Trades Union Congress 150th Anniversary

Lord Fox Excerpts

Thursday 14th June 2018 Lords Chamber

[Lord Fox (LD)]

My Lords, I too congratulate the noble Baroness, Lady Prosser, on securing this debate and I also congratulate the TUC on reaching 150 years. By the time the noble Lord, Lord Monks, sits down, we will have had the benefit of at least 150 cumulative years of trade union representation.

For my part, I can contribute only five to that sum. My period as a trade unionist coincided with another period of new technology. We have heard a number of Peers mention the implementation of new technology, but as father of the chapel, my job was to negotiate the implementation of single entry key journalism. So far, so good, but when I tell noble Lords that the person I was negotiating against was Lord Howie of Troon, they will understand that it was a challenging job. Will sadly passed from this House last week, but the fact that we managed to reach agreement and remained friends is perhaps also credit to the fact that trade unions have to be about relationships. A good trade union is about having a relationship between workers and management.

I will not be telling the noble Lord, Lord Sawyer, that trade unions are no longer needed. One of the saddest things about this debate has been the number of times people who so strongly support trade unions have had to qualify that by saying, “We still need them”. Actually, it should be taken as read that we need trade unions to represent people. The Liberal Democrats are absolutely committed to sustaining, improving and supporting the work of trade unions. We defend free speech and the right of association, and the rights and interests of employees, who should be properly represented. Obviously, the unions are a very important part of that. That said, a number of speakers, including the noble Baroness, Lady Prosser, have talked about the weakness of the unions. We need to think about how public life can embrace unions to take them forward into the next phase. As a number of your Lordships have said, capitalism has changed. Clearly, unions are changing and must continue to change to represent that.

The noble Lords, Lord Hunt and Lord Brooke, highlighted the internationalism and Europeanism of the trade unions. Your Lordships would expect a Liberal Democrat to say that we appreciate the way in which trade unions have consistently made the case within the Labour Party for closer co-operation with the European Union, going right back to the 1980s. This really did help usher in the Social Charter and policies such as the working time directive, which have made significant improvements to the lot of many workers in this country. It is a shame that the Labour leadership continues to ignore the trade unions’ urge to remain part of the single market and the customs union, but no doubt we can discuss that in another debate.

Trade unions have been under fire. We can talk about a lot of legislation. I will mention only the Trade Union Act 2016, which was a partisan measure designed to weaken the influence of trade unions. It created unusual and unique barriers to the ability of unions to make decisions. The Liberal Democrats blocked many of those provisions in coalition, which the then general secretary of the TUC acknowledged. But I ask the Minister: what has this Act achieved, other than creating even more of a “them and us” attitude? The Conservative Party is wrong to think that business does not want unions and that good business excludes unions. We know that some of the country’s best businesses are the ones that have good, functioning, strong unions. It is very sad that that attitude still seems to prevail.

Looking forward, there is a lot of work to do. We have talked of some things today. As Liberal Democrats, we are happy to work with the unions to try to bring about some of the changes we think will embrace the new future that a number of your Lordships have mentioned. Worker representation and corporate governance are absolutely central. We read and talk about a crisis of confidence in big business in this country. One way of addressing that is to modify the way in which business is run, boards are constituted and the wider stakeholder group, beyond shareholders, is represented in that. Of course, employees are a major stakeholder in any business. Unions are not there to wreck the business. Trade unions have as much interest in the success of a business as the owners. I would like to think of trade unions representing the owners in the case of more employee share ownership.

Trade unions can work, and in my experience have worked, to eliminate unproductive working practices but of course the benefits of that process have to be shared equitably across the concern. A well-functioning economy is one where the stakeholders of a business are much better represented within the management of that business. Liberal Democrats support bringing management and employee interests together; for example, by promoting different models of enterprise such as mutuals or co-operatives. As we move forward into the new world, we should look at how those new models can be encouraged. Perhaps the Minister can say what the Government’s position is on those kinds of business models.

At the same time, as a number of speakers have said, we have to develop new categories of workers. The Supreme Court judgment yesterday is one element of that. Again, I think there was a union involved in bringing that case. But there needs to be a categorisation of employees that recognises the nature of the gig economy. Unions, political parties and perhaps the legal system have to fight to make that real. When there is a downturn, workplaces are happier, more productive and more resilient if employees are treated as partners in those enterprises. Unions, working properly, can of course help to create that.

Strengthening worker participation is important. We strongly support staff representation on remuneration committees. We believe that has to be part of narrowing the gap mentioned just now by the noble Baroness, Lady Prosser. All UK-listed and private companies with more than 200 employees should have at least one employee representative on the board.

The noble Lord, Lord Hunt of Chesterton, pointed to the German and Dutch models of supervisory boards. I have had quite a lot of experience working in businesses that had those kinds of models, which deliver a much more considered type of management. It sometimes takes longer to make decisions, but the need for management to bring consensus into decision-making is really important. The trade unions within the supervisory boards have that important role. Perhaps the Minister can tell us what has happened to some of the proposals that the Prime Minister brought with her when she entered 10 Downing Street. She talked a good story about changing corporate governance and about worker representation. So far, we have seen none of that.

My final point is about ownership. We on these Benches are committed to giving staff in listed companies more rights to request share schemes. Worker share ownership is a liberal, pro-business response, which certainly helps address low productivity and inequality. I conclude, for the first time in my career as a Peer, by quoting John Stuart Mill, who was a passionate advocate of workers owning their own companies. In his words—not mine, please—he said that,

“the relation of masters and workpeople will be superseded by partnership”,

and,

“association of the labourers with the capitalist”.

There is a strong liberal tradition that runs through trade unions. We continue to support the need for trade unions and congratulate the TUC on its first 150 years.