Printer Friendly

New Labour, the new unions and the new labour market.

THE relationship between the British Labour Party and its affiliated trade unions has always been a testing one. In an earlier analysis in this journal, I argued that the historical connection of the unions with the party provided benefits to each of them.[1] The party obtained the finance to maintain its political organisation, whilst the unions had a political lobby to protect their wage-bargaining role. I went on to suggest, however, that despite their common roots, the two wings of the `Labour Alliance' or `Labour Movement' were becoming increasingly divergent, with their own institutional interests. Indeed, the aspirations of party and unions only converged either when the Conservatives were in office or, with Labour in power, when economic factors threatened union security. I concluded, on the basis of their complementary organisational interests, that as they were then organised, contemporary trade unionism and reformist parliamentary politics were institutionally incompatible. The Labour Alliance was formally a reality but its unity was a myth.

The purpose of this article is to reassess the changing nature of the `Labour Alliance', taking account of the fundamental changes which have taken place in British politics and industrial relations since the late 1970s. It does so in the light not only of my previous analysis but also of more recent ones, such as that of Keith Alderman and Neil Carter. They argue that the link between the trade unions and the Labour Party is weakening, and that Labour's financial dependency on the unions might well be broken as a result of legislation on how union subscriptions are collected rather than by internal reform.[2] The reappraisal of the party-union relationship offered here examines three interconnected issues: the emergence of the `New Labour' Party led by Tony Blair and Labour's many years in parliamentary opposition; the weakening of trade unions as wage-bargaining agencies; and the growth of a deregulated labour market in Britain within a globalised economy. The links between these issues are explored and the traditional concept of the Labour Movement is re-examined.

New Labour

The Labour Party, born out of the Labour Representation Committee in 1906, remains a federal political organisation. Its constituent elements in 1996 are the Parliamentary Labour Party (PLP) and Euro-MPs (MEPs), some 500 Constituency Labour Parties (CLPs), 27 affiliated unions and 14 socialist societies. But `New Labour' led by Tony Blair in 1996 is quite a different party from that of `Old Labour' led by Neil Kinnock between 1983-92. It incorporates a new leadership, a new balance of internal power, a new political agenda and a new set of ideas, with the overarching aims of winning public confidence and elections.

Although, the conception of New Labour took place during the period 1987-92, a direct consequence of a third election defeat in 1987, its origins can be traced to the 1981 split in the party, when the `Gang of Four' broke away to form the Social Democratic Party. Although very few Labour MPs or activists defected, many who remained identified with social democratic ideas. Slowly but surely, the party shifted rightwards, modified its values and began to modernise its organisation. New Labour has emerged essentially out of successive, incremental reforms initiated by modernisers within the party, drawn predominantly from the centre-right and right of the PLP and the trade union right. Although traditionalists on the centre-left and left of the PLP, CLPs and trade unions have generally resisted these reforms, they have been forced to accept them once the changes have been democratically legitimized within the party.

The concept and philosophy of New Labour were set down in an article, written for The Guardian in June 1987, by the then relatively junior Labour MP, Tony Blair, who had first been elected to the House of Commons in 1983. The key statement was that the party needed to rethink attitudes to society and its institutions, arguing that `whether it is education, or public ownership, or housing, it is not our values that are open to doubt... It is the effectiveness that is in question.' He saw Labour's task as expressing those values through new policies in which the country could believe. `To succeed,' he wrote, `we must have not just the appearance but the reality of being modern.' In his view: `It is the Tories who say you have to choose between efficiency and social justice, that you can only have one at the expense of the other. It is Labour's historic task to show that the two, in fact, are essential partners.'[3] As a modern party, in short, Labour needed to have both image and substance. And, according to the chroniclers of New Labour, its `ideology, policies, membership and organisation all had to be transformed to give it the essential modern thrust it needs to be an effective governing party'.[4]

Peter Mandelson MP and Roger Liddle, who could be variously described as the `midwives', `spindoctors' or `Svengalis' of the modernised party, claim that giving renewed expression to the party's founding beliefs is a deliberate move away from both the Old Labour Party of Wilson and Callaghan and the radical Conservativism of Thatcher and Major. For them, modernisation means more than just developing a package of attractive propositions that can win elections. `It is about working through a credible strategy for successful government that avoids the failures of the past.'[5]

