Lord Popat
Main Page: Lord Popat (Conservative - Life peer)Trade Unions
Lord Popat Excerpts
Lord Popat (Con)
My Lords, I am grateful to my noble friend Lord Balfe for initiating this important debate. On listening to him, it is clear that he has a detailed knowledge of the operation and activities of trade unions, and of the impact they have on our economy. This is an interesting debate for me to respond to because we have reached a cross-party agreement in the Committee today on the important role played by the trade unions in terms of both the country and the economy. However, it is worth reminding ourselves that in 2013 the UK experienced its fastest growth since 2007 and it is currently the fastest growing major developed economy. While I am not implying that this can be attributed to trade unions, it is relevant to note that the union movement engaged positively during the recent economic downturn while also maintaining its traditions of fairness and equality.
My noble friend Lord Balfe opened the debate by talking about the positive contribution made by trade unions. A recent ONS business survey tells us that trade unions contributed £443 million in gross value added to the UK economy in 2012. I do not know about their working patterns or which parties members vote for, and I do not think that my office would have that information either. However, I will present some facts about trade unions that were prepared by the Department of Trade and Industry in 2007. Representation in the workplace reduces the dismissal rate by 5% to 10%, thus reducing annual redundancy costs by £107 million to £213 million. Representation reduces the voluntary exit rate in a workplace by 5% to 10%, saving employers between £72 million and £143 million a year.
The impact of workplace representatives in reducing dismissal rates also reduces the number of employment tribunal claims against workplaces, thereby providing annual savings to business and the Exchequer of between £22 million and £43 million. Health and safety representatives in the workplace reduce injury rates for employees by between 10% and 15%, providing overall annual economic benefits of between £136 million and £371 million, and reduce incidence of work-related illness by between 1% and 3%, providing an overall annual economic benefit of between £45 million and £207 million. The annual economic benefit of training and learning generated through trade union learning representatives was estimated at between £94 million and £156 million, due to increased productivity.
We can see from those figures the huge benefits that employers receive by having their members represented by trade unions. While it is unfortunate that no current data are available, and these data are now seven years old, they show the scale of the positive effect that trade unions have on our economy and how this debate is an excellent chance to remind us all of those facts. I am afraid that we do not have recent data on the impacts that I have mentioned. The industrial relations climate in the UK is generally positive; industrial action is at an historic low and has been relatively stable for more than 20 years.
I will now talk about the wider benefits of trade unions, which a number of noble Lords mentioned, in particular the noble Lord, Lord Morris. Noble Lords quite rightly said that the trade union movement is very relevant today. Trade unions play a role that is increasingly important to the public and to those young people who will form our future workforce. It is about making sure that business is a benefit to society and reflects the society we live in. My noble friend Lord Cormack mentioned responsibility and partnership. Unions help to maintain the debate about diversity in the workplace, about how disability should not be shunned and about how improving skills can make a real difference to the poor and vulnerable. All this makes our economy perform better for all our citizens. Quite rightly, the noble Lord, Lord Monks, mentioned the benefits of economic growth, which must be distributed while we are doing well in this country. Hence, we are looking at the minimum wage and have increased the rate above inflation in the past few years.
Trade union members also participate in the many voluntary roles that help create cohesive communities. Unions are also at the forefront of developing greener workplaces by working in co-operation with employers who want to make their enterprise environmentally and energy effective.
The Union Learning Fund, which is administered by Union Learn, the learning and skills organisation of the TUC, is an excellent example of how unions help their members and their employers. Union Learning Fund projects are primarily targeted at workers, many of whom have low skills, including literacy and numeracy needs—the very people who may be reluctant, or may not know how, to take advantage of the various development opportunities available to them. The history of unions providing learning for their members is a long one. Some colleges were established for the education of working people in the late 19th century, closely followed by the founding of the Workers’ Educational Association. The opening of the TUC training college after the Second World War gave a big boost to the training of trade union representatives.
I will now talk about trade union membership. It is interesting to note that permanent employees are more likely than those in temporary jobs to be union members in all categories of employment. Full-time employees are also more likely than those in part-time work to be union members, the only exceptions for full-time employees are among professional occupations and those employed in the wholesale and retail trades. It may also surprise noble Lords to hear that middle-income earners are more likely to be trade union members than either high or low-paid employees. About 39% of employees who earn between £500 and £999 per week are members of a trade union compared with 21% of employees earning £1,000 or more. The proportion of employees earning less than £250 who are trade union members is only about 14%. Employees in professional occupations are also more likely to be trade union members, and we know that the wage premium is higher for females who are trade union members at about 30%, compared with 7% for males.
