Corbyn Will Re-Introduce Collective Bargaining and End Zero-Hours Contracts

This looks like a piece of very good news. According to Mike, Jeremy Corbyn plans to repeal the laws passed by Blair’s government in 1999 limiting workers’ rights to have a recognised trade union, and end zero-hours contracts.

Corbyn wrote a piece in the Observer stating that he felt the changes were necessary due to the scandals over Sports Direct, Philip Green and BHS, and the Byron Hamburger chain to help immigration officials arrest 35 illegal immigrants, who were working for them.

At the moment, current legislation stipulates that a union wishing to be recognised at a workplace must show that 10 per cent of employees are members, and 50% want them to lead in pay bargaining. If that isn’t the case, then a secret ballot must be held, at which at least 40% of those able to vote do so, and the majority vote in favour of union recognition.

Corbyn, however, wants to introduce a French-style system, in which firms with over 250 members would have to recognise a specific trade union, and bargain with them over pay. He states

“Even Theresa May understands she has to pay lip service to change in the workplace and the boardroom …,” writes Corbyn.

“But the best way to guarantee fair pay is through strengthening unions’ ability to bargain collectively – giving employees the right to organise through a union and negotiate their pay, terms and conditions at work,” he writes.

“That’s why it should be mandatory for all large employers, with over 250 staff, to bargain collectively with recognised trade unions.”

Corbyn also states that he wants all workers to be given specified hours, that are written into their contracts. If an employer wants them to work beyond these hours, they are to specify the length of time and give them a reason. They will also have to give workers additional compensation, similar to an on-call payment, for being willing to work beyond their usual contracted hours, whether the workers in fact do so or not.

Mike is unsure about the wisdom of the reforms on union recognition, and would like comments on this matter from experts on trade union matters and employment law. However, he welcomes the proposal to end zero-hours contracts.

See http://voxpoliticalonline.com/2016/07/31/corbyn-pledges-to-scrap-blair-union-laws-in-favour-of-collective-bargaining-and-an-end-to-zero-hours-contracts/

The decision to end zero-hours contracts is an excellent policy. Guy Standing devotes several pages in his book, A Precariat Charter, to attacking them. They are widely recognised as a highly exploitative and pernicious system of employment for those trapped in them.

Stewart Lansley and Joanna Mack make clear that the assault on collective bargaining and the trade unions was a deliberate policy of Maggie Thatcher, and has resulted in the contraction of wages, high unemployment, and the impoverishment of the working class in their book, Breadline Britain: The Rise of Mass Poverty(London: OneWorld 2015). They write

Deteriorating opportunities are also the direct product of an about-turn in the country’s political economy. At the end of the 1970s, fighting the rising rate of inflation became the number-one economic goal, displacing the former priority given to maintaining full employment. The instruments used – tight monetary and fiscal policies and a strong pound – accelerated long-term de-industrialisation, while triggering mass unemployment. The critical decision in the 1980s to adopt a more aggressive, market-oriented model of capitalism led to the sweeping away of regulations, the favouring of finance over manufacturing, the outsourcing of public sector jobs, relentless pressure on companies to cut labour costs and, critically, an assault on labour’s bargaining power.

Cabinet papers for 1983 reveal that Mrs Thatcher admonished Norman Tebbit for being too timid on trade union reform, telling him we ‘should neglect no opportunity to erode union membership’. In Britain the proportion of the workforce covered by collective bargaining has fallen from around eighty percent in 1979 to below twenty-five percent today (fifteen percent in the case of private sector workers). This is one of the lowest levels of coverage among rich nations, adding to the heavily skewed and economically unhealthy concentration of corporate power. The UK stands at twenty-first place out of twenty-seven countries in the European Union in terms of workplace representation, though parts of the European continent are also seeing more recent falls in the level of coverage, though from a much higher base.