Mandelson and Liddle claim that there are seven main differences between Old and New Labour on key issues. These relate to the private sector, incentives, public ownership, public expenditure, the role of the state, Europe and the unions, as outlined in Table 1. This elementary dichotomy between Old and New Labour, however, oversimplifies the complex internal politics and ideological cleavages amongst different groupings in the party. Dunleavy's model of `horizontal' and `vertical' cleavages is a much more effective tool for analysing its basic tensions.[6] He identifies a horizontal cleavage between its public ownership and mixed economy wings and a vertical one between the industrial (trade union) and welfare state wings. These give rise to four main coalition groupings which have fought for power within the party during the postwar period: the `union (hard) left'; the `welfare-state (soft) left'; the `Fabian right'; and the `union right'. Recently, however, fearing that CLP activists are more extreme in their political views than are Labour voters, the party leadership has increasingly depended upon the Fabian right and union right for support in party elections, in reforming its policy and in modernising its organisation, thus reinforcing the right-ward shift since the late 1980s.
1. Claimed Differences Between New Labour and Old Labour on Key

                       Old Labour               New Labour
Private Sector      Supported indicative,  Accepts free, dynamic
                    centralised planning    markets
Incentives          Supported high taxes   Believes incentives
                    on high incomes        necessary for risk taking
Public Ownership    Supported public       Believes social
                    ownership to manage    objectives can be met
                    the economy            through proper regulation
Public Expenditure  Equated high public    Recognises the importance
                    spending with more     of how public money is
                    equality               spent, not just how much
Role of the State   Believed in statist    Aims to help people
                    solutions to people's  achieve things for
                    problems               themselves
Europe              Was divided on Europe  Wants to participate in
Trade unions        Supported corporatist  Supports `stake-holder'
                    concept of politics,   concept of the economy,
                    legitimized union      seeks to involve
                    block vote in party    individual trade
                    affairs                unionists in party

Party reform began during Neil Kinnock's lengthy leadership, even though he was elected on a left-of-centre political platform, counterbalanced with the right-of-centre Roy Hattersley as Deputy Leader. Following the party's electoral defeats in 1983 and 1987, he moved steadily to the right and, building up broad-based support, began the slow process of modernisation. Kinnock was instrumental in expelling Militant, marginalising the left and, after 1987, initiating a comprehensive policy review.

Modernisation was timidly taken a stage further during John Smith's brief leadership 1992-94, following Kinnock's resignation after the 1992 election defeat. The initial issue facing him was the unions' role in selecting the Leader and Deputy Leader; the second was the unions' block vote at Annual Conference; and the third was the campaign for `One-Member-One-Vote' (OMOV) in the selection and reselection of parliamentary candidates. The first matter was resolved by reducing union representation in the party's electoral college from 40% to 33%, requiring union ballots for candidates on a `one-person-one-vote' basis and aggregating votes to produce a national total for each leadership candidate. The block vote issue was eventually determined by dividing voting entitlements of the unions and CLPs at Conference amongst their delegates. Now, individual delegates in each union have an equal share of the affiliated vote, CLPs have delegates in proportion to their membership and each delegate votes separately. It was further decided that once individual party membership exceeded 300,000, the union share of the Conference vote would be reduced until it reached parity with the CLPs. The OMOV issue was not resolved until the 1993 Conference, and only after John Smith had put his leadership on the line and John Prescott had made a rousing speech in support. The outcome, after considerable resistance by the unions, was the introduction of OMOV for individual members in the CLPs and a `levy plus' system for political levy payers in affiliated unions. They can now join the party at a reduced rate, thus entitling them to vote for parliamentary candidates on the same basis as CLP members.

Reform accelerated significantly under Tony Blair, after the sudden death of John Smith in 1994. The young leader, the first elected under the new rules, obtained 57% of the overall vote--61% of MPs and MEPs, 58% of individual membership and 52% of union levy payers.[7] Within days, he asserted a dynamic leadership style and committed himself to shedding Labour's `tax and spend' image, boosting individual membership and installing key modernisers at Labour headquarters. Subsequently, three issues dominated the Blair agenda: rewriting Clause IV of the party Constitution, shifting its policy further to the centre, and continuing to reduce union power within the party.

