Labour is becoming a Nineties tribute act

In 1997 Labour came to power during what many described as an economic boom. Without having to do much except keep their hands firmly on the tiller, the cash available to the exchequer grew. The new government had money to spend and Labour chose to accept the structural economic changes of the 1980s. Helped by “third way” thinking, Labour tinkered with economic reform rather than focusing on delivering it.

Fast-forward 25 years and we are in a very different place. The result of maintaining the deregulation agenda has led to crisis upon crisis, with working people paying the price.

First, we had the financial collapse, where taxpayers bailed out billion-dollar corporations only to be thanked with stagnating wages. Now we have a cost of living crisis where the same banks profit while many workers merely exist rather than live.

Whatever anyone thinks of the choices made back then, and the consequences, one critical thing now makes a repeat of this all but impossible. The need to raise capital. Refusing to tax wealth, never mind taxing excess profits year-on-year, and the lack of a coherent industrial plan, are all severely limiting Labour’s options.

Cash is still king

The fact is, adopting the “hands-free” approach won’t deliver the goods. Unlike 1997 the light touch will not produce a magic money tree. The conditions are just not there and whatever anyone says, in the change business, cash is still king.

To that end our politicians like to bang on about growth, and particularly “high growth”, as the answer to all ills. It’s as if they think that by shutting their eyes and believing it hard enough, it will come true. But not since the 1970s have we seen economic output grow to the levels needed to make a real dent in fixing our broken nations. Certainly, without the need for genuine structural reform.

Changes to planning laws and “partnering” or, more accurately, giving free money to corporations without any enforceable commitments in return, will not move the dial. Nor will an undersized and diminished Green New Deal. The truth is, that without a real economy reboot, talk of “high growth” is for the birds.

For it to move beyond chatter, any government would have to tackle the state of our crumbling infrastructure. An issue that the Unite union has long believed needs to be prioritised. This would include addressing the fact that market incentives simply do not work in many areas. Particularly when managing critical assets such as the National Grid or our sewage systems. Firms have too often monopolised, creating the very opposite of competition, becoming cartels that act purely as hoovers for money extraction and creators of investment deserts. A “growth led” government of any colour would also need to deal with the damaging energy costs that are bad for industry and communities alike.

It is clear that in 2023 serious intervention underpinned by a strategic plan would be required to raise production and value. This would need a greater degree of public control over critical sectors, such as energy, that underpin our economy. In turn this would put the issue of public ownership firmly on the table, where we believe it must be.

But this logic only makes sense if you are serious about changing society.

So, if Labour is intent on becoming a Nineties tribute act in an age where laissez faire does not belong, big questions will remain unanswered. Where will the money come from? What are we going to be left with? If it ends up being austerity by another name plus the hyping of comparatively small-scale investment, it won’t be an enticing prospect. Better than the other lot? For sure. But a government to lead Britain out of decline and make it work for everyday people? Probably not.

Tools in the box

That being said, there are still important but rarely discussed tools in the box, which could help deliver at least some of the good stuff without wads of government cash or state control.

Public procurement is one. We could easily do what President Biden has done and include sectors such as steel within our critical national infrastructure — a long overdue development considering the multiplier effect that steel has across the economy. This would allow us to take advantage of World Trade Organisation rules to make sure that taxpayers’ money was spent on supporting the jobs of fellow taxpayers. Social procurement can be delivered in a straightforward manner — helpfully, Unite even has the wording drawn up by lawyers and ready to go.

Another is collective bargaining, the tried and tested method of delivering more equal distribution. Negotiation with your employer, rather than imposition from above, leads to better deals for working people. The type that anyone can touch and feel. A pay rise. Better terms and conditions. Job security. All issues that if dealt with would hit the mark in living rooms throughout our nations. Unionisation carries a pay premium. That is a simple fact.

Even the Organisation for Economic Co-operation and Development (OECD) tells anyone that cares to listen that collective bargaining is a good thing that delivers practical results, including helping to reduce inequality.

That’s why Labour rowing back on workers’ rights, and particularly the collective right to bargain with your employer, has the potential to be defining. Through its actions Labour is beginning to tell us whose side it is really on.

It was not a question of finance that led to previous plans to allow unions straightforward access to workplaces by request being smeared in red tape at its policy-making forum. Nor was it Conservative fiscal rules that muddied the waters on simplifying the current overly complicated rules around workers’ right to bargain. No, it felt like something that was both far shallower and much deeper than that.

For some it was just the tired old nonsense of wanting the “optics” to be right. The supposed need to court the more reactionary elements of the business community. But for others it seems ideological, even pathological. Bathing in the remnants of an internal faction war that exists more in their heads than in reality.

The truth is British trade unions are among the most highly regulated in the democratic world. British workers have to jump through many farcical hoops to earn even the most basic right to negotiate with their employer. But in the midst of a cost of living crisis when rampant profiteering has been exposed and the nation takes a pay cut, you would think that promoting collective bargaining would be uncontentious. And that even an overly cautious party would understand that empowering workers is an easy way to make at least some practical difference to people’s lives. Even while refusing to rock the boat.

Collective bargaining is a defining issue

So, yes collective bargaining is a defining issue for Labour. And yes, it does tell us a lot about whose side Labour is actually on. If you can’t even create a platform for workers to take their piece of the pie, then what are you for? The unwillingness to reform the economy is another. Out of hand rejection of any form of progressive taxation, strategic public ownership or intervention of any meaningful kind forces us to ask — what does Labour expect to achieve?

There are those who say do nothing, say nothing. It will all work out. Be thankful for what we get. At least they are better than the other lot. But I think it’s time we broke the cycle. Moving from critique to sycophancy is not a good look and it never delivers for working people.

Now is the time for our voice to be heard, not after the election in endless dead-end consultation meetings. It’s now or never for workers faced with AI and imminent decarbonisation. For working people to share in the spoils and avoid the pitfalls, the future will have to be negotiated. That means consigning 1997 to the history books. At the very least, collective bargaining and strategic intervention must be at the heart of what comes next.

By Sharon Graham, Unite general secretary

This comment piece first appeared in the Sunday Times, September 10, 2023