If companies are to see labour as a resource worthy of investment, not just a factor of production, workers need to be represented. Simon Caulkin.
It seems like an image of a distant age. For three decades, the distinctive Bloomsbury office block fronted by the Epstein statue was as inseparable from the headlines as 10 Downing Street. Upstairs, the wood-panelled chamber on the second floor of Congress House, headquarters of the Trades Union Congress, was one of the great power centres of the UK - the original smoke-filled room where the barons of the TUC hatched plots, compacts and compromises which made or brought down governments.
Then - nothing. Looking back, the most complete of Margaret Thatcher's undertakings of the 1980s was the erasing of the British labour movement as a political and economic actor. First, the abrupt ending of tripartism deprived the TUC of all influence on economic policy. Then the repeal of historic union immunities and the deregulation of the labour market did much the same for individual unions. Faced with a vengeful government, and with employers bent on derecognition and individual employment contracts, the unions' centralised structures and traditional political rhetoric were now as out of place as a cloth cap at Ascot.
It has been a long, hard road back. And it leads to a different unionism than that represented by previous generations of union leaders. For these days the bust of Ernest Bevin at Congress House is more likely to look down on seminars about organising strategy or training methods than on grand political arguments, more likely to witness flip charts and mineral water than beer and sandwiches. 'Losing members concentrates the mind wonderfully,' notes John Edmonds, the reform-minded general secretary of the GMB, drily.
Ironically, the current invisibility of the trade unions means that their transformation has gone largely unnoticed. In the '80s, they underwent a soul-searching as agonising as any company's. Says Bill Morris, general secretary of the Transport and General Workers' Union (TGWU): 'The last 17 years have been painful. But they taught us important lessons about communications and democracy and the importance of public opinion. We've learned that we don't have a God-given right to survive. We're proud of our past, but we've seen the need to make a fresh start.'
At first sight, a comeback for British trade unionism looks about as unlikely as an England triumph in any other of the sports the country has invented.
From its peak of 12.2 million in the 1970s, union membership has plummeted to under 7 million today, while overall density has thinned from over 50% to 33% of the working population. Current union membership is disproportionately concentrated in the UK's remaining factories and fragmenting public sector.
The debilitating effects of manufacturing downsizing have been compounded by the most restrictive recognition regime in the developed world, leading to a wave of derecognitions further undermining union strength. Meanwhile, the new workforce of 'Thatcher's children' - female, part-time and service workers - is one for which the unions in the past had little sympathy or understanding.
Trade union difficulties are not trivial. As Professor Keith Sisson, director of Warwick University's Industrial Relations Research Unit (IRRU), points out, the British labour movement has long been proud of the qualities that mark it out from the rest of Europe: reliance on a voluntarist approach to workplace relations with minimal legal backing, resistance to works councils and a narrow protective focus on the jobs of its members. Unfortunately, these attributes left the unions defenceless when a hostile government decided to play a different game on a different pitch. Structurally, British trade unions faithfully reflected the post-war settlement that Thatcher so comprehensively dismantled. There was a full-time head office which bargained for sectors or industries, supported by a network of local volunteer activists. When the old system of industry-wide bargaining collapsed, the unions - with fewer full-time officials and much less well financed than their continental counterparts - were ill-equipped to decentralise to the workplace to service existing members, let alone get inside the heads of the young, the female, the black and the part-time to recruit new ones. At the same time, their position was immeasurably weakened by no less than eight acts of Parliament deliberately designed to hobble their activities and 'return (the organisations) to their members'.
The nightmare that was the '80s is reflected in a membership recession which is the deepest and longest the unions have ever experienced. Indeed, for some the unions' demise is in sight. 'Unions were and are in secular decline,' the Department of Employment explained blandly and disingenuously to the House of Commons' Employment Committee in 1994. Unions remained important participants in the labour market, the department conceded, but 'all signs ... point to their long-term decline. The main reason for this is their inability to adapt to rapidly changing conditions in the labour market and the economy more generally where competitive pressures have become more intense.'
The end of history? Not quite. For this, perversely, thank successive Conservative governments. Instead of killing off the unions, they set in train a long-delayed process of modernisation. This is still incomplete, and there is no certainty about the outcome. There is far to go before the UK can boast a coherent set of labour-market institutions that underpins rather than obstructs enterprise, not all of it dependent on the unions. And the opportunities for fudge, self-serving and settling old scores will increase with the likely change of government. Yet, 'the unions have made great strides,' says Dr Jeremy Waddington, research fellow at Warwick's IRRU. For the first time this century, it's possible to discern the outlines of a modern UK labour movement.
It is impossible yet to tell whether this unlikely embryo will be born.
But to anyone who remembers the turbulent '60s and '70s, the extent of the turnabout already achieved is remarkable. The most striking changes are philosophical, above all the abandonment of the idea of progress through conflict. 'The adversarial system hasn't delivered great benefits,' admits John Monks, the 45-year-old general secretary who has brought a radically different style to the old committee-dominated TUC. A pivotal figure in the reformed movement, Monks is the antithesis of his unfortunate predecessor, Norman Willis, and the message he purveys is suitably positive. 'We want to be able to offer people solutions. We aim to be part of the answer, not part of the problem.'