Tony Blair's announcement in his first speech as Leader at the 1994 Conference that he wanted to see reform of Labour's Constitution, especially commitment to the `common ownership of the means of production, distribution and exchange', came as a bombshell to many delegates. In an impassioned speech, he said: `I believe it's time that we had an up-to-date statement of the objects and objectives of our party ... Let it then be open to debate within the party ... And if this statement is accepted then let it take its place within our constitution for the next century ... This is a modern party living in an age of change. It requires a modern constitution that says what we are in terms that the public cannot misunderstand and the Tories cannot misrepresent.' In the shadow of the Conference slogan--`New Labour, New Britain'--Blair set out his vision for `our party and our country', with change as a central theme. He talked about a self interest which demands that people work together to achieve what they cannot achieve on their own; a belief in society and working together in solidarity and cooperation with one another; a society of opportunity for all; and a new politics of honesty, truth and trust. In his view, it would not be done by state control or by market dogma but by a dynamic market economy, based on partnership between government and industry, employer and employee and private and public sectors. Change, he said, must be built around an economy in which everyone has a stake and this called for a new politics, without dogma. `We have changed', he argued; `parties which do not change die and this party is not a historical monument.'[8]

Despite a resolution supporting Clause IV, Tony Blair and his supporters immediately went about mobilising support for the proposed change. The rewriting of Clause IV was indispensable to his agenda. In spite of substantial resistance amongst union leaders, he won the campaign. It was revealed at the Special Constitutional Conference in April 1995 that three-quarters of CLPs had held membership ballots, and 467 of these 470 had voted for change. The revised Clause 4 of New Labour sets out four principles upon which the party `seeks the trust of the people to govern'. The first declares that the Labour Party is a democratic socialist party, seeking to use people's common endeavour to create a community in which power, wealth and opportunity are in the hands of the many not the few, where the rights people enjoy reflect the duties they owe, and where people live together, freely, in a spirit of solidarity, tolerance and respect. The second states that, to these ends, the party will work for a dynamic economy, a just society, an open democracy and a healthy environment. The third upholds its commitment to the defence and security of the British people and international cooperation with European, Commonwealth and other institutions. The fourth states that Labour will work in pursuit of these aims with trade unions, cooperative societies and other affiliated organisations, but also with consumer groups and other representative bodies.

Ever since his election as Leader, one of Tony Blair's main aims has been the continued reduction of union power in the party, through weakening the block vote and distancing the party from the unions. He said in an interview in September 1995, for example: `Nobody seriously believes in this day and age that the business of the Labour Party is to be the political arm of the trade union movement. They may say it on a platform, but nobody believes it. In government you cannot operate like that. It wouldn't be right anyway.'[9] Thus, for New Labour the key to maintaining good relations between a Labour government and the unions is recognising the unions' wider public role whilst getting them to accept they can not expect special deals from Labour when it is in office.

New Labour's espoused policies on employment issues, however, are relatively progressive and offer a distinctive approach from that of the Conservatives. It plans a fair framework of employment law to redress some of the imbalances apparent in the British labour market in recent years. This includes a statutory minimum wage; widening employee share-ownership; legislation against age discrimination; wider legal protection for disabled people; signing up to the Social Chapter; extending job protection rights to part-time workers; establishing a `university of industry'; investment in training; and, most importantly, guaranteeing union recognition, where a majority of workers want it.

Nevertheless, the unions have not always been at ease with New Labour. As John Edmonds, the politically moderate General Secretary of the GMB union, has written, in challenging the pace of party reform: `permanent revolution is exciting, but also profoundly unsettling'. With Labour changing its traditional thinking, he added, there is a danger of rejecting long-standing principles, such as those relating to the trade unions. During an election campaign, he concluded, we do not want our supporters staying at home, `feeling anxious, disoriented and miserable'.(10)

Further evidence of a weakening of the position of traditionalists and the unions within the party was provided by the National Executive Committee's (NEC) proposal to end union sponsorship of MPs and parliamentary candidates, announced in March 1996. This is to be replaced by a system in which unions may only give financial support to CLPs, not to would-be candidates. Tony Blair went on to announce, also in March 1996, that the party would be directly balloting its 350,00Q individual members to endorse its pre-election manifesto. This document was planned to cover the economy, the welfare state, the British constitution, and Europe, although not taxation and spending pledges. Diane Abbott MP, one of only two members of the NEC who voted against the proposal, was reported as saying: `I am very concerned at drawing up a manifesto that goes to conference which can not be amended, but offered only on a take-it-or-leave-it basis. I can only assume that the idea of a ballot is to undermine the principle of conference sovereignty.'[11] A subsequent meeting between Tony Blair and John Prescott with leaders of the eight largest unions affiliated to the party went some way to allaying these concerns, when it was decided to put the pre-election strategy to a ballot of the entire party membership, including its 4.5 million union trade members. But underlying tensions between the modernising and traditional wings remain.[12]

Those leading New Labour, in short, increasingly see it as a mass political party, moving away from a system of representative or delegate democracy to one of direct or membership democracy, driven by strong leadership from the centre. Supporters of Old Labour, on the other hand, see the move `as nothing to do with democracy and everything to do with political control', and an initiative which could result in the side-lining of `both the unions and the policy process of the Labour Party itself'.[13] New Labour, in summary, in seeking a mandate from the electorate, is trying to occupy the middle ground of the party and of national politics. In its determination to make New Labour an electoral winner, the leadership has decided to appeal widely for votes.

