2013 12 – Editorial

The TUC And Industrial Democracy: What Can Be Done?

When Frances O’Grady gave the annual Attlee Lecture earlier this year, she did something that no other General Secretary of the TUC has done in recent years: she stuck her neck out and argued that British trade unions should change their traditional practices and engage in social partnership and  campaign for industrial democracy. In doing this, she raised a subject that the movement has avoided since the fiasco of the rejection of the Bullock Report on Industrial Democracy in 1977 and the beginning of the long decline of trade unionism in Britain since then. Frances O’Grady clearly believes that British trade unionism took a wrong turning after the Second World War in focusing only on wages and conditions, accompanied by an adversarial attitude towards management, whether in the public or private sector. Management is management, management is bad everywhere and should be obstructed, even when the taxpayer owns the firm. Trade union involvement in company governance it was argued by the ‘left’, will make workers the patsies of management and will lead to a decline in advocacy of improved pay and conditions. When all else failed, the cry went up: ‘It’s management’s right to manage’. It’s fair to say that this attitude will keep workers in a subordinate position for ever. No revolution will come from opposing management. A slow revolution in the power of the unions and the working class could arise from taking some responsibility for how the economy is run and claiming the power to go with it.

Her stance has met with a deafening silence from the trade union movement. Nothing will happen without persistence and support from a good number of the big unions. Two reports, one advocating trade union involvement in company governance and another on the situation in Europe have been published by the TUC this month, showing that the TUC at least wishes to keep the issue on the agenda.  These reports give the lie to the claim that industrial democracy undermines workers’ rights. Trade unionism in Northern Europe, the region where industrial democracy is most entrenched, is a vigorous advocate for workers’ interests in job security, pay and conditions. In addition,  they also have a say in investment policy, the strategic direction of the firm, vocational education and the funding of pensions. The claim that industrial democracy undermines workers’ interests is a lie and should be exposed as such. The evidence that it is a lie has been around for decades. It is only the continuing ability of some trade unionists to ignore what is going on in Europe that has allowed reactionaries in the movement to get away with this lie.

Naturally O’Grady and her allies have to move cautiously and to set out the case for industrial democracy in a very deadpan manner. However, the weakness of doing this is that it allows the case to be ignored. You can ignore a bad smell in a way that you cannot ignore a loud yell. So it falls to others to make the TUC’s case in a more vigorous way. Officials in unions opposed to industrial democracy and social partnership will be reluctant to come out of the closet and trot out the tired old arguments against industrial democracy that were aired in 1977. Instead as Mark Langhammer points out in this issue, they will try and cripple any  initiatives towards it by refusing to do anything significant to pursue it. This means that the arguments have got to be taken to the opponents of industrial democracy and their position has to be shown as the nonsense that it is. This is going to be a formidable task,  not because their case has anything going for it, but because they are masters of the black arts of misrepresentation and obstruction.

A couple of other points are worth mentioning in order to show that this is not just an issue that concerns a few governance geeks. Control of companies really matters. Lack of control over firms’ strategic direction and investment decisions costs jobs and increases job insecurity. This is happening all the time. While it is happening, better-run companies in Europe are taking advantage of the disarray in the British economy and improving their position. This is particularly true of Germany, where trade unions have a very significant say in the running of companies. Many of these companies are doing very well in the UK. However, although company shareholders and managements can see the advantages of having workers on the board, this does not necessarily mean that they all like it very much. It means compromise with other interests and not getting your own way on everything. Not everyone likes that way of working even though they can see the benefits. For British shareholders and company directors having to share power would seem like a devastating blow – their world would be turned upside down. They are likely to resist any such move ferociously, and even more ferociously were the unions to advocate parity representation on unitary boards or something like the 2x + y formula of Bullock – one third shareholder representation, one third workers and a further third nominated from the first two parties. But the trade unions do need to advocate something like parity representation with shareholders if they are really going to make a difference to the disastrous state of British corporate governance.  This is a real challenge which the movement and the Labour Party has not even begun to comprehend.

The other important issue concerns Europe. Many senior trade unionists like to pretend that Europe does not exist. But it does and what happens there matters to us. But also, what happens or does not happen to us matters to them quite profoundly. As the TUC point out, ‘regulatory competition’ means that firms have some leeway to situate their headquarters in areas other than their operations, exploiting different regulatory environments to weaken the influence of trade unionists. Shareholders who do not like industrial democracy can locate their HQs in countries that have little or no requirement that firms give workers a say in their running – the UK is a very good example of just such a country.  Indeed some firms locate here for just such a reason. By refusing to engage with industrial democracy, the British unions make it easier for firms to exploit such regulations and actually undermine the efforts of their brothers and sisters in other parts of Europe to have a significant say in the running of their companies. British unions, by their inaction, can be seen as a Trojan horse undermining the dominant pattern of trade unionism in Europe.

In 1977 the British trade unions threw away the chance to make something of themselves, their members and even of the British economy.  That period has been shrouded in a nonsensical mythmaking about how the weakness of the labour movement ushered in Thatcherism. The truth is that the strength of the labour movement could have ushered in industrial democracy and social partnership, but a lethal combination of would-be revolutionaries (in the Communist Party, the Trotskyist groups and the ‘left’ of the Labour Party) and conservative trade unionists and Labour politicians scuppered it. They then succeeded in peddling a lie about what had happened and suppressed the story of Bullock. Even Frances O’Grady has not dared to raise the demon of trade union failure in such recent historical times.

This  really can’t go on. Either significant elements in the trade union movement take up the cudgels for industrial democracy or British trade unionism will continue to decline, while at the same time giving succour to those in Europe who would prefer a more ‘Anglo-Saxon’ form of industrial relations, i.e. one in which the workers eventually get stuffed comprehensively.

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