It is a shared theme among the modernisers who now run the UK's largest unions. It's hard, says the GMB's Edmonds, to see how 'strike, struggle and strife' can deliver what a new generation of members want. 'If you widen the agenda to include things like training, security and promotion, you have to use different methods. You can't bully employers into making work more satisfying.' Adds Roger Lyons, general secretary of the Manufacturing, Science and Finance union (MSF): 'When you don't have muscle power, you have to use brains.'
Even the traditionally hardline TGWU has taken up the call. 'We can't compete on the basis of conflict,' Morris told his audience at a ground-breaking conference in May. 'To achieve our aims of improving competitive performance and winning the best conditions for our members, we are committed to constructive partnership with employers.' At the conference Morris called for nothing less than a redefinition of the relationships of the unions with government, employers and society at large.
To deliver the new vision, the unions have been forced to bury other shibboleths - the idea of a special relationship with the Labour Party, for one. 'No fear, no favours,' sums up Morris. 'None asked, none given.
We have a duty to represent our members to any government. Of course, we hope for a more friendly, supportive relationship with Labour. But we're above all an independent organisation which puts its members first.'
Voluntarism for another: the belief that industrial relations are best left to self-regulation by employers and unions, without recourse to the law. At the level of the unions themselves, realistic leaders acknowledge that no future government will repeal those parts of the massive body of labour law passed by the Conservatives which apply to internal union democracy - nor would they want it, since their processes now have been gifted a legitimacy which they never possessed before. In private, many bitterly regret not having done the job themselves.
At the level of the workplace, 'by embracing the law, UK unions are trying to outmanoeuvre the approach of the Conservative government,' notes Waddington. Unionists hope that less restrictive recognition rights, plus a framework of minimum standards - minimum wage, statutory employment and training rights - will restore some of the influence (and thus membership appeal) they lost in the '80s. It is no accident that the content of the minimum rights campaign coincides quite closely with that of the European social chapter. Working with the European grain instead of against it, as in the past, offers the TUC a chance to recoup at EU level some of the authority it lost in the UK with the abandonment of tripartism. As the new leaders admit, the language of Europe - social partnership, stakeholding, works councils, statutory employment rights and internationalism - opens up welcome avenues of workplace and strategic representation.
Perhaps even more than that, though, the new philosophical framework provides an opportunity for the unions to take the high ground. 'This isn't a wimpish alternative to direct influence on employers by union power,' insists Edmonds. 'There's a huge opportunity here. There's no British system of industrial relations or human relations at the moment - there's one that's declining but there's nothing to take its place.'
The argument goes like this. Voluntarism, as Warwick's Sisson underlines, is a twofold failure, in terms both of protecting workers and of delivering an effective economic system. Since there's no prospect of reinstating industry or sector agreements to deal with these issues, they can only be treated at the workplace. But here the UK has 'a big representation gap', partly as a result of trade union decline and exacerbated by the (union-willed) absence of other representative bodies. To move UK companies away from their current tendency to regard labour simply as an economic factor of production and towards a more modern view of it as a resource to be nurtured, requires that this representation gap be filled. 'Who speaks for the two-thirds of the workforce that isn't represented?' demands Sisson. 'This isn't a moral issue. British managers would perform much better if they had to explain and justify their actions to the workforce.'
Union leaders like Edmonds believe that UK industrial relations are on a cusp. The next five years will decide whether the UK continues down the US line of deregulation and anti-union hostility, adopts the European approach of institutionalised relations, or - and this would be the preference of most - a middle way avoiding both Eurosclerosis and American extremism.
The watchword, says Edmonds, is 'flexibility with security. Where you can persuade management to give guarantees of security, all the doors fly open. Look at Rover, or the things we're doing with United Distillers and Scottish Power. Once you've made the jump to giving a secure workforce responsibility for problem-solving while management executes, you can see the beginnings of something really exciting. The ideology is up for grabs; the challenge for us is to get it accepted.'
Are the unions in a position to persuade others of the logic of their case? While the unions may be right to flag up the deficiencies in the present system, having the capability to remedy them is another issue entirely. Here there is room for scepticism. One set of doubts concerns the fate of the unions' attempts at practical, as opposed to theoretical, modernisation. The second, in a spectacular irony, is whether, having dragged themselves up to date, the trade unions can find anyone to play partners with.
As to modernisation, one result of the financial pressures has been a rash of mergers as weaker organisations have sought refuge from the squalls, bringing the number of TUC-affiliated unions down to 68. Another sign of the times is that the TUC and individual unions such as MSF have been modestly successful in recruiting some of the middle and managerial classes who are most exercised by fears of job insecurity. New membership subscriptions from radiographers, physiotherapists, bank workers, assorted managers, even clergy, is for the unions a small but significant token that they can benefit from the growth of middle-class militancy.