The new unions

In retrospect, the late-1970s represented the peak of `old union' power in postwar Britain. This was illustrated by high levels of union membership in the private and public sectors, deep penetration by the unions into managerial prerogatives in the workplace (through collective bargaining with employers on terms and conditions of employment) and weighty political influence, especially in the period of the so-called `Social Contract' between the TUC and the Callaghan government of 1976-79. Since 1979, however, the unions, like the Labour Party, have been forced to conduct their affairs in quite different circumstances. This shift in the balance of industrial and political power has a number of causes, including relatively high levels of unemployment, a changing British labour market, new styles of personnel management in the workplace, and the Conservative Party's long hegemony in national politics. Because of the slow ebbing of their power in the 1980s and 1990s, the unions have had to accept a new realism in both their industrial and their political roles. They, too, have modernised by adopting a pragmatic `new unionism'. Compared with the `old unions', the `new unions' are willing to collaborate with employers, use alternatives to collective bargaining and strikes to protect their members' employment interests and build wider political links, beyond the Labour Party, such as in Europe.

At the end of 1994, there were 260 listed unions in Britain, with a total of 8.2 million members. Of these, 45 had political funds, with a total of 6.1 million members,[14] though only 27 of them were Labour Party affiliates. As indicated in Table 2, over 4.5 million members (83%) out of some 5.3 million in Labour--affiliated unions paid the political levy and 804,000 (17%) did not. Not all who pay the political levy in Labour-affiliated unions, however, are affiliated to the party. This is because it is the union which decides how many members to affiliate, not individual members, and the more members affiliated the higher the cost to the union. Perhaps the most important figure in Table 2 is the 4.5 million levy-payers in affiliated unions; in 1994 they represented over half (55%) of all union members.
2. Unions Affiliated to the Labour Party, 1994

                                                  Members Paying
                                                  Political Levy

UNISON the Public Service Union                   1,271,000
Transport and General Workers Union                 842,500
General, Municipal and Boilermakers Union (GMB)     725,900
Amalgamated Engineering and Electrical Union        503,500
Union of Shop and Distributive Workers              257,800
Communication Workers Union                         230,100
Manufacturing Science Finance Union                 194,700
Graphical Paper and Media Union                      92,300
Union of Construction Allied Trades and
 Technicians                                         78,800
National Union of Rail Maritime and Transport
 Workers                                             66,900
National Union of Knitwear Footwear and Apparel
 Trades                                              45,800
Fire Brigades Union                                  41,000
Transport Salaried Staffs Association                32,600
Musicians' Union                                     28,400
Bakers Food and Allied Workers                       27,600
12 other affiliated unions                          107,000
Total of 27 affiliated unions                     4,545,800

                                                  Members Not Paying
                                                  Political Levy
UNISON the Public Service Union                    97,700
Transport and General Workers Union                12,200
General, Municipal and Boilermakers Union (GMB)    63,800
Amalgamated Engineering and Electrical Union      106,600
Union of Shop and Distributive Workers             25,000
Communication Workers Union                        32,000
Manufacturing Science Finance Union               287,300
Graphical Paper and Media Union                   133,200
Union of Construction Allied Trades and
 Technicians                                       19,300
National Union of Rail Maritime and Transport
 Workers                                            1,000
National Union of Knitwear Footwear and Apparel
 Trades                                               800
Fire Brigades Union                                13,100
Transport Salaried Staffs Association               4,300
Musicians' Union                                    1,300
Bakers Food and Allied Workers                      7,300
12 other affiliated unions                        804,900
Total of 27 affiliated unions

Source: Certification Officer, Annual Report (1996)

One indicator of the organizational weakness of the new unions is the fact that total union membership, having reached its high point of almost 13.2 million in 1979, fell steadily to just over 8.2 million in 1994, a fall of almost 34%. Yet whilst membership in TUC unions fell from 12.2 million in 1979 to about 6.9 million in 1994--a fall of 43%--membership in relatively small, non-TUC, `professional' unions or staff associations went up by more than 307,000. Collectively these bodies, such as the British Medical Association, Royal College of Nursing and Association of Teachers and Lecturers, increased their membership by 45%.

