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Remaking our case for collective bargaining

The case for strong trade unions has never just been about what we can do for our members. Of course, we all rightly celebrate the benefits that union membership brings, whether it is better pay rises, proper maternity and paternity pay, or enhanced safety at work. But the international evidence is clear that the value of unions extends far wider into the economy too, helping to raise productivity in both the private and public sectors, improving skills, and breaking down the barriersthat hold people back from fulfilling their potential.

The failure of the Government’s Industrial Strategy to mention unions is symptomatic of the long-term failure of the UK economy to get to grips with employee voice and the role workers play in addressing economic and business performance issue. It also overlooks the domestic evidence from key sectors, such as manufacturing, energy, automotive industry, where a genuine partnership between unions and employers has helped improve skills and performance.  This is not to say that unions themselves do not face challenges. Membership has long been on the decline, falling from around 13 million in 1979 to around 6.5 million today. The problem is particularly acute in the private sector where only around 13% of workers are members of a union.

The result is that collective bargaining coverage in the private sector has fallen to roughly 15% and the vast majority of all private sector employees have no collective voice in the workplace. This is unhealthy for workers and businesses alike. A Gallup study from 2013 found that higher employee engagement could raise productivity by up to 17% while the government’s own research in 2007 estimated that the productivity gains generated by unions was worth between £3.4bn and £10.2bn per year to the UK economy.

That is why Prospect have partnered with think tank ResPublica on A New Bargain, a report making the case for an expanded role for unions as part of a fresh industrial settlement focused on raising productivity and spreading prosperity through the economy. The report has many recommendations, but at its heart is an ambitious and evidence-driven argument for collective bargaining as a motor not only for justice but for increased economic performance, powering the economy by harnessing the best asset that an organisation has: their people.

There is a growing consensus across the political spectrum that there is something fundamentally broken about British capitalism. It is not productive enough, it doesn’t spread wealth fairly through the economy, and it is too prone to the kind of corporate short-termism and failure that we have seen recently with the collapse of Carillion. And with a changing world of work, through automation, freelancing and changing attitudes around work, unions need to remake our case for a fair deal at work and what this will look like for government, employers and potential members. In that context the time is right for a new settlement, and unions should be leading the charge by demonstrating that not only are we the ones with a plan for how to improve our economy but that we are also prepared to change ourselves where necessary.