Attacking trade unions costs the country billions

New research shows that restoring union density to the levels seen in the early 1980s would add up to £27.2bn to current UK GDP


The Trade Union Bill is back in Westminster, threatening the right to strike. But in Brighton new research is being launched that reveals that attacks like this have cost the country dearly, and that stronger trade unions would boost the UK economy by £27.2bn.

There’s every reason to oppose this bill and its proposals on high voting thresholds, picketing, facilities time and political funds. It represents an intrusion by the state into the freedom of association and assembly, jeopardising the UK’s historical support of peaceful protest and making it harder for working people to speak as one voice in the political arena.

The proposals are unfit for purpose and poorly evidenced – so say the Regulatory Policy Committee, an independent body appointed by the government to verify the costs and savings to businesses and civil society.

This bill would burden employers with extra red tape and agency worker costs estimated at between £11.5m to £18.3m a year. But these figures are just the husky on the tip of the iceberg when it is put in the context of the billions the country loses when unions are weakened.

The UK has paid a heavy economic price for years of labour market deregulation and anti-union policies. At a Unions21 meeting at TUC Congress today, research from the New Economics Foundation (NEF) and the University of Greenwich for the first time puts a figure on that loss.

The key findings of the report are that for nearly all European countries, including the UK, growth is ‘wage-led’. It is wages, not profits that drive growth. If pay packets are restricted, spending can slow and demand slump. For every 1 per cent reduction in the share of national income going to wages, UK national income – measured by GDP – is reduced by 0.13 per cent.

Trade unions play a critical role in negotiating what portion of national income goes to wages. But the reduced ability of the workforce to negotiate collectively on wage levels is a major cause of this decline. Restoring union density to the levels seen in the early 1980s would add up to £27.2bn to current UK GDP.

Imagine that this Trade Union Bill was replaced by one that instead restored national pay bargaining and gave trade unions the right to access workplaces to recruit and organise. These were two of the measures put forward by Jeremy Corbyn to Unions21 during the leadership campaign when he described unions as ‘the most effective force for equality in our society’. In fact all the candidates put forward a range of credible policy prescriptions that would strengthen unions.

Not only can MPs make the case today that unions make our economy fairer, but also that they help it to grow. And not only can they draw on the new research we’re launching but the wealth of research on the increase in training, safety and productivity unions can help deliver.

With a new Labour Party leader it is time for a new narrative on the contribution of unions to the economy and to remake the case for collective bargaining and employee voice.

Dan Whittle is the director of Unions21

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