From the TUC

Unions must be at the heart of industrial strategy

03 Mar 2017, by in Economics

Two bits of news caught my eye today. The first was new figures showing the number of workers on zero hour contacts has hit an all time high – with over 900,000 people now working on contracts which leave them wondering how much they will be earning from day to day, week to week.

This is worrying in and of itself, but it also has a broader significance. For every worker on a zero hours contract we know there are others on short hours contracts, temporary contracts, casual work or stuck in low-paid self-employment.

Today’s figures confirm the TUC’s analysis that the UK economy just isn’t creating enough good quality jobs – jobs that provide real security and a decent income. That’s a problem for those workers trapped in precarious jobs, but its also a problem for the UK economy as a whole, costing the Exchequer – indeed, costing us all – some £4bn a year in reduced tax receipts, tax credits and in-work benefits.

The second was a BEIS Select Committee report assessing the government’s efforts to date, in delivering its industrial strategy. Like the TUC, the select committee is clear that taken at face value the government’s policy intentions are sound. The TUC has long-called for the UK to have a clear, consistent, properly funded industrial strategy – one which prioritises good quality employment and inclusive growth.

That’s doesn’t mean a return to the 1970’s and Neddy or ‘picking winners’ (though both have far more merit than policy-makers often give them), but it does mean acknowledging that the primacy of the market, and the belief that government can somehow only get in the way, are precisely why the UK economy fares so badly when it comes to productivity, skills utilisation, investment in research and development and a whole range of other indicators.

Indeed, one of the reasons why the UK economy is so afflicted by precarious employment is because successive governments have either wilfully ignored the need for a coherent industrial strategy, or have failed to drive home their aspirations on a scale sufficient to have a real impact. That risk – that policy aspirations are not matched by sufficiently bold government action – is clearly identified in the Select Committee report.

I took part in one of the roundtables the Select Committee convened to inform its report, and was struck by the growing consensus (with one or two exceptions) expressed in the report – that the government was absolutely right to put industrial strategy at the heart of efforts to build a balanced, sustainable and fair economy.

Likewise, while there were different views expressed around the table about how the strategy should be delivered (the TUC is less sceptical about the value of sectoral approaches than the Select Committee for example), what is clear is that we will need interventions both ‘horizontally’ – across sectors on issues such as skills, infrastructure investments and support for R&D; and sectorally – building on the successes we’ve seen in sectors like automotive and aerospace.

The report also makes a strong case for industrial strategy to be driven by ambitious ‘missions’ – for example, ‘decarbonising our energy intensive industries’ or ‘maximising the country’s opportunities arising from the fourth industrial revolution’ – that can galvanise the efforts of employers, unions, politicians, policy makers and others.

That sense of a national ‘mission’ is reinforced by what I think is one of the Select Committee’s key recommendations – that the government’s industrial strategy must set out strong mechanisms for engaging not just business but unions as well. This recommendation is based on these of the evidence the Select Committee heard about ‘constructive, collaborative working relationships between business and unions’ in the UK, and the evidence the Committee drew from Sweden where unions have long been at the heart of industrial strategy.

And it chimes with the broader points the TUC has been making about the value of unions and worker representation – through collective bargaining, through worker representation on company boards, and at a sectoral level. Strengthening worker voice is not just good for workers; it’s also good for the organisations that employ them and UK PLC.