Growth in membership of these professional unions can be explained in terms of three factors: the expansion effect, where job opportunities increased in the 1980s and early 1990s; the change effect arising from organizational and technological innovation and their impact on jobs; and the political effect or the attraction of these organisations to workers because these are politically-neutral bodies, unaffiliated to either the TUC or the Labour Party.[15] The distinct upward trend in these associations, however, does not mask the general decline in traditional union membership since 1979.

Partly as a result of membership loss, the unions' industrial power has declined enormously since 1979. This is illustrated by the reluctance of employers to recognise unions for collective bargaining purposes; by the demise of the `closed shop'; and by the decline of joint consultation in the workplace.

The latest Workplace Industrial Relations Survey (WIRS) shows, for example, that union recognition--and hence the coverage of collective bargaining--has declined significantly in manufacturing and the private services since 1979. Even the public sector has not been unaffected, with pay determination for nurses and midwives and the professions allied to medicine in the National Health Service (1983), and for school teachers in England and Wales (1987), being transferred to pay review bodies. Recent Labour Force Survey data shows that in 1994 around 48% of employees worked in workplaces where trade unions were recognised. This varied from around 34% in the private sector to some 86% in the public sector, compared with about 60% and over 90%, respectively, in the early 1980s.[16]

Linked with the relative decline of collective bargaining is the demise of the closed shop. A closed shop, or union membership agreement, is any formal or informal arrangement between employers and unions where all employees are normally required to be members of an appropriate union as a condition of employment. As a result of legislation since 1982, closed shops are now legally unenforceable, thus protecting individuals from being dismissed by employers because they are not union members. This has further restricted membership growth and the balance of power with employers. WIRS suggests that only 5% of manual employees were covered by closed shops in 1990, putting the figure for all employees somewhere between 300,000 and 500,000, a dramatic decline since 1984, when the comparable estimate was between 3.5 and 3.7 million.

By the early 1980s, joint consultative committees (JCCs) had become a common feature of British workplace industrial relations in both the private and public sectors, at around a third of all establishments. By 1990, the proportion of establishments with JCCs fell to under 30%, increasing only marginally in the public sector. This is explained by employers substituting more individualised methods of employee involvement in the workplace for joint consultation, especially in the private sector.

The new unions have also had to contend with considerable legal changes since 1979, now largely embodied in the Trade Union and Labour Relations (Consolidation) Act 1992 and Trade Union Reform and Employment Rights Act 1993. These have three main aims: to individualise the employment relationship through weakening union organisation, dissociating members from their union and discouraging union militancy; to depoliticise trade unions; and to deregulate the labour market. Besides making the closed shop unenforceable in law, current trade union legislation: (1) allows employers to induce employees to switch from collective wage contracts to more favourable individual contracts; (2) requires union subscriptions deducted from pay by employers to be authorized by individual employees at least once every three years; (3) provides for extensive union membership rights for individual members; (4) has repealed the statutory union recognition procedures incorporated in the Employment Protection Act 1975; and (5) narrows the legal definition of a trade dispute, whilst requiring industrial action (including strike) ballots by trade unions as well as providing legal remedies for employers where such action is unlawful.[17]

The political weakness of the unions since 1979 is demonstrated by their exclusion from government policy-making. Successive Conservative governments consistently refused to consult with the TUC on macro-policy decisions and abandoned top-level meetings with TUC officials. A series of Green Papers on trade union reform in the 1980s were not used for consultative purposes, as Green Papers were originally intended, but as draft legislation which was enacted virtually in the same form. The only remaining corporatist body, the National Economic Development Council, was wound up in 1991.

The net result of diminished union power has been fundamental change in relations between employers and workers, between unions and their members and in the politics of industrial relations. These include a shift in the balance of power to employers in the workplace; a shift of power within the unions from shop stewards and the workplace to full-time officials and national readerships; and acceptance of the new realities of the employment relationship and of politics by current union leaders such as John Edmonds (GMB), Bill Morris (TGWU), Rodney Bickerstaffe (UNISON) and John Monks (TUC).

The tactical responses of the unions to the challenges facing them have been varied, including: greater willingness to use the law as a regulator of employment relationships--through UK case law and European Union legislation; improving services to individual members; and looking to a Labour government for reforms to employment law and the labour market. Other responses include recruiting part-time workers; using the TUC to facilitate union mergers; internal reorganisation; new bargaining strategies with employers; and, when faced by intransigent managements, finding alternatives to traditional industrial militancy.

