Trade Unions

Lord Grocott Excerpts

Thursday 19th November 2015 Lords Chamber

[Lord Grocott (Lab)]

Nothing changes.

[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.