade unions.

Our economy also benefits hugely from the presence of trade unions at both the micro and the macro levels. At the level of individual workers within the economy, unions have had a positive effect for every type of worker. In relation to salaries and holidays, unionised British workers earn 8% more than non-members on average, and they have 29 days’ annual leave as opposed to 23 for non-members. For young people, workers between the ages of 16 and 24 earn on average 39% more when they are union members. That is a huge and significant difference. Women in a union earn 30% more on average. The gender pay gap among unionised workers is 6% compared with 22% among non-unionised workers. Finally, workplaces with recognised unions are 24% more likely to offer training to their workers, and training in skills is vital to developing our economy if we are to make progress.

Unions also impact positively on the macroeconomy in three major ways. First, although some people claim that unions inhibit productivity growth, the opposite is true—our economy is more productive where there are trade unions. Productivity growth since the recession has been disappointing across the economy as a whole. However, a recent study by the National Institute of Economic and Social Research found that this productivity gap is connected to the decline of trade unions and that, in reality, high union density is associated with stronger productivity growth. The sectors of the British economy that are experiencing strong productivity growth, such as aerospace and engineering, tend to be those with stronger union representation, where employers actively encourage and engage with the trade unions in their workplace. Professor Kim Hoque of Warwick Business School has found that workplace productivity in the public sector is improved by union representation, and he has raised concerns about the effect on productivity of the Government’s impending Bill—an issue we need to return to when we debate that legislation.

Research by the New Economics Foundation found that high union membership boosts GDP by redirecting a larger share of capital to consumers or purchasers, thus expanding the domestic market for goods. Therefore, increasing the level of unionisation to that of the early 1980s, for example, could add nearly £23 billion to GDP. For every 1% reduction in the proportion of the workforce in unions, GDP is reduced by more than £2 billion.

[Lord Clinton-Davis (Lab)]

As an active trade unionist all my life, I agree with what my noble friend says, but some trade unions are not affiliated to the Labour Party and they do an enormously valuable job. My noble friend Lord Monks and I have been presidents of BALPA for a long time. Would my noble friend say something about trade unions such as the National Union of Teachers and my own union, BALPA?

[Lord Foulkes of Cumnock]

My noble friend has a very distinguished record as president of the British Airline Pilots Association. Naturally, I would like all trade unions to affiliate to the Labour Party—of course I would. But I recognise that that is not likely always to be the case, and there may be very good reasons why they feel unable to do so. Part of our democracy is that they should have the right to make that decision.

If I may, I will move on to the point I was going to make about income equality. In the United States, the United Kingdom and Canada union membership has been strongly linked to greater income equality. Research has found that the more rapid rate of de-unionisation in America, for example, accounts for two-thirds of the greater income inequality compared with the United Kingdom.

I turn now to the unions’ contribution to democracy. As we all know, in a democracy, it is not enough just to cast your vote every four—now every five—years; that is only part of our democratic system. Real democracy demands civic engagement from people through churches, as the Bishops will testify, charities—I am proud to be a trustee of Age Scotland and many noble Lords are involved in charities—political parties and other parts of civil society. But the trade union movement is perhaps the single strongest embodiment of such civic engagement, critical not just as a way for employees to engage with employers on equal terms but as bodies representing and lobbying for wider changes in society on behalf of ordinary working people. We have seen trade unions do that. They serve as a vital conduit for the interests of millions to be heard here at Westminster, at Holyrood, at the Welsh Assembly and at Stormont, and in local government. They keep actively promoting the interests of working people in these areas where decisions are made. They promote the interests of a huge number of people—over 6 million British citizens—and are therefore essential to our democracy.

Trade unions also promote political participation by the citizens. According to figures from the OECD and the Institute for Democracy and Electoral Assistance, the 10 most unionised countries have an average voter turnout of 78%, while the 10 least unionised have a turnout of 62%. That is a remarkable difference and there must be some correlation.

Trade unions do not just help democratic participation; they also campaign and impact on a wide range of social issues. They fight not only for their members in the narrow confines of the workplace but also for a better society for their members. For example, on child poverty and opportunity, greater trade union membership is associated with lower rates of child poverty and significantly better economic mobility. On equality, the Trade Union Share Owners, controlling £1 billion of shares, has openly used this financial clout to pressure for more women on FTSE 100 boards. Such power could be used even further and more effectively, and I would certainly encourage it so to do. On anti-slavery, trade unions in this country have lobbied DfID, the ILO and the Home Office to fund anti-slavery programs for the benefit of people working in slave conditions, both abroad and at home.

Trade unions are sometimes cast as an anachronism, and some people say that they are redundant. But in spite of the tremendous advancement of workers’ rights, the coming years point towards severe challenges that British workers will face. It is critical that we in Parliament work with employers and trade unions to mitigate and reverse some of these threats. The Trade Union Bill, which we will come to later, is one such threat.

The experience of the United States is a dire warning. Safety in the workplace is worse in the United Sates and wages are lower, particularly in states where there is anti-union legislation. If we compare those states with the others, we see a very significant difference.

In conclusion, the essence of a successful democracy is that the country works for the benefit of all the people. The Labour Party, which we recognise was born of the trade union movement, embodies that ideal. We are here to make the case for a more just and a more equitable society, to give voice to those who would otherwise be silent and to champion the continued journey of a nation towards our democratic ideal. Our trade unions should be a vital and valuable partner as we make this journey. I beg to move.