Also on the credit side is the relaunch of the becalmed TUC. The catalyst was a historic week-long seminar organised by Cranfield School of Management for the general council in 1993. To persuade some reluctant colleagues to participate, Monks, then deputy general secretary, promised that the TUC would be the case history at the heart of the week's work. It was an inspired decision. When Monks took over as TUC general secretary, almost his first action was to implement the designs for a made-over TUC that emerged from the Cranfield discussions. Out went the internal focus and bureaucratic committee structure, in came a fresh mission as a 'campaigning and professional service's organisation', based on a series of task groups set up to develop strategies for full employment, 'human resource management' and representation. 'The thrust since Cranfield has been looking outward,' says Monks. 'We aren't interested in going back to the '70s corporatist model, but we hope we're showing people are better off being unionised rather than non-unionised in the '90s.'
After the seminar, many general secretaries quietly returned to Cranfield with their own officers, on the basis of which the business school decided to set up a dedicated Centre for Strategic Trade Union Management, certainly a British, possibly a world, first for a business school. Surreal as such a venture might once have seemed, it is hard now not to read into it a powerful symbolic bargain of the sort long accepted in mainland Europe and equally long resisted here: in the most literal sense, management and unions need and legitimise each other.
Yet while the unionists' mood is undoubtedly in tune with the Zeitgeist, it is by no means certain that they'll win. They still need to carry their activists with them into the new world of social partnerships. They must find ways of keeping their members through a lifetime of 20 or 30 job changes rather than today's five or six. Nor have they yet cracked the needs of part-time workers. And while mergers and other modernisation initiatives may have bought temporary respite, some observers question whether the moves address the underlying management problems.
Nor, despite the best efforts of the TUC's Special Review Body, have the unions yet come up with a set of new services or discontents to mine that would make up for their fundamental continuing weakness in the workplace.
Waddington's research at Warwick shows conclusively that the reason people join unions is the same as it ever was, namely to have recourse to help when there are problems at work. Unfortunately, as we have seen, it is at the workplace that union organisation is least effective.
The unions argue that there is strong pent-up desire for membership held back only by fear of employer retaliation. 'We can easily recruit where we have representation rights,' says Lyons, adding that the ground is particularly fertile among 'young white-collar workers who believed all the stuff about qualifications and yet are laid off like agricultural workers after the harvest'. Some leaders believe that, under the kind of recognition regime prevalent in the rest of Europe, levels of UK unionisation would be 2 or even 3 million higher than they are now.
There's no sign, however, that most British employers are willing to help the unions reestablish their lost position. Monks points out that 44 out of the top 50 UK companies are unionised and, more generally, that good management and good representation tend to be associated. But the continuing wave of derecognitions argues that smaller employers are mostly sceptical that the unions have changed their spots.
Similarly, the invitation to partnership doesn't seem to cut much ice.
The Institute of Directors remains unfriendly, and while the Confederation of British Industry is more pragmatic, practical cooperation is limited.
As for individual employers, 'the difficulty we've been having these last few years is finding anyone to partner with,' admits Edmonds. Despite the rhetoric of empowerment, most employers seem to be moving away from rather than edging towards participative models. Laments Edmonds: 'We're definitely on the right track. All the research is clear: you don't get better work by kicking people. The difference is that whereas in the '70s it was the unions who came on with the macho language, now it's reversed.
Management was right in the '70s, but we're right now.'
The idea of the unions putting forward a model for the salvation of British management would have once seemed preposterous. The fact that this is no longer the case is a measure of how far the movement has travelled.
But, for the unions, reformed intentions are not enough. Being able to act, as Morris puts it, as 'a positive force for good' depends on the unions completing the process of their own modernisation. Part of the future of the UK economy, as well as their own, depends on how well they do it.
History of Derecognition
Thirteen years of union-bashing
1980 Employment Act
Picketing limited to lawful strikers at their place of work. Secondary picketing restricted. Legal redress provided for employees expelled from unions for refusing to join closed shops. New closed shops to require majority support, with at least 80% of workforce voting by secret ballot. Union recognition provisions of 1975 act repealed.
1982 Employment Act
Removal of union immunity for tort (civil law) actions. Legal immunity removed for wider union actions, eg solidarity strikes. Further limitations on closed shop.
1984 Trade Union Act
Secret ballots for election of union officials once every five years; members to be balloted at least four weeks before a strike. Ballots to be held on holding of political funds.
1986 Wages Act
Manual workers had in future no right to be paid in cash. Workers under 21 removed from provisions of wages councils designed to protect low-paid employees from exploitation.
1988 Employment Act
Abolition of all remaining legal protection for post-entry closed shop.
Union disciplining of strike-breakers made illegal. Right to postal ballot in all elections and strike ballots.
1989 Employment Act
The abolition of the Training Commission.
Its functions were returned to the Department of Employment.
1990 Employment Act
Abolition of pre-entry closed shop. Union officials to take responsibility for unofficial strikes; legal immunity removed for actions supporting unofficial strikes. Remaining secondary actions made illegal.
1993 Trade Union Reform and Employment Rights Act
Automatic docking of union dues (from salaries) illegal without consent.
Workers given right to join union of choice. All pre-strike ballots made postal - employer has rights to names and addresses on ballot. All wage councils abolished; end to minimum wage-fixing. Employers can offer unionists financial inducements to leave unions.
Simon Caulkin edits the Management page of the Observer.