The strategic responses of the unions to employer and governmental hostility to union organization and collectivism in the workplace and to their isolation in politics have also been innovative. They have included relaunching the TUC and developing a more broadly based pressure-group role for it; using the media creatively to foster support for union activities; providing, through the TUC, a wider range of education and training services to affiliates; and working with interests outside the TUC to promote specific campaigns. An example of the last is the TUC's proposal for a joint campaign with the Bank of England and CBI to get a national consensus on preparations for possible participation in European monetary union.[18] The unions have also demonstrated greater willingness to network in Europe, individually through sectoral federations and collectively in the European Trades Union Confederation in Brussels.

The new labour market

The nature of the labour market has changed radically in the past two decades. In essence, Britain has shifted away from an `old' regulated labour market, with relatively high employment, high unionisation and secure jobs, to a deregulated one. This `new labour market' is characterised by persistently high unemployment, low unionisation, flexible employment and job insecurity.

A regulated labour market is one in which wages and the ways in which work is organised in the workplace are subject to substantial institutional intervention either through collective bargaining or through the law. In a deregulated labour market, by contrast, intervention is weakened, either by changes in the balance of power or by the absence of a legal framework of rules. In a deregulated labour market, wages are determined by the free interplay of supply and demand between employers and individual workers (who may or may not be employees) and job content is largely determined by management's `right to manage'.

The shift to a new labour market has generally favoured employers and that minority of workers with scarce skills, who are trained, have effective union organization or are employed permanently in large private and public organizations. Skilled workers in `hi-tech', small and medium-sized enterprises have also benefited by labour market deregulation, but not the unskilled. Workers with low skills, little or no training and weak unions, or those working in `low tech', non-union small and medium-sized enterprises have been particularly disadvantaged by the shift towards deregulation.

The underlying, most pervasive change over the past two decades has been the continuously high, persistent and ubiquitous level of unemployment. During the 1960s, unemployment rarely exceeded 300,000 or some 1% to 2% of the total workforce (i.e. employees, the self-employed and those seeking work). By the late 1970s, unemployment had risen steadily to about a million, or some 4% of the workforce. After 1980, it rose even higher, averaging around 8.9% of the workforce between 1978-95, reaching a peak of almost 3.3 million (11.8%) in 1986 and standing at some 2.6 million (9.4%) in 1994.

These substantial increases in unemployment have significantly weakened the bargaining power of unions and individual workers in the new labour market, whilst increasing that of employers and managers. This shift in the balance of power has been reinforced by the step-by-step deregulation of the labour market by successive Conservative governments. Their underlying aim was to assert the primacy of market forces in the determination of terms of employment and to facilitate employment flexibility in both the private and public sectors. Government measures included: (1) raising the minimum qualifying period during which employees can claim unfair dismissal from six months to two years; (2) abolishing wages councils that could determine minimum pay and conditions of work in unorganised industries (e.g. catering, hairdressing and retailing); (3) introducing compulsory competitive tendering, market testing and contractorisation to reduce unit costs in those public services which have not been privatised; (4) removing collective bargaining for some staff in the health service and education; and (5) weakening, through legislation, the unions' ability to organise, bargain and take part in lawful industrial action.

Another factor helping to create a flexible labour market has been economic rationalisation, especially in manufacturing. The number of large industrial plants in Britain has diminished significantly since the late 1970s, while small and medium-sized enterprises and the service economy (based on retailing, leisure and finance) have grown. During the early and late 1980s, there were hugh shake-outs of jobs in manufacturing. New jobs, on the other hand, were often less skilled and mostly in organisations resistant to unionisation and collective bargaining.

Britain's new labour market has a number of features. The main ones are growing casualisation of work; increasing individualisation of employment contracts; widening of income distribution and pay relativities; intensification of work; and increasing marginalisation of unions in the regulation of the employment relationship.

Growth in the casualisation of work is characterised by the increased use of part-time, non-permanent contracts of employment, especially for women, and by subcontracting. Part-time contracts take a variety of forms such as annualised hours, flexible hours, `nil hours' (i.e. workers are only employed when work is available), `term-time only' and job sharing. These developments are reflected in the changing structure of the workforce. Between 1985 and 1995, for example, there was a steady fall in the activity rate of men in employment (88% to 85%) and a rise in the activity rate of women (67% to 71%). Also, the proportion of men in full-time employment fell by over 1.6 million (11%) between 1979 and 1995, whilst that for women increased by 1.3 million (23%). During the same period, the proportion of men in part-time employment increased by 732,000 (625%) and the proportion of women by 1.1 million (33%).