Britain’s much vaunted ‘flexible labour market’, engineered during the 1980s to give business greater freedom to hire and fire, was necessary, it was claimed, to enable domestic firms to compete in an increasingly globalised economy. Such freedom for employers has continued to be championed by subsequent governments. Yet, just as over-restrictive labour laws can be bad news for dynamism, so can under-restrictive laws.

Britain’s low-wage, high-unemployment economy is as much the product of these internal, political forces as of external, economic ones. Indeed, it was later admitted by one of Mrs Thatcher’s top economic advisers that one of the government’s central aims was the taming of labour. ‘The nightmare I sometimes have about this whole experience runs as follows … there may have been people making the actual policy decisions … who never believed for a moment that this was the correct way to bring down inflation. They did, however, see that it would be a very, very good way to raise unemployment.’ This was how Sir Alan Budd, chief economic adviser at the Treasury in the 1980s, summed up – in 1992 – the multilayered assault on inflation and the unions. He continued: ‘And raising unemployment was an extremely desirable way of reducing the strength of the working classes…what was engineered there, in Marxist terms, was a crisis of capitalism which created a reserve army of labour and has allowed the capitalists to make high profits ever since.’ (pp.101-3, emphasis mine).

They further write on page 242

Perhaps the most effective, and radical, measure for boosting the total wage pool at the bottom would be a rebalancing of bargaining power in favour of the workforce. Another would be a more concerted attempt to reduce the significant pay gap between men and women by raising women’s wages. Both measures would raise the share of national income going in pay and would be critical elements of an effective strategy for cutting poverty levels among the workforce.

Far from being a strength, the sustained decline in workforce bargaining power in the UK is an economic and democratic weakness. Because of the ‘wage premium’ associated with collective bargaining, this erosion of labour’s bargaining power has played a big role in wage contraction. Evidence across sixteen rich countries has shown that the higher the level of trade union membership, the lower the degree of inequality. Further, it is likely that the erosion may have encouraged British employers to move down a low-pay and productivity road. By being able to minimise pay and rely on casualised labour, British employers – unlike say their German counterparts – have had few incentives to improve skills and introduce more productive processes.

Phased in over time, such a policy mix – a boost to the minimum wage, a reduction
in the numbers on less than the living wage, wider collective bargaining coverage and lower unemployment – would put the thirty-year long trend of a shrinking wage share into reverse, and make an important contribution to reducing poverty among the low-paid, while taking some of the strain off the benefit system.

Corbyn’s decision to expand and strengthen collective bargaining therefore appears from this to be an excellent measure. It will also doubtless be attacked by the Confederation of British Industry and the right-wing press and Blairites with just about every ounce of abuse they can muster. We’ll hear once more about how this will threaten British businesses with bankruptcy, and how this will lead us all back to the strike-torn 1970s, the Winter of Discontent, and all the old Thatcherite rubbish. The reality is that Britain was no more strike-prone in the 1970s than many other countries, and much less so than America. And the Winter of Discontent was, in the views of at least one historian I’ve read, the response to the system of wage restraint buckling under the weight of political pressure it was not designed to deal with, and which the unions should not have been expected to shoulder.

Of course, the real reason for the rage at the reinstatement of collective bargaining and the ending of zero-hour contracts will be that it attacks the nearly forty years of exploitative Tory employment policies that Maggie introduced. These employment practices have caused real misery, just as Thatcher and the economists she followed, von Hayek and Milton Friedman, intended them to. They should end now.

Philip Green Threatens to Sue Frank Field over Comparison with Maxwell

Here’s one incident of bullying that this time doesn’t come from the embittered remnants of New Labour. Mike also reported that Sir Philip Green, the man, who ran BHS into the ground, now wants to sue Frank Field for comparing him with Robert Maxwell. Maxwell, if you remember, was the media mogul, who stole money from the Mirror Group’s pension fund, leaving the newspaper in a precarious financial position. Maxwell did so illegally. Green, on the other hand, also took massive amounts of money from BHS, including its pension fund, quite legally. The company still collapsed, however. His lawyers, Schillings, who specialise in libel actions, claim that Field’s comments are defamatory. Field, on his part, has made it clear that he is not going to apologise, and described Green’s attack as displacement therapy.

