Inclusive Society

Lord Hendy Excerpts

Wednesday 14th April 2021 Grand Committee

[Lord Hendy (Lab) [V]]

My Lords, I thank my noble friend Lady Lister for initiating this debate and for her powerful, comprehensive speech in opening it.

I want to emphasise one essential dimension of an inclusive society: democratic participation. Democracy is not limited to general and local elections. An inclusive society requires democracy in every important sphere of human activity. In the 1970s, there was much debate about industrial democracy. Members of the House as old as I am will recall the 1977 Bullock report proposing the representation of workers on company boards. The principle received widespread support, but there was no consensus as to the best blueprint. This was at a time when the working terms and conditions of 86% of British workers were determined by collective agreement, a percentage that has been consistent since the middle of the Second World War.

Since the 1980s, legislation and government policies have led to a collapse in collective bargaining coverage to less than 25% today. Within that figure, pay has been excluded from collective bargaining in large swathes of the public sector, where collective bargaining coverage is highest. The figure of 25% is one of the lowest percentages in Europe; in fact, a recent draft EU directive for a minimum wage takes particular aim at the few countries where collective bargaining has fallen below 70% of the workforce.

Industrial democracy in this country amounts to this: three-quarters of the UK’s 32 million workers have no say whatever over the terms and conditions of their working lives. They are forced to agree whatever their employers unilaterally determine, on a take-it-or-leave-it basis. The current economic crisis has exacerbated this with “fire and rehire”, where employers dismiss their workforce and offer re-engagement on significantly reduced terms and conditions. One in 10 workers has been subjected to this, even where there is nominally collective bargaining.

Research has shown that one consequence of the suppression of a collective worker voice is a rise in the levels of inequality, about which so many have spoken this afternoon. Now, we need to heed the advice of the OECD in successive annual employment outlook reports and fulfil our commitments to the ILO. We must reintroduce sector-wide collective bargaining arrangements, as we did after the First World War with the Whitley committees and again with the wage councils, which blossomed after the depression of the 1930s.

In the EU-UK Trade and Cooperation Agreement, the Government undertook to promote social dialogue at work, although they reject the TUC’s call for a national recovery council. They must now act on that undertaking. Without sectoral collective bargaining, there can be no industrial democracy and no inclusive society, and the crisis now upon us will become a social catastrophe with unpredictable consequences.