Emily Carver: Ministers cannot allow trades union militancy to become the norm once again

Emily Carver is Head of Media at the Institute of Economic Affairs.

As the heatwave eases, Britain’s summer of discontent is set to get hotter. The Government has refused to grant inflation-busting pay increases to public sector workers, with proposed settlements far below the forecast level of inflation, which is expected to peak at 11 per cent this autumn.

Ministers may have hoped that militant trade unionisation was a spent force, but this is clearly no longer the case – and recent developments may call for tougher action.

After the RMT brought railways to a standstill last month, further threats of walk-outs are set to bring the rail network to a juddering halt later this month and in August.

Rail strikes are of course only the most visible feature of the ongoing industrial unrest. Royal Mail workers have today joined the bus drivers, teachers, NHS workers, civil servants, local government employees, barristers and, god forbid, parking wardens all threatening strike action over the coming weeks.

It may well be that the Government’s below inflation pay rises, which would see teachers for example receive a between five and 8.9 per cent increase from September, are not enough to appease the agitated unions.

It’s worth saying that it’s understandable that after two years of on-off lockdown, wage stagnation and now rising inflation, people are looking for a pay rise. Real pay is down and with it disposable income.

But the Government must get better at articulating trade-offs. Grant Shapps exaggerated in his claim that an inflation-busting increase for two million public sector workers could leave the UK ‘permanently poorer’. But it is true that over-generous pay awards could lead to more borrowing, higher interest rates to control inflation, and monetary contraction that could spark a recession.

Conceding on redundancies or working practices will also come at great cost to the taxpayer. Giving in to the RMT’s demand for a guarantee of no compulsory redundancies for 2022, for example, may seem to involve little cost in the short run, but on the railways – as would be the case in the NHS or the civil service – such concessions could make it very difficult to achieve useful and much-needed reform, with long-term negative consequences for productivity.

And every increase is of course an additional burden on the taxpayer, in the short or longer term, either through higher taxes or debt to be repaid later.

Then there’s the fact that those in the public sector are still, on average, paid more, and enjoy the security of better pensions, better working conditions and better holidays than their private sector counterparts.

Those in low paid jobs elsewhere, including in retail, hospitality, textiles and food services, may not feel to kindly about stumping up extra taxes to afford a ten or 11 per cent pay rise for public sector workers, who were largely protected during lockdown from pay cuts and job losses, while they themselves only receive what the market can bear.

At the same time, much of the public appears unaware of just how out of touch unions are with the modern economy and labour market. For many, particularly younger workers, the idea of being in a union is at odds with their experience of working life in the labour market, where there are such a wide range of employers and little desire for (or possibility of) a ‘job for life’.

This is reflected in the numbers which show we’re at a particularly low ebb in terms of trade unionism. In 2021, just 23.1 per cent of employees were union members. As a comparison, when unions were at the height of their power and influence in 1979, this figure stood at approximately 50 per cent. Any private sector unionism is mainly found in previously public sector legacy industries.

And, although there are certainly many poor union members, on average they are relatively well-off and on average much older than the workforce as a whole (41 per cent of all union members in 2021 were aged 50 or over).

Making the case for restraint is never going to be popular when we have near 2.5 million people working in the public sector, many of whom feel hard done by. But if the threat of strike action persists, despite pay settlements, the Government may have reason to take tougher action.

To do so it has a number of measures in its toolbox, many of which are used in perfectly civilised countries, such as Germany, Denmark, Spain, Canada and Australia, and none of which would threaten the fundamental right to join a trade union.

There could be changes in the conditions for union recognition, limitation of paid time off for union activities, minimum service agreements, strike bans in the civil service, compulsory arbitration in long disputes, and action to break up concentrations of union power in the public sector.

Taking a tough approach may be unpalatable to many, particularly to the loudest voices, but militancy cannot be allowed to become the norm once again in this country, holding the government and public to ransom – at a time when nearly all of us are feeling the pinch.

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