See Mike’s article: http://voxpoliticalonline.com/2016/07/25/green-demands-apology-from-field-over-comparison-to-robert-maxwell/

Schillings, and the other overpaid firms of solicitors specialising in this area of the law, Carter-Ruck, are regularly in the pages of Private Eye for the way they sue and bully the weak on behalf of the rich, powerful and corrupt. Carter-Ruck have been in the magazine’s pages so often, that they’ve acquired a nickname: Carter-F*ck. In fact it seems to me that the comparison between Maxwell and Green is entirely appropriate, as their personal greed did imperil their companies. Maxwell plunged the Mirror Group into a financial crisis, and Green’s own cupidity has effectively destroyed BHS. Even the question of legality, which is the chief difference between the two cases, does not seem to me to be as clear cut as Green would like everyone to believe. I’m sure that Green did act perfectly legally. But although Robert Maxwell acted illegally, I think that his plundering of the Mirror’s pension fund was enabled by a piece of legislation Margaret Thatcher had passed. This allowed businessmen to include pension schemes as part of their companies’ assets. This, it appears to me, encouraged Maxwell and some others like him, who are less notorious, to rob these accounts under the attitude that they were just another source of money.

Anyway, I think that the parallels between Maxwell and Green are so close, that the only correct response is Arkell Vs Pressdram, as Private Eye would say.

A Fabian Pamphlet for Workers’ Management: Part Three

I’ve just put up two pieces, Parts 1 and 2, of this post, on a pamphlet I picked up years ago when I was a member of the Fabian Society. As I wrote in the first part of this essay, it was written by a ‘Guild Socialist’ – a British form of Syndicalism – to a shop steward, urging him to chose the most responsible and capable personnel to set on the shop stewards committees that had been set up in many factories in order to aid the war effort. The Guild Socialist believed that this would show management and employees that such councils, rather than being trouble-makers, were serious, capable partners in industry. Such an approach would immensely help workers’ demands for a greater share in industry.

Workers’ control is still a radical idea, but such a system of factory councils exist in Germany, Austria and Sweden. There was a similar system of workers’ control in Communist Yugoslavia. The shop steward’s committees mentioned in the pamphlets were councils set up to manage industrial disputes in the war time industries. Workers were forbidden to strike, but were given a place in management. These councils were largely dismantled after the war, as it was felt they placed too great restrictions on the unions’ ability to bargain. The councils did survive, however, in the Whitley Councils, that had been set up during the First World War in the Civil Service. I think these have since been dismantled under the Tories.

I put up the pieces from this pamphlet, not just because I agree with the general principle that workers’ should have a role in industrial management, but also to make a point about the value of trade unions themselves. Mike earlier this week put up a long piece on how workers have benefited from trade unions, after he was told by a woman when he went canvassing at the weekend that she wouldn’t vote Labour ‘after what the unions did to us’.

This clearly is a reference to 1979 Winter of Discontent, to which the Tories continually refer ad nauseam to justify their attacks on the unions. I’ve already put up a piece from one of the history books stating that Britain in the ’60s and ’70s was not unusually strike prone, and that most of the strikes in Britain were carried out according to the law, often with very good reasons behind them. And this pamphlet shows that even the radical wing of British trade unionism in the 1940s – that section that wanted a quasi-syndicalist reconstruction of society – did not do so out of a desire to cause mischief or deliberate disruption. Rather, they believed in efficiency, and that the workers on the shop floor quite often knew more about what was needed than a management, content solely on the maximisation of its own profits.

And, quite honestly, ‘Guild Socialist’ has a point. BHS collapsed, throwing 11,000 people out of work, because its chairman, Philip Green, starved it of investment. He did very well out of it, however. He may have left the company with a black hole in its pension fund of over half a billion pounds, but his ill-gotten gains was nicely stored in an offshore tax haven. Plus he got to buy a £400 million + yacht.

And this hasn’t been the only case of such flagrant mismanagement.

There have been a number of studies which show that the best run companies are unionised. This reinforces the point, repeated again and again in the Guild Socialist pamphlet, urging responsibility and competence. But Thatcher, Cameron and the rest of their cronies in big business aren’t interested in competence. Only in profiteering and impoverishing and exploiting the workforce. And they’re wrecking British industry to do it.

Vox Political On the Bitter Injustice of the BHS Collapse and Philip Green’s Third Yacht

Mike over at Vox Political has also put up a piece about the most bitter part of the collapse of BHS: its chairman, Philip Green, was a serial tax avoider, who took £400 million out of the company. He bought himself yet another yacht, to add to the two he owned already. The company collapsed, throwing 11,000 people out of their jobs, and with £571 million black hole in its pension funds.

Mike urges its employees who voted Tory to take a long, hard look at what this says about the treatment of employees under David Cameron. It says that corporate bosses can get away with keeping their wealth, while their workers get nothing.

The bitterest part of the BHS collapse: Philip Green’s third yacht

This isn’t the first company that’s collapsed through lack of investment thanks to free trade economics. There have been others, and the economic thinking behind it is the first target in Han-Joon Chang’s 23 Things They Don’t Tell You About Capitalism.

The Russian Anarchist, Peter Kropotkin, also had a few choice things to say about the businessmen of his time, who deliberately limited production to keep the profits from their products high, which is similar to Green starving his company of funds for his own enrichment. In his essay, ‘Anarchist Communism: Its Basis and Principles’, Kropotkin wrote:

But the figures just mentioned, while showing the real increase of production, give only a faint idea of what our production might be under a more reasonable economical organisation. We know well that the owners of capital, while trying to produce more wares with fewer ‘hands’, are continually endeavouring at the same time to limit the production, in order to sell at higher prices. When the profits of a concern are going down, the owner of the capital limits the production, or totally suspends it, and prefers to engage his capital in foreign loans or shares in Patagonian gold-mines. Just now there are plenty of pitmen in England who ask for nothing better than to be permitted to extract coal and supply with cheap fuel the households where children are shivering before empty chimneys. There are thousands of weavers who ask for nothing better than to weave stuffs in order to replace the ragged dress of the poor with decent clothing. And so in all branches of industry. How can we talk about a want of means of subsistence when thousands of factories lie idle in Great Britain alone; and when there are, just now, thousands and thousands of unemployed in London alone; thousands of men who would consider themselves happy if they were permitted to transform (under the guidance of experienced agriculturists) the clay of Middlesex into a rich soil, and to cover with cornfields and orchards the acres of meadow land which now yields only a few pounds’ worth of hay? But they are prevented from doing so by the owners of the land, or the weaving factory, and of the coal-mine, because capital finds it more advantageous to supply the Khedive with harems and the Russian Government with ‘strategic railways’ and Krupp guns. Of course the maintenance of harems pays: it gives 10 or 15 per cent on the capital, while the extraction of coal does not pay – that is, it brings 3 or 5 per cent – and that is a sufficient reason for limiting the production and permitting would-be economists to indulge in reproaches to the working classes as to their too rapid multiplication! (Peter Kropotkin, ‘Anarchist Communism’, in Nicolas Walter, ed., Anarchism & Anarchist Communism (London: Freedom Press 1987) 34-5).

Kropotkin was appropriated by Cameron’s ideological mentor, Philip Blonde, in his book, Red Tory. It’s not hard to see why. Kropotkin as an Anarchist favoured the elimination of government, and was impressed by the achievements of private organisations, such as the Lifeboats and the international postage and railway systems, which lay outside of an overarching regulatory body. But Kropotkin was also a communist and a bitter critic of the poverty created by modern industrial capitalism. Blonde used his anarchist ideas to provide some kind of left-ish underpinning to Cameron’s idea of the ‘Big Society’. The latter was really only flimsy disguise for traditional Tory privatisation and laissez-faire capitalism. Whatever you think of his anarchism, Kropotkin deserves better.