Linked with casualisation is the individualising of employment contracts. Personal contracts incorporate the setting of job objectives for staff, performance related pay and regular staff appraisal. Managers view these arrangements as conducive to improved staff effort, more effective control of the work process and a committed workforce. Individual contracts have been adopted for white-collar (and some manual) jobs in the private sector and for managers in the public services.[19]

It is generally recognised that there has been a significant redistribution of income and widening of pay relativities in Britain since the late 1970s. The increasing gap between those with high and those with low incomes is very much a function of the new labour market, since the largest proportion of household income comes from participation in the workforce. The proportion of people with income below 50% of average income remained steady from 1961 to the early 1980s but has risen since then from less than 10% to 19% in 1993.

Intensification of work has become a common feature of the labour market and is linked with high unemployment and casualisation. It affects all levels of staff--managerial, professional and shopfloor--as well as those on full-time and part-time contracts. Employers appear to favour temporary workers as they work harder, are more compliant and have less absenteeism than permanent staff but they are also are insecure and can suffer stress because of this. Keeping staff working hard on insecure contractual arrangements is a way of gaining greater control over all workers.

Increasing marginalisation of the unions is shown in a number of ways: (1) union problems in recruiting and retaining members; (2) growing propensity of employers not to recognise trade unions; (3) greater willingness of employers to derecognise trade unions; (4) greater disposition of employers to narrow the scope of collective bargaining and weaken joint consultation; and (5) increasing use of individualistic `human resources management' techniques in dealing with employees.

There is, in sum, strong evidence indicating that a new labour market has emerged in Britain since the late 1970s. Compared with the old labour market, it is one which has become more deregulated, more flexible, more individualised and less secure. Will Hutton summarises the situation graphically: `By the mid-1990s it had become clear that Britain had acquired all the worst traits of the deregulated US labour market but it had achieved few of the benefits of that system . . . Only around 40% of the workforce enjoy tenured full-time employment or secure self-employment; another 30% are insecurely self-employed, involuntarily part-time or casual workers; while the bottom 30%, the marginalised, are idle or working for poverty wages.'[20]


The relationship between New Labour and its affiliated `new' unions still remains a formal, constitutional one, with long-standing, historical roots. In practice, however, the constitutional links between Labour and the unions are becoming much looser than they were during the heydays of Old Labour, the old unions and the Social Contract. First, the role of the unions has been diluted in the selection of the Leader and Deputy Leader, by reducing union representation in the electoral college and by introducing union ballots on a one-member-one-vote basis. Second, the union block vote has been removed at the party Conference and union voting powers have been `delegated to delegates'. Also, with party membership now claimed to be over 300,000, the union share of the Conference vote is being reduced towards parity with Constituency Labour Parties. Third, the introduction of OMOV in the selection of parliamentary candidates means that political levy payers in affiliated unions now vote on the same basis as individual party members, not as union delegates. Fourth, the proposal for ending union sponsorship of MPs and parliamentary candidates, replacing this with union financial support to CLPs, will further weaken the unions' role within the party. Fifth, Labour's traditional financial dependence on union affiliation fees is being slowly superseded, due to the party strategy of raising independent financial support from individuals, business leaders and wealthy sponsors, even where these people are not party members.

The identity of political interest between New Labour and the new unions is loosening too. This is largely because New Labour's political constituency is changing. Traditionally, Old Labour depended on the votes of substantial numbers of manual workers in national elections, even though about a third of working-class voters--the `deferential working class'--regularly supported the Conservatives. To gain this electoral support, Old Labour had to offer policies which took account of the political aspirations of many ordinary trade unionists, as well as the economic and industrial relations aspirations of the unions themselves.

New Labour's prime role is fast becoming an election-winning machine and the party is less ideological than Old Labour. Its leaders seek to attract votes from as wide a constituency as possible, including middle-class, southern, non-union voters. Its policies are no longer sectional and this lessens the importance of trade unionists' votes. Further, with union membership falling, the traditional alliance with the unions has less political and less financial significance than in the past.

The immediate concerns of the new unions, after 17 years of New Right politics, are inextricably linked with the emergence of the new labour market. The main issues are the impact of high unemployment, job insecurity and employer power on wages, employee welfare and union organisation. The new unions want to prevent unscrupulous employers exploiting their workers, further membership leakage, and marginalisation of the unions' role in the workplace. For them, the law now has a vital role to play in remedying the imbalance of power between employers and workers. If they are to maintain their distinctive function in industrial relations, the unions want an incoming Labour government to enact new statutory rights for workers and unions. These include a minimum wage; job protection rights; representation for workers who are in dispute with their employers; and union recognition rights. The unions also want to maintain and expand their bargaining role with employers.

