Britain's unions make a comeback

The recent dispute between British Airways and its cabin crews, although settled without a strike, is part of a growing wave of labour militancy in a country that was supposed to have tamed the unions.

by The Business
Last Updated: 23 Jul 2013

The number of days lost due to strike action in the year to September 2006 was 745,000, up 310% on the previous year. Civil servants are the latest to take strike action over pay, although many workers and professionals in the public sector have enjoyed significant real pay increases since the late 1990s.

Public sector militancy never wholly disappeared despite the labour reforms of Conservative governments in the 1980s and 1990s. However the real surprise for business is the return of labour disputes to the long quiescent private sector.

Wal-Mart owned Asda was hit by strikes over the introduction of new technology at distribution networks, despite its employer's previous reputation as anti-union. Rolls-Royce, the automobile rescue service AA and other companies have faced the threat of industrial action recently.

The increase in labour unrest is on the back of 15 years of economic growth and record employment levels. Combined with retail price inflation of 4.4%, which is higher than wage growth of 4.1%, and some of the ingredients of Britain's 'industrial disease' of the 1970s are present, if in a milder form. Union membership remains about half of its late 1970s peak.

Unions are now targeting Polish migrant workers, the largest single group of migrants from Eastern Europe whose growing presence over recent years has dampened down wage growth by increasing the supply of low-cost skilled labour in the UK.

The issues of 'fat cat' pay, City bonuses and the house price boom that has priced many at the lower wage end out of the housing market, have all helped unions gain new recruits. The TGWU, which led the dispute at BA, has recruited 500 new shop stewards and 11,500 members at EasyJet and J Sainsbury. Unison signed up 32,000 new members last year.

Union consolidation will this year give rise to a super-union merger of the giants TGWU and Amicus, with a combined membership of nearly 2m across the private sector. Amicus has signed cooperation agreements with sister unions in Germany and the US and predicts the creation of a global union in the next decade, to finally bring about the union dream of meeting global companies across their production centres.

BA is still faced with unions that have retained power since the days when the carrier was a publicly owned enterprise. The cabin crew dispute follows 2005's strike by workers at its in-flight meals supplier, Gate Gourmet. BA's chief executive Willie Walsh was able to avert the recent threatened cabin crew strikes, but has been criticised for the way he handled the dispute. He still faces a £2.1 billion pension fund deficit and a four-strong group of unions ready to fight any cuts.

Unions in Britain have won a number of improvements to state benefits from the Labour government, including extended minimum holiday entitlement and paternity leave. But Gordon Brown, the likely next prime minister, is set to resist growing calls for the reversal of Margaret Thatcher's anti-union reforms that were left in place by Tony Blair. The unions still hold the party's purse strings but Brown will face on outcry from business if he gives the unions any more concessions over labour market flexibility.

Source: Back to the picket line
The Business, 3 February

Review by Joe Gill

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