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Home » Dr Shibley Rahman viewpoint » I think I know where Ed Miliband is going with this one

I think I know where Ed Miliband is going with this one

Ed Miliband in his last ever hustings for leadership of the Labour Party, in 2010, admitted that he didn’t want the Unions to be seen as Labour’s “evil uncle” which had to be kept locked up in the attic. And yet, some people in Labour have felt that Labour would rather not mention the Unions, still terrified by the intense propaganda of “the winter of discontent” even now. Ed Miliband is at pains to state that members of the Unions contribute to part of the income of the Unions, rather than the Unions per se, and indeed following the audit trail of donations of the Unions is currently much easier than looking up how the major private equity shareholders of private and public limited companies have donated to the Conservatives. Ed Miliband has stated a number of features of the “One Nation” he has in mind, saying that there is no divide between “public” and “private”, or “north and south”, and this notion of inclusivity is opposite to the ‘dividing lines’ which have been drawn between employed and unemployed, or disabled and fully abled, City and the rest of the UK, for example.


Last year, it was clear that the protests in London against austerity were not a “damp squib” as described by David Cameron. In fact, the country’s biggest union, UNITE, launched a new membership scheme shortly thereafter “to ensure those pushed to the margins of society can benefit from collective power”. The unique offering of this Unite’s new ‘community membership’ is that it offers the unemployed, students and all those not in employment the opportunity to become part of one of the most powerful forces for equality in the country. For just 50p per week, community members will have access to financial and legal expertise, as well as the support of up to one and a half million fellow members when standing up for their local services. A further feature is that community members will be developed as ‘community activists’, bringing together people across their locality who have felt left down or excluded by politics to ensure that they too have a voice at a time of economic turmoil and social change for the nation. This is especially meritorious given the millions of voters who have felt themselves excluded by a widening “democratic deficit”. For the “one nation” philosophy to really succeed, Ed Miliband will have to combine an ideology with some sort of framework and regulation. Far beyond calls for a “responsible capitalism”, Miliband could push for a “one nation market”, and this is where a radical rethink of the rôle of the trade unions and yet another review of corporate and banking governance come in. This can all be worked up in a philosophy of ‘one nation economy’ and ‘one nation society’.


Increased regulation of the energy retail market, for example, could see caps on energy bills and a relief for consumers, but will not in the long-term decentralise electricity distribution, or create greater retail competition to break up its supply. This does not involve a return to ‘tax and spend’, and involves the dreaded ‘P’ word which nobody dares to mention for obvious reasons. In an echo of Michael Sandel and the “public good”, public policy should instead seek to grant “the many” the power to take hold of such markets and indeed open up the opportunity for communities and smaller groups to enter in. The country has of course made previous attempts at ‘rebalancing the economy’, though probably not in the sense of Sir Mervyn King in his speeches of 2009 and 2010. The “Report of the committee of inquiry on industrial democracy” (1977) Cmnd 6706, also “the Bullock Report” for short, was a report proposing for a form of worker participation or workers’ control, chaired by Alan Bullock. The idea was seen by some as a way to solve the chronic industrial disputes and to enhance participation of employees in their workplace. This Committee of Enquiry into Industrial Democracy had been set up by the Labour government of Harold Wilson in December 1975, in response to the European Commission’s Draft Fifth Company Law Directive which sought to harmonise worker participation in management of companies across Europe.  This report was not unanimous, as a majority report it was signed by Bullock and as members of the committee: three trade unionists, two academics and a city solicitor. The authors of the reply to this report conceded that, if more people are able to influence decisions which closely affect their work, the more effective will that involvement be.


Company law has failed to narrow the divide between the wages of workers and employees and their directors; in fact, the income and inequality gap have got worse. Last year, nearly 60% of the shareholder vote went against WPP’s remuneration report at its annual general meeting, including those held by Scottish Widows, Standard Life and Co-operative Asset Management, marking one of the biggest revolts of the “Shareholder Spring” so far. CEOs constitute a very strange market: excluding those with the potential to become leaders and including only the incumbents distorts prices. The failure of shareholders to influence the running of a company, except in extreme situations, has caused the ratcheting up of CEO pay over two decades to the point where millions are the norm and those paid less than tens of millions feel cheated. The median pay of FTSE 100 CEOs rose 10 per cent last year, according to Manifest/MM&K, the advisory groups. Meanwhile, investor returns have been completely uninspiring – the 10-year total return of the FTSE 100 is 5.5 per cent a year, with WPP at 5.4 per cent. It is unsurprising that Labour will wish to look elsewhere for a system that works, including a German-type “co-determination”. Its advocates say it is a win-win scenario emphasising better information flow of shop-floor knowledge to the very top of the company, fewer workdays lost due to industrial conflict compared to other countries, smoother implementation of changes legitimised by a more diverse board, and a general contribution to the common good through democratic structures.  Trade unions bargain with employers to get better pay for members. Trade unions campaign on particular issues, for example low pay, discrimination and bullying. Trade unions argue that they can help you if you have a problem at work. Research shows that union members in the UK receive higher pay (on average 12.5% more), better sickness and pension benefits, more holiday and more flexible working hours than non-members.


Some people join in order to feel part of a wider community at work. Others join because they believe in giving employees a collective voice and making sure workers and not just employers and senior managers benefit from the success of an organisation. This current Coalition, with Conservatives and Liberal Democrats components pushing and pulling in different directions, has been discussing whether it should be ‘easier’ to hire and fire people. It is known however that workplaces are safer where there is a trade union—recent studies show that organisations that have trade union health and safety committees have half the injury rate than those that manage safety without unions. The UK labour market is already one of the least regulated among comparable nations. This immediately makes predictions of any significant employment effects from further deregulation implausible. Also nations with much higher levels of regulation have been at least matching and in some respects exceeding employment performance in the UK and other low regulation countries for some time. Meanwhile the exemplary low regulation economy, the United States, has registered an abysmal employment performance at least since the turn of this century. The idea of lower regulation as a route to employment growth is therefore a particularly hard sell these days.


In England,  the steepest falls in union membership came between 1979 and 1998, when unions were affected by a series of legislative changes which included ending the closed shop – an agreement under which employers agreed to hire union members only. Since then, numbers have been pretty stable. It can be argued now that unions “haven’t kept up with changes in the economy”, particularly in terms of the shift from manufacturing sectors to other sectors such as technology. While industries that have traditionally been highly unionised, such as manufacturing and engineering, have declined, workers in new and growing industries in the private sector have not sought union membership. Even in education, there is a growing workforce consisting of independent freelance contractors, who can be fired at the drop of the hat. The possibility remains that citizens merely consider the Unions irrelevant, in that there is not a long history of union participation in that sector, and individuals can be convinced about the benefits of access-to-education, or legal protection. This Coalition, whether it was explained to the general public or not, has embarked on a “roll-out” of outsourcing the State’s functions to an oligopoly of private and public limited companies. The chief purpose of the Health and Social Act (2012) was to allow a much larger number of private companies doing the functions of services in the NHS under the NHS branding. Yet, they are still all private companies. You only need to look at the tensions of UNISON at Circle Hinchingbrooke to see how a dysfunctional relationship with the Unions is neither productive for profitability nor cohesion of society. Adverse union influence is much diminished in the private sector, with fewer members and far fewer working days lost to industrial action compared with 30 years ago.


Therefore, Ed Miliband has a golden opportunity to establish a narrative which is entirely consistent with a “one nation economy” and “one nation society”, and would be able to combine his pet interests of predistribution and responsible capitalism with a recognition that the Unions are not the “evil uncle”. Instead, this omnishambles Coalition has become dependent on a series of accountancy stunts to maintain a Ronseal veneer of skill. A number of months ago, parliamentarians and those campaigning against work-for-your-benefit schemes noticed that people doing unpaid work experience – a growing band of people – could be classified by the ONS as employees of companies. This meant that although they were on government training and employment schemes, they were actually being included among the statistics for 25 million plus employees. And how was George Osborne able to pull his deficit “rabbit” out of the hat so unexpectedly in the Autumn statement 2012? First, he added the expected £3.5bn receipts from the 4G mobile spectrum auction – even though it’s yet to take place. Second, he included the interest transferred to the Treasury from the Bank of England’s Quantitative Easing programme (worth £11.5bn), despite the Institute for Fiscal Studies warning him that it would call into doubt his credibility. The country is sick of these pathetic manoeuvres, as it openly enters a triple-dip, and Osborne lobbies the entire population on how our cost of borrowing is totally unrelated to the downgrading of credit rating due to flatlining growth (honest). A secret weapon had been to discredit the Unions, even toxify them, and to portray basic employment rights as an act of selfishness of people who wished to contribute to the society or the economy. Ed Miliband is coming warm to building the sort of society he wishes to take further. Cognisant that a baboon could have won in 1997, he has the chance to set an agenda for a generation after the Conservatives had declared themselves unfit to govern, and after the Liberal Democrats had lost all credibility entirely. Widening Union membership to the private sector, and producing an architectural framework for ‘one nation’ and ‘one society’ where some people do not clearly benefit at the expense at the others, could be an incredible thing to achieve.

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