What the new unions would also ideally like from a New Labour government, though they are unlikely to get them, are a demand-led expansion of the economy, rises in real public spending, repeal of `antiunion' legislation, and political influence in Downing Street. What they will probably have to settle for is moderate supply-side led economic growth, marginal changes in employment law and a limited lobbying role through the TUC in Downing Street, Whitehall and Brussels.

There is, then, in the mid-1990s, with the Conservatives in office and the unions marginalised industrially and politically, a paradox in the constitutional and political relationship between New Labour and the new unions. The paradox is that with power increasingly centralised within both the party and union readerships, it might be expected that the Labour Alliance would be strengthened, rather than loosened. Indeed, the central weakness of the relationship in the corporatist 1970s was the inability of national union leaders to carry their rank-and-file members with them, not only in renewing the Social Contract with the Labour government in 1978-79 but also in supporting the party electorally in 1979. This is not the case now, since both Party and union readerships are largely in control of their constituencies and New Labour is a politically mainstream party.

The underlying explanation of the `New Labour-new union' paradox is not just contextually related to the dominant political economy of the 1990s. It arises from the long period in which the party has been in parliamentary opposition and the radical transformations in industrial relations and the labour market since the late 1970s. New Labour's leadership desperately wants the Party to be an electoral winner; union leaders urgently want to regain their lost power and a more buoyant labour market. As a result, the party leadership is increasingly dissociating New Labour from the new unions to build up a populist base, whilst union leaders--in the hope of not spoiling New Labour's political image--hold back from open conflicts with the party leadership, even when the unions' position within the party is being weakened. A formal break-up of the party-union alliance is improbable in the short term, since the origins of the traditional Labour Movement are so deep rooted. But the relationship between New Labour and the new unions is likely to continue to loosen, under pressure from the party leadership, the party's growing cross-class appeal, and weakened union power in a transformed labour market.

[1] D. Farnham, `The Labour Alliance: Reality or Myth?', Parliamentary Affairs, Winter 1976.

[2] K. Alderman and N. Carter, `The Labour Party and the Trade Unions: Loosening the Ties?', Parliamentary Affairs, July 1994.

[3] T. Blair quoted in P. Mandelson and R. Liddle, The Blair Revolution. Can Labour Deliver? (Faber and Faber, 1996).

[4] Op. cit., p. 41.

[5] Ibid., p. viii.

[6] P. Dunleavy, `The Political Parties', in P. Dunleavy, A. Gamble, 1. Holiday and G. Peele (eds), Developments in British Politics 4 (Macmillan, 1983).

[7] K. Alderman and N. Carter, `The Labour Pam Leadership and Deputy Leadership Elections in 1994', Parliamentary Affairs, July 1995.

[8] Tony Blair's Speech to the Labour Party Annual Conference, BBC2 recording, October 1994.

[9] S. Baxter, Observer Review, 10 September 1995.

[10] J. Edmonds, The Guardian, 11 August 1995.

[11] P. Wintour and L. Elliot, The Guardian, 28 March 1996.

[12] J. Kampfner, Financial Times, 23 April 1996.

[13] V. Allen, Letter to The Guardian, 2 April 1996.

[14] Certification Officer, Annual Report (HMSO, 1996), p. 62.

[15] D. Farnham and L. Giles, `Trade Unions in the UK: Trends and Counter-trends Since 1979', Employee Relations, 17(2),1995, pp. 20-1.

[16] L. Corcoran, `Trade Union Membership and Recognition: 1994 Labour Force Survey Data', Employment Gazette, May 1995, pp. 191-209.

[17] D. Farnham, Employee Relations (IPM, 1993).

[18] R. Taylor, Financial Times, 1 February 1996.

[19] See D. Farnham and S. Horton, Managing People in the Public Services (Macmillan, 1996).

[20] W. Hutton, The State We're In (Vintage, 1996), pp. 110 and 114.

DAVID FARNHAM, Professor of Employment Relations, Portsmouth Business School, University of Portsmouth.
COPYRIGHT 1996 Oxford University Press
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Farnham, David
Publication:Parliamentary Affairs
Date:Oct 1, 1996
Previous Article:Promiscuous and celibate ministerial styles: policy change, policy networks and British roads policy.
Next Article:Church, state and the Irish Constitution: the secularisation of Irish politics?

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |