Shadow Chancellor: IER Manifesto will inform future Labour policy

30 June 2016

Shadow Chancellor John McDonnell has said that the Institute of Employment Rights’ Manifesto for Labour Law will be used as a blueprint for future Labour policy.

He was speaking at the launch of the IER’s proposals on 28 June 2016, where he was joined by Shadow Minister for Trade Unions Ian Lavery, the General Secretaries of the BFAWU, FBU, CWU and NUT; and senior representatives from UNITE and the TUC.

The Manifesto was drafted by 15 leading labour lawyers and academics at the Institute of Employment Rights (IER), an independent think tank, in response to the Labour Party’s Workplace 2020 Consultation launched by Jeremy Corbyn in May.

Key recommendations include:

• Reinstating a Ministry of Labour
• Reinstating sectoral collective bargaining across the economy
• Repealing the Trades Union Act


In its Manifesto for Labour Law, the IER recommends a labour model closer to that of the UK’s major European competitors, the majority of which negotiate wages and work conditions at a sectoral level through the process of collective bargaining between trades unions and employers’ federations.

Collective bargaining coverage averages at 62% in Europe and rises to 80% among the strongest economies (Germany, Sweden, Norway and Denmark). It is estimated to have fallen below 20% in the UK, the second lowest in Europe. In the absence of collective bargaining, wages and conditions are set by the employer unilaterally – save for the lowest paid who are protected by the minimum wage.

Much modern research has shown that high collective bargaining coverage diminishes inequality, boosts productivity and benefits the economy as a whole.

Inequality, poor work conditions and low productivity

The UK is the most unequal country in Europe in terms of wage inequality. This income gap has been linked to widespread economic, health and social issues, including crime, drug abuse, mental illness, anti-social behaviour, and poor economic resilience on a national scale.

The average Briton works longer hours a day, more days a week, more years in their lifetime, and receives a lower pension when they retire than most of their European counterparts. In addition, they can expect lower levels of education and training; get fewer paid holidays; and lower compensation for redundancy, sick and parental leave. A greater proportion of them live in poverty, and the State is forced to subsidise their wages more so than anywhere else in Europe, putting strain on the public purse.

According to the latest Office for National Statistics figures, the productivity gap between the UK and comparable economies reached its widest point since records began in 2014, with output per hour now 18% lower in the UK than across the rest of the G7. Low productivity puts the UK at risk of slow growth and high inflation.

Shadow Chancellor, John McDonnell, said:

“The IER provides us yet again with a significant contribution to the debate now underway in the Labour Party about reforms to Employment Law that will be implemented when Labour returns to power. This expert advice is a vital element of our policymaking process.”

Ian Lavery, Shadow Minister for Trade Unions and Civil Society, said:

“As part of our Agenda 2020 consultation to develop policies for the next election, we identified the need for an industrial relations strategy as a key priority for the UK. We cannot compete in an increasingly complex global environment without fostering strong partnerships between the state, employers and the workforce. We must work together if we are to build a strong economy that is truly resilient and sustainable.

“Historically, trade unions have played an essential role in bridging the gap between these stakeholders, and as such are best-placed to take a central position in future industrial relations strategies.

“We thank the Institute of Employment Rights for this important report and will take their policy recommendations into account.”

Co-author Professor Keith Ewing, IER President and Professor of Public Law at King’s College London, explained:

“Policy over the last 35 years has focused on destroying collective bargaining, making it easier to hire and fire workers, provide them with insecure positions such as zero-hour contracts, and pay them low wages. This has led to a business model reliant on churning out low-quality services and products and disposing of, rather than training, existing staff. We know this reduces productivity in our economy, and low productivity leaves us vulnerable to financial collapse.

“In addition, competition based on cheap labour has disincentivised UK employers from investing in research and development to improve the quality of their output and efficiency of their processes; and from upskilling their workforce, which has led to a recruitment crisis.

“In 2013, nearly a quarter of vacancies were left unfilled due to a lack of appropriate skills in the available workforce. It should be a national priority to invest in our population. Most importantly, without collective bargaining there is no democracy at the workplace and workers are denied a voice in their own terms and conditions. Our international Treaty obligations require it and in this way we can promote better dialogue between workers and employers and untap the potential of our workforce.”

Co-author John Hendy QC, Chair of the IER and a barrister at Old Square Chambers, added:

“The perception of trade unions in the UK has become largely separated from reality. Negatively slanted media stories have painted a picture of the labour movement as the enemy of economic resilience but from looking at the data and comparisons to similar economies, we know the opposite is true.

“Re-establishing widespread collective bargaining (required by international law) has been shown to raise wages, diminish inequality, and boost productivity. Workers with more spending power create demand for products and services, which fuels higher levels of employment.

“Promoting greater wealth and opportunity among those on lower incomes stimulates what we call a virtuous circle of growth, in contrast to today’s vicious circle of plummeting wages, low opportunity, and widening inequality.”

The authors also propose that individual employment rights such as those around access to justice should be reviewed to ensure workers do not face unnecessary barriers; criminal penalties should be introduced for unscrupulous activities such as blacklisting; and laws designed to prohibit strike action for instance, permitting agency workers to be used as strike breakers should be repealed.

– ENDS –

Notes to Editors

For interviews with John Hendy QC and Professor Keith Ewing, or any other queries, please contact Sarah Glenister at sarah@ier.org.uk.

Launch event

The launch event was held in the Boothroyd Room at Portcullis House Westminster at 6pm on 28 June 2016.

Speakers included:

• John McDonnell (Shadow Chancellor)
• Ian Lavery (Shadow Minister for Trade Unions and Civil Society)
• John Hendy QC (IER Chair and lead author of the Manifesto)
• Professor Keith Ewing (IER President and lead author of the Manifesto)
• Kevin Courtney (General Secretary, NUT)
• Matt Wrack (General Secretary, FBU)
• Ronnie Draper (General Secretary, BFAWU)
• Dave Ward (General Secreatry, CWU)
• Gail Cartmail (Assistant General Secretary, UNITE)
• Hannah Reed (Senior Policy Officer, TUC)

The Manifesto for Labour Law

The full report can be purchased here. A free copy can be accessed for journalistic and review purposes by contacting sarah@ier.org.uk.

Authors of the Manifesto for Labour Law were:



• Alan Bogg (Professor, Oxford University)
• Nicola Countouris (Professor, University College, London)
• Ruth Dukes (Senior Lecturer, Glasgow University)
• Keith Ewing (Professor, King’s College, London)
• Michael Ford QC (Professor, Bristol University)
• Mark Freedland QC (Hon) (Emeritus Professor, Oxford University; University College, London)
• John Hendy QC (Hon Professor, University College, London)
• Phil James (Professor, Middlesex University)
• Carolyn Jones (Director, Institute of Employment Rights)
• Aileen McColgan (Professor, King’s College, London)
• Sonia McKay (Visiting Professor, University of Greenwich; University of West of England)
• Tonia Novitz (Professor, Bristol University)
• David Walters (Professor, Cardiff University)
• David Whyte (Professor, Liverpool University)
• Frank Wilkinson (Emeritus Reader, Cambridge University)

The Institute of Employment Rights

The Institute of Employment Rights is a think tank for the labour movement and a charity. We exist to inform the debate around trade union rights and labour law by providing information, critical analysis, and policy ideas through our network of academics, researchers and lawyers.

We were established in February 1989 as an independent organisation to act as a focal point for the spread of new ideas in the field of labour law. In 1994 the Institute became a registered charity.