King’s Speech (4th Day)

Lord Hendy Excerpts

Monday 22nd July 2024 Lords Chamber

[Lord Hendy (Lab)]

My Lords, I too add my congratulations to my new noble friends on their appointments to the Front Bench, and the noble Lord, Lord Vallance, on his speech. I celebrate the new Government’s commitment to the new deal for working people. I declare my interests in the register and as legal adviser to the task force that drafted the new deal.

Without doubt, the proposals to enhance individual rights and make the repeals identified in the new deal are most welcome. A secure, well-paid workforce with decent rights is not just beneficial for workers. The recent Institute of Directors survey shows that the new deal proposals enjoy considerable support among employers, and the recent TUC survey shows how enthusiastic the public are.

Yet more is needed to address a fundamental problem: the overwhelming majority of our 31 million working people have no control over—indeed, no input into —the determination of the terms and conditions on which they work. We need changes to the law to allow workers to exercise collective leverage through their trade unions to balance the economic power of employers. Labour’s plan will certainly help in this respect, allowing unions to have reasonable access to workplaces and reforming the statutory recognition procedure.

But a key proposal of the new deal has lost some prominence. The new deal proposed collective bargaining machinery for each sector of the economy. Instead, Labour intends such bargaining for the social care sector and for school support staff, with a commitment subsequently to

“assess how and to what extent”

sectoral bargaining arrangements

“could benefit other sectors and tackle labour market challenges”.

Yet the case for extensive collective bargaining is firmly established internationally. The OECD and the ILO have been pressing its case for years, and even the IMF has pointed out its advantages. The EU introduced a directive last year requiring every state with less than 80% of its workforce covered by a collective agreement to produce an action plan to achieve it.

In the UK, compulsory sectoral bargaining was introduced in 1909 and voluntary sectoral bargaining promoted from 1917 onwards, encouraged in the 1930s, as my noble friend Lord Monks pointed out. By 1945, and through to 1980, collective bargaining coverage in the United Kingdom exceeded 80% of the workforce, but anti-union legislation and government policy have collapsed coverage to fewer than one in four of our workforce. The rest have their terms dictated by their employer unilaterally. The result has been catastrophic for workers. The Government acknowledge the growth of job insecurity. Median real wages have not risen in value since 2007. Half our workforce earns less than £550 per week, and 38% of those on universal credit—2.3 million people—are in work.

Research shows that sectoral agreements would increase wages, eliminate pay gaps, diminish inequality, regularise hours, enhance productivity and stop labour cost undercutting. Such agreements would improve the conditions of life for millions and increase demand for goods and services, which would be instrumental in growing the economy. They would slash the Government’s expenditure on benefits and increase their tax take. Above all, they would allow workers again to have a say in setting the terms and conditions of their working lives.

Sectoral collective bargaining therefore cannot stop at social care and school support staff. The need for sectoral bargaining across school teaching, food production and agriculture, warehousing, parcel and food delivery, hospitality, retail and many other sectors is as acute. I hope my noble friend the Minister will be able to assure the House that fair pay agreements will be rolled out across the economy.