The attacks on collective bargaining run against mainstream economic guidance

The Transport Strikes (Minimum Service Levels) Bill is just the latest extreme blow to union power

Commentary icon28 Oct 2022|Comment

Professor Keith Ewing

President of the Institute of Employment Rights

Lord John Hendy KC

Chair of the Institute of Employment Rights

The response of the Tory government (whoever leads it) to the cost-of-living catastrophe facing the working class is not to control prices, tax the profiteering energy companies, or take steps to increase incomes.

No. Instead, it published last Friday the Transport Strikes (Minimum Service Levels) Bill. This will impose yet further restrictions on the capacity of workers to protect their wages by taking strike action where persuasion fails.

The new law is likely to be followed by legislation requiring a union to ballot its members on strike on every offer made by the employer in the course of negotiations.

Remember that we have all the controls on trade unions that the Thatcher governments imposed in the 1980s, plus the Trade Union Act 2016.

And this year, further restrictions on picketing have been accompanied by legitimating agency strike-breakers and increasing the limit on damages payable by trade unions.

Before we consider the new Bill, let’s recall where we are with the cost-of-living crisis. It was caused by a cartel of oil producing countries deciding to up the price of gas and oil though their costs remained static.

The profits of the oil and gas companies soared. This was before the illegitimate invasion of Ukraine, which made the problem worse. To save consumers, the French government nationalised the main French energy company. Our government refuses either to nationalise energy or even to tax all the unjustified profits of the energy companies.

Instead, the British government has limited the price of energy for consumers by paying the difference to the energy companies from public funds. The result is that average bills will “only” rise by an average of 150 per cent over last year’s figures. The cap will only last only until April, by which time the average energy bill is expected to be 400 per cent greater than last year.

Meanwhile other prices are rising in consequence. The consumer price index is rising by 10.1 per cent per annum The price of food is rising by 14.6 per cent pa.

The other side of the equation is income. Twenty-one million adults have an annual income of less than £12,570. The government is split on the level of increase for pensions and universal credit.

As to the wages of the half of the population who work for a living, the value of wages has been static for more than a decade.

Average regular pay is currently £574 a week. While half of our workforce earns more, the other half earn less. Wages are so low that more people claim universal credit who are in work than out of work.

The value of wages this year, under this government, is falling faster than ever. On average wages are losing value by at least 3.2 per cent pa. This is because nominal wage increases are significantly less than the rise in the cost of living.

But the point to note is that this is an average; here are 31 million workers and half of them are losing more than this.

In the public sector, where average wage increases are running at much less than half the rate in the private sector, the cut in the real value of wages is even more stark.

As the CEO of the British Psychological Society said this month, “The cost-of-living crisis is critical, immediate and severe, and disproportionately impacting those that need support the most. As well as the practicalities of being able to heat homes and put food on the table, people are also carrying the mental health load of living under this strain.”

So, wages must go up. There is only one way to do that: unions have to negotiate wage increases. Yet as the Organisation for Economic Co-operation and Development (OECD) highlights this month, “The proportion of workers who are covered by collective agreements in the OECD has steadily declined over the last three decades … weakening the bargaining power of workers.

“In the absence of countervailing power by organised labour, employers typically retain significant power to unilaterally determine wages and working conditions.”

The OECD recommendation is simple: “Protecting living standards also requires rebalancing bargaining power between employers and workers, so that workers can effectively bargain for their wage on a level playing field.

“Rebalancing bargaining power, however, also means giving a new impetus to collective bargaining and, therefore, accompanying the efforts of unions and employer organisations to expand their membership and enlarge the coverage of collective agreements.”

This, of course, has been advocated by the International Labour Organisation since before the second world war.

Even the IMF has recommended the extension of collective bargaining — and nowhere is this more necessary than in Britain, where collective bargaining coverage has fallen from 85 per cent of workers covered by a collective agreement in the 1970s to less than 25 per cent today — from one of the highest coverages in Europe to one of the lowest.

Though high collective-bargaining coverage is one of the hallmarks of the most successful economies in Europe, our government refuses to countenance extending or even encouraging collective bargaining. Instead, it imposes more and more curbs on workers to remove any leverage in wage negotiations.

The new Bill will require workers to provide a minimum service level (MSL) when taking strike action in the transport sector. Ironically, while the government happily borrows the concept of MSLs from Europe, it is legislating a “bonfire” of all workers’ rights derived from the EU. European trade unions tolerate MSLs because they do not suffer under the massive restrictions on trade union action we have in Britain.

But with even more breath-taking irony, the Bill requires employers and unions to negotiate a collective agreement establishing MSLs for the sector.

But if compulsory sectoral collective bargaining is the way to set MSLs, then it should be used to set pay, terms and conditions across every sector; these are the matters that really affect the wellbeing of our workers whose work supports the entire population.

If the government took this step, it would be following many global precedents, notably in New Zealand, the practices of western Europe, the exhortations of the ILO, the OECD, and the policy of the Labour Party. In fact, this is the only option available to address falling wages.

Professor Keith Ewing is president of the Institute of Employment Rights and Lord John Hendy KC is chair of the IER (

National conference: From Pentonville to P&O: union rights and Tory wrongs — campaigning for free trade unions, Saturday December 3, 11am, Mander Hall, NEU Mabledon Place London WC1H 9BD.

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This article was originally published in the Morning Star. We thank them for their premission to reproduce it here.

Professor Keith Ewing

Professor Keith Ewing is Professor of Public Law at King's College London. He has written extensively on labour law including recognition procedures and international standards. He is the President of the Institute of Employment Rights and a Vice President of the Campaign for Trade Union Freedom.

Lord John Hendy KC

Lord Hendy KC is Chair of the Institute of Employment Rights. He is a barrister specialising in industrial relations law, based in Old Square Chambers, London. He is President of the International Centre for Trade Union Rights (ICTUR) and a Vice President of the Campaign for Trade Union Freedom.