Workers v bosses: the right is obsessed with zero-sum rows over trade union power. Starmer is right to ignore them

“I believe in management’s right to manage – and I also believe in the trade unions’ right to stop them.” This combative adage has always been attributed in my experience to Hugh Scanlon, who went from being one of the last of the overmighty trade union barons in the turbulent Britain of the 1970s to spending his later years as an actual baron of the realm before his death in 2004.
The words certainly represent Scanlon’s generally irreconcilable view of industrial relations under capitalism, as I can confirm from an expensive lunch I once had with this deeply interesting man in the 1980s. Many on the Marxist left of Scanlon’s era would have agreed with his words, the miners’ leader Arthur Scargill among them. And there are some union activists who still subscribe to them today.
Keir Starmer’s Labour government is emphatically not in the business of encouraging this approach. Quite the contrary. The watchword of the industrial relations section of Labour’s election manifesto this year was not conflict but its very opposite: partnership. The emphasis on partnership is central to the agreement that Labour and the unions crafted before the election, in its “new deal for working people”.
Look inside the new deal document and you will find a menu of strengthened employment rights on issues such as zero-hours contracts, parental leave and unfair dismissal protections. Each one of them has strong public support and strong union support. But you will also find a commitment to “a new partnership with business and trade unions” to achieve them, as well as the promise of “a new era of partnership” to put an end to the wave of strikes that marked the Sunak government’s final months.
Labour has pledged to turn all this into an employment rights bill within its first 100 days in government. This is pretty rapid stuff, even for a new government. It is all wrapped in multiple pledges of consultation, which will not make the legislative process simpler. But if there is one thing you can say about the Starmer government already, it is that it appears pretty well prepared. It also has a huge Commons majority.
Yet the brisk tempo means that the political temperature surrounding the bill is rising fast, too. Some of this has been triggered by the government’s strategy of clearing the decks of the long-running industrial disputes it inherited from the Conservatives in July. Labour has quickly settled with junior doctors (who are now balloting on the issue) and, much more controversially, with train drivers. It has also agreed an above-inflation award for teachers, following a pay review body recommendation.,
The wipe-the-slate-clean approach makes political sense, as even the former Conservative rail minister Huw Merriman admitted this week. But the train drivers’ union’s almost simultaneous decision to call 22 days of new strikes in a separate dispute has made ministers’ approach look suddenly naive. Downing Street was itself blindsided. This has alarmed and encouraged critics of the whole new deal approach, who now see an opportunity to wrest concessions from the government.
Starmer was reported this week to have been warned to ease off by business leaders claiming firms may be “held to ransom” by the bill’s proposals. The rightwing press is on the charge, too, with the Daily Mail front page last Saturday asking: “Has Labour lost control of the unions already?” Tory leadership candidates have gratefully followed suit. James Cleverly, this week’s apparent frontrunner in the contest, charged Labour with being “played by union paymasters”.
It will come as no surprise to learn there is a lot of exaggeration in all this. If the bill, when published, reflects the new deal document from May, as it almost certainly will, there will be little on which business has not been quite actively consulted. Moreover, the significant changes to employment law are expected to be phased in quite carefully. Even the sections of the bill specifically related to union activities, including the abolition of the requirement to maintain a minimum level of service in public sector disputes, will leave a lot of industrial relations law of the post-Scanlon era unamended.
Underlying these arguments is something that is insufficiently understood, even within government. Employment law reform is not the same thing as trade union power. The two things have many connections, but they are not coterminous. So to conduct the debate about the legislation as though it represents a return to the failed past is wrong.
Parts of Labour’s new deal seem to recognise this reality. That’s why the emphasis on partnership, while certainly still largely aspirational, is also so fundamental. Partnership, at least in theory, can infuse the efficiency and success of a business in ways that trade union recognition and collective bargaining rights do not achieve so well. Trade unions are a necessary condition for a good business. But, as Will Hutton argues in his recent book This Time No Mistakes, not a sufficient condition.
For too many years, both sides of the divide have preferred a more zero-sum approach. Too many employers have simply been anti-union as well as indifferent to their workforces. Too many unions have seen industrial action as the only way to get what they want. It is why some on the employer side hark back so often to the Thatcher years, and some on the union side to the days when the law was largely kept out of industrial relations. And it is why some on both sides are so slow to change.
Yet this rootedness in old thinking leaves out some vastly important changes in work and society since the Thatcher years. Union numbers are now less than half what they were in 1979. Workplace fairness and employee satisfaction have been pushed way down the scale of management concerns. One of the prime reasons for Britain’s low productivity is that we have failed to revisit the role of codetermination between employers and employees over issues of workplace and corporate governance.
Labour’s employment agenda is very radical. But it is not radical in the old, zero-sum way that the Daily Mail and others like to pretend. It is radical in a new way, a way embodied in the emphasis on partnership. If it is successful, the Labour approach has the potential to push aside much of the old thinking about work and the old assumptions about what makes a good business.
It is far from clear that all those involved quite grasp the scale of what they are wrestling with. The question is whether economic partnership is possible. If Labour fails, a further slide back into old-style industrial unrest could easily follow. But if Labour succeeds, it may change Britain and its economy in ways that few of us, and certainly not Hugh Scanlon, would have believed possible.