Workers (Economic Affairs Committee Report)

Lord Hendy Excerpts

Thursday 8th February 2024 Lords Chamber

[Lord Hendy (Lab)]

My Lords, I too congratulate the noble Lord, Lord Bridges, on securing this debate and on his speech, and the Economic Affairs Committee on its report. A number of factors were identified for the remarkable and increasing exodus from work. One was long-term sickness. Among other things, the report cited an ONS survey that found that 10% of those who were economically inactive gave as a reason mental ill-health and stress, about which my noble friend Lord Layard has spoken. A trade union general secretary pointed to the “intensification of work demands”. The report cites a survey that found that only 58% of UK workers aged 50 to 64 liked their job, compared with 74% in the USA and 73% in Germany.

I suggest that one critical factor in the “Great British mystery” cited by the noble Lord, Lord Skidelsky, and amplified in his question, “Where have all the good jobs gone?”, is that pay, terms and conditions in the United Kingdom have become so bad that those who can are opting out or being invalided out. Taking pay alone, according to the ONS, median pay in November 2023 was £2,299 per calendar month, or £27,588 per annum. By definition, half the UK’s workforce earns even less. True, half the workforce earns more—the pay of FTSE 100 CEOs is about 116 times that of the median worker, up from 11 times in 1980—but the well paid are few in number. The fact is that only 25% of our wage earners earn more than £42,300 a year, and one-quarter of the workforce earns less than £16,068 per annum. The real value of average weekly earnings, including bonus, was the same in November last year as it was in March 2007.

Consider, as an example, the food sector. The workers who grew or caught our food, processed it, sold it in shops and supermarkets, and transported and delivered it were hailed as heroes during the pandemic, but that praise did not enhance their living standards. The Bakers, Food and Allied Workers Union recently published a report, Foodworkers on the Breadline, which showed that over 60% of its members did not have wages high enough to cover their basic needs, 88% had reduced their heating, and 60% had reduced their food consumption to cope. The other side of that equation is captured by the UN Trade and Development Report at the end of last year, which stated:

“The last few years of commodity price volatility have coincided with a period of record profit growth by global energy and food traders. In the area of food trading, the four companies that conservatively account for about 70 per cent of the global food market share registered a dramatic rise in profits during 2021-2022”.


Nearly half the population of the United Kingdom are workers: 32 million out of 67 million. In its report UK Poverty 2024 from a couple of weeks ago, the Joseph Rowntree Foundation tells us that 14.4 million people were living in poverty in 2021-22, and that nearly 3.8 million people experienced destitution—a 148% increase in just over five years. That included 1 million children—nearly three times as many as in 2017. Low pay is a principal contributor. Two-thirds of working-age adults in poverty lived in a household where someone was in work. More people in work are reliant on benefits than those who are not in work.

The consequences of inequality are well documented, in terms of misery, hopelessness, mental and physical ill-health, homelessness, diminished life expectancy, increased perinatal mortality, damage to children’s education, increase in crime, and anti-social behaviour—see the brilliant work of Professor Sir Michael Marmot and that of Professors Wilkinson and Pickett.

I suggest that the major factor behind this state of affairs is the collapse of collective bargaining in the United Kingdom. From the Second World War until the 1980s, the terms and conditions of around 85% of British workers were negotiated between unions and employers. Since then, collective bargaining coverage has been driven down to less than 25% today, so three-quarters of our workers—some 24 million of them—have no collective say over their terms and conditions, and next to none are in a position to negotiate individually. This lack of voice leads to both low pay and alienation.

International law, including the International Labour Organization, mandates the promotion of collective bargaining. The OECD annually recommends it in its employment outlook. Even the EU has now finally recognised the importance of collective bargaining. Its directive on national adequate wages requires member states to have an action plan to ensure that at least 80% of workers are covered by a collective agreement. I commend the course adopted by Sir Winston Churchill, who, as President of the Board of Trade in 1909, introduced a legislative scheme of compulsory sectoral collective bargaining to combat low pay, which became wages councils. The Labour Party is committed to a similar model in the form of fair pay agreements. Will the Minister say whether the present Government will fulfil their duty to promote collective bargaining and low pay?