I now move on to some of the tangible benefits that unions bring to the workplaces in our economy. This was again mentioned by my noble friend Lord Balfe. These benefits fall in three main areas: helping people participate in the labour market by ensuring fair standards of employment; resolution of workplace disputes, and helping deliver necessary changes in the workplace to enhance business performance. The noble Lords, Lord Morris and Lord Kennedy, and my noble friend Lord Balfe mentioned the important area of the health and safety environment. Unions health and safety representatives help reduce the number of accidents in the workplace, hence reducing the number of hours lost to accidents, and improve the working environment so that employees feel safer and happier, which in turn reduces the number of staff absences due to illness.
Unions also play a major role in establishing the business environment in the UK, especially when it comes to negotiations on EU legislation. An example of this is the TUC pursuit of the interests of UK working people through the European Trade Union Confederation, the social dialogue with European employers and the Economic and Social Committee, and through representations to the institutions of the EU—the European Parliament, the European Commission, the Council of Ministers and the British Government. Such actions give more confidence to people, especially if they are low skilled, to participate in the labour market. This is turn provides a greater pool of talent for business to choose from.
Equally, the role that unions play in resolving workplace disputes, be that at an individual or group level, is not to be underestimated. This is more than a reduction in industrial action that we have seen over the years; it is about being proactive and working in partnerships with employers to make sure that a business can change and adapt to customer needs, or respond to competition in the market in the most effective way. Recent figures show that 76% of union members resolve their issues before taking formal action via a tribunal, whereas this figure is 69% for non-union members. Trade union members’ claims are less likely to go through to tribunal than those of non-members, with 13% of members’ claims ending in a tribunal compared with 21% for non-members. The tribunal figures also show that only 28% of claims are from trade union members.
A number of issues have been raised which I shall deal with very briefly due to time constraints. My noble friend Lord Balfe referred to the deduction of union subscriptions from employees’ salaries. This is for employers and unions to agree. Some unions feel that direct debit is more favourable. The Government support unions’ right to collect the subscriptions as they see fit.
Lord Kennedy of Southwark
I am sorry to interrupt but the Minister is not going to be able to respond to all the questions that I asked in the next couple of minutes. Therefore, will he respond to those he can and give a commitment to write to noble Lords on the points he will not be able to cover and place a copy of the letter in the Library of the House?
Lord Popat
I will certainly do that and place a copy in the Library. The noble Lord, Lord Morris, raised the very important issue of blacklisting trade unionists. The Government are clear that blacklisting is an unacceptable and illegal practice. We take any allegation of this practice very seriously. Indeed, the Secretary of State has asked anyone who has information about this practice still going on to get in touch with the relevant authorities. The Employment Relations Act 1999 (Blacklists) Regulations 2010 make it unlawful.
The noble Lord, Lord Kennedy, asked whether the Government can work with the trade unions. Of course, we can work with the trade unions. The Government believe that trade unions have a key role to play in resolving workplace disputes. Representation in the workplace reduces voluntary exit by employees by about 5% to 10%, which helps business retain key skills. The noble Lord, Lord Kennedy, also asked about the health and safety performance of the agricultural sector. I have covered health and safety, but I do not have agriculture on my brief and I will have to write to the noble Lord.
The noble Baroness, Lady Dean, mentioned workers’ participation, and having share ownership schemes. I believe there are many companies that have share ownership schemes. This is up to individual companies and employees to agree upon. My brief does not say what government policy is on this, but I would be happy to write to the noble Baroness.
Baroness Dean of Thornton-le-Fylde
Will the Minister also kindly undertake to respond to my question about the plans which have been reported in the press on further trade union legislation? Would he kindly reply to me in writing if he does not have this information today?
Lord Popat
Certainly the noble Baroness is right. I read in the Times this morning about possible legislation. This is not the policy of the Government. It may the Conservative Party policy, but I do not know what its manifesto will be in 2015. I will certainly be writing to the noble Baroness.
Lord Balfe
Will the letter be sent to all of the Members who have participated in the debate, please?
Lord Popat
I will certainly do that and I will put a copy in the Library for other Peers to look at.