How not to deal with strikes

Good morning class, and welcome to the next session of Governing Is Hard 101. Today we’re going to be talking about strikes.

Neither Labour nor the Conservatives seem to have any idea what to do about public sector strikes (which are, significantly for reasons we’ll get to, the only ones which trouble the nation today). Each party has, in the proper tradition of two-party politics, taken what appear superficially to be diametrically opposed approaches to the problem. Neither has worked.

The Tories’ preferred approach, drawing on the party’s noble tradition of Standing Up to the Unions, was the bullish stand-off leavened with anti-strike legislation. Alas, the latter weren’t effective and the former didn’t make the unions go away, so the result was a lot of strikes and a fair number of pay capitulations, offset by fearsome pay restraint scheduled for right after the next election.

While all this was going on, Labour was extremely critical; time and again, Opposition ministers chided the Government for not getting round the table and sorting things out. Not mentioned was what purpose is served by sitting round a table when each side knows the other’s terms and finds them unacceptable; this is presumably because Labour’s strategy, astutely unmentioned, was simply to fold.

And upon taking office, fold they did. Rachel Reeves’ spending splurge at the start of this Parliament consisted in large part of abandoning Jeremy Hunt’s planned wage restraint (which he would definitely have stuck to this time) and doling out generous pay settlements to public sector workers, with no strings attached regarding productivity increases and the like.

This too drew on a grand party tradition, this time the Old Labour one of Maintaining Social Peace by Working With the Unions. And it, too, did not work, for the quite obvious reasons set out by Daniel Hannan in his column of yesterday. Now public sector pay demands are another of the runaway revenue expenditure pressures squeezing the life out of this government (and indeed the state).

It’s certainly a bleak tableaux for the poor taxpayer. Both major parties lie broken before the might of the public sector unions; both obduracy and supplication have failed. Could it really be, as one former Cabinet minister put it to me a couple of years ago, that public sector strikes are simply always going to be with us?

No. Or at least, not necessarily. To see why, consider the two most spectacular showdown strikes of the 1980s: the 1984-5 Miner’s Strike and the 1986 Wapping Dispute. In the early Eighties, the unions at the heart of both must have seemed equally unconquerable as the public sector unions today. The miners had seen off several governments, whilst the printworkers had long decided whether or not a given newspaper got to publish that day.

In the case of the miners, both the Conservatives and Labour had tried the same playbook as their modern successors. The Tories under Edward Heath had squared up, then folded; Labour tried to lean on its supposedly strong working relationship with the unions, only to find it had rested on a previous generation of union leaders and that one danegeld led to another, as danegelds do.

Yet both the National Union of Mineworkers and the print unions (the National Graphical Association and SOGAT 82) were crushed. By the end of the decade, neither was any more a power in the land. Margaret Thatcher and Rupert Murdoch each managed what previous ministers and moguls had failed to accomplish. What was their secret sauce?

The critical difference – and it sounds really obvious once you say it – is that neither of them picked a fight with the unions until they had both engineered a fight with an actual victory condition and accumulated the resources needed to prosecute that fight to the finish.

In each case, the victory condition was a fundamental structural change which broke the unions’ leverage. For Thatcher, that meant shutting a lot of mines and importing enough South African coal to bridge the gap to a new energy mix; for Murdoch, it was acquiring state-of-the-art printing technology and buying a brand-new (and eminently defensible) plant to put it all in.

This approach, which we might call “having a strategy”, was evident in other ways too. Both took care to divide the opposition by finding allies where they could: the Union of Democratic Mineworkers in the government’s case, the staunchly anti-communist electricians’ union, the EETPU, for News International. (I heartily recommend Maverick, the autobiography of the EETPU’s leader during the 1980s).

The Thatcher Government also took care that the teeth on its anti-strike measures, such as the sequestration of trades union assets, were not things with which the unions could refuse to comply (or pressure employers to refuse to comply).

Analysed through this lens, the problem facing today’s politicians is clear enough: like their counterparts in the 1970s, they are trying to make the problem go away without actually changing anything. It didn’t work then, and it won’t work now. Nor will bleating that it helps Nigel Farage.

It isn’t obvious that Britain really needs more anti-strike legislation. The Thatcher-era stuff, especially the bans on flying pickets and secondary strike action, have worked perfectly, in the private sector at least. When you can only strike over a direct wage dispute with your own employer, the prospect of shutting down whole sectors and effecting major political change by un-parliamentary means evaporates. Except, that is, where an entire sector (or a sufficiently dominant section of it) is employed by the government and has national pay bargaining, as is the case with the NHS.

An actual solution to that is a structural change that breaks that dynamic. No more, no less. One could, for example, change the way NHS trusts are funded towards a more grant-based model and then make trusts the legal employers of their medical staff, with freedom to negotiate their own terms.

This would allow a hospital trust’s staff to have meaningful negotiations with their own management, which would be empowered to reach settlements – and over a finite budget, rather than the abstract and superficially-inexhaustible resources of the Exchequer. It might thus also incentivise those staff to support measures to top up that pot, such as the trust-administered private provision already run by some London trusts and which directly cross-subsidises it, unlike most private health spending.

(Such hybrid structures used to be more common in British public services. There used to be schools which took both fee-paying and free pupils in large numbers, and the NHS has had ‘pay beds’ since its foundation, despite the best efforts of NUPE in the 1970s.)

Driving through such change, or anything else like it, would surely be extremely difficult. Any government which attempted it would need a well-thought-out strategy, including the identification of potential allies in the sector and the marshalling of resources (or alternative capacity) to see the nation through a confrontation.

But that’s what dealing with public sector strikes, and the attendant pressure of wage demands on the public finances, actually entails. If the other side has leverage, you either find a way to break that leverage, or you pay up.

Class dismissed.

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