Trade Unions in a Neoliberal World

British Trade Unions under New Labour

Gary Daniels, John McIlroy

• Publisher: Routledge
• Year: 2008
• ISBN:
  9781134091737
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Trade Unions in a Neoliberal World is the first book to provide readers with an authoritative and comprehensive assessment of the impact of New Labour governments on employment relations and trade unions. This innovative text locates changes in industrial politics since the 1990s in the development of globalization and the worldwide emergence of neoliberalism. The advent of Tony Blair's government in 1997 promised a new dawn for employment relations. In this rigorous but readable volume, a team of experienced and respected contributors explain in detail how the story has unfolded.

This book looks at all aspects of New Labour's policies in relation to employment relations and trade unionism. The first half of Trade Unions in a Neoliberal World presents an overview of industrial politics, the evolution of New Labour and an anatomy of contemporary trade unionism. It discusses relations between the Labour Party and the unions and the response of trade unionists to political and economic change. The second part contains chapters on legislation, partnership, organizing, training, strikes and perspectives on Europe.

Part I
Trade unions under New Labour

1
A brief history of British trade unions and neoliberalism: From the earliest days to the birth of New Labour

John McIlroy

The history of British trade unionism demonstrates that its fortunes are bound up with a variety of interacting factors. Union strength, levels of membership, ability to mobilize and bargaining power, reflects the positions the state takes on employment relations; the attitude of employers and managers; the operation of the economic cycle, particularly the level of employment and the rate of inflation; the composition of the labour force and the structure of employment – historically some groups of workers have demonstrated greater propensity to organize than others, while size of enterprise and concentration of labour have proved relevant. Union strength is also a function of human agency, the quality of leadership at all levels, from head office to workplace, which enables unions to maximize the beneficial aspects of their environment and minimize its unfavourable features (Undy et al. 1981; Bain and Price 1983; Kelly 1998:24–65).

The significance of the state and the strategies it adopts towards economic change, labour market issues and collectivism increased during the twentieth century. Its role has reflected the politics of its personnel but also wider political developments, trends in the world economy and embedded national traditions (Crouch 1993). The importance of the state in constructing industrial relations systems has been recently rehabilitated (Howell 2005). In the past the British state was restrained and sensitive to the independent development and autonomous cultures of capital and labour. Until relatively recently it was conventional to emphasize the continuity, distinctiveness and resilience of the tradition of voluntarism, collective bargaining and limited state intervention embodied in the system of collective laissez-faire (Hyman 2003:37–8). The endurance and adaptability of the core of voluntarism when British capitalism adopted a regime of Keynesian economic regulation after 1945, despite arguable areas of incompatibility and unquestionable tensions with collective laissez-faire, pays testimony to the truth of this perspective.

Analysing European trade unionism as oscillating between ideal type polarities of market, class and society, Richard Hyman sees British unions as historically marked by the first two corners of the triangle. Prioritizing ‘free’ collective bargaining, industrial autonomy, insulation from legal regulation of collective employment relations, they represented class interests to the state, while accepting in practice the logical inevitability of capitalism. Despite their affiliation to the Labour Party, they treated politics and employment relations as distinctive, circumscribed spheres. There were pervasive tensions between class and market, ‘free’ collective bargaining and political reform, corporate responsibility and sectional assertiveness: ‘occupying the terrain between class and market, British trade unions have traditionally displayed a militant, but sectional and defensive, economism’ (Hyman 2001:68).

The frictions between collective laissez-faire and union autonomy built up throughout the era of Keynesian demand management. Voluntarism was challenged and eroded by limited, largely unsuccessful attempts at quasi-corporatism centred on national understandings between the state, employers and unions about the reform and regulation of collective bargaining which developed from the 1960s and intensified in the following decade (Fox 1985:373–414). The contours, core and culture of the old system remained. The appearance of neoliberalism in the late 1970s, its development in the 1980s and its consolidation after 1997 transformed British industrial relations. Global economic trends and free-market ideologies of capitalist revitalization triumphed over history and national particularities. A new politics of rupture propelled the dismantling of collective laissez-faire and the termination of union autonomy. Joint regulation of the workplace has been eroded, management prerogative has been enhanced and unions have been decisively weakened. The neoliberal counter-revolution has been planned and orchestrated by a state which in the past sustained trade unionism. Today, trade unionists face new challenges and they face them in an intractable environment.

To understand their predicament and the possibilities of transcending it we need to contextualize New Labour governments and assess their nature. We need to explore their ideology, politics and attitude to trade unionism in order to locate New Labour in the development of neoliberalism since the 1970s. There are different views on the extent to which the politics of Tony Blair and Gordon Brown represent a distinctive ‘third way’ or renewal of social democracy or whether they are the sons of Margaret Thatcher (Jenkins 2006) whose political DNA constitutes a variant of neoliberalism. What is clear is that both neoliberalism and New Labour are children of the crisis of Keynesian welfarism and the post-war settlement. This chapter starts by looking at the post-war compromise and the role trade unions played in it before examining the reasons why it disintegrated. It discusses the literature on neoliberalism and the ways in which scholars have understood its emergence. It explores the different phases of neoliberalism and its profound antagonism to trade unionism. It traces the way in which neoliberalism passed from marginal economic and political theories of the relationship between markets and the state, adumbrated in the obscure confines of the Mont Pelerin Society by the Austrian political philosopher Friedrich von Hayek and the American economist Milton Friedman, to an experimental and subsequently dominant politics. This chapter explains how in Britain neoliberalism replaced Keynesianism as a means of revitalizing and re-regulating capitalism. It documents the development of Thatcherism as the pioneering iconoclastic neoliberalism that broke with both Keynesianism and collective laissez-faire in industrial relations and significantly undermined British trade unionism. It concludes by examining how the forward march of neoliberalism culminated in the 1990s with its annexation of the British Labour Party in the age of Tony Blair and Gordon Brown.

Keynesianism and the Golden Age of trade unions

The crisis of Keynesianism characterized by the slowdown in capitalist accumulation, problems of profitability and state expenditure and embedded inflation, provided the opportunity for neoliberalism. But in the post-war period Keynesianism appeared an unsurpassed method of making capitalism work and integrating trade unions in its functioning. The years after 1945 constituted what Eric Hobsbawm (1994:257–86) called ‘The Golden Age’ and witnessed the apogee of British trade unionism. The pioneering Labour governments of 1945–51 pledged themselves to full employment, an extended welfare state, a limited degree of public ownership, planning and fiscal redress of inequality. From 1951–64 their Conservative successors adapted to a circumscribed social democratic consensus. They accepted ‘the mixed economy’, state supervision of the market and government intervention and spending on welfare and defence to manage demand. The leading states were influenced by the failures of capitalism in the interwar years, the emergence of Fascism and Stalinism and the positive experience of collectivism, state planning and collaboration with labour during the war. Underpinned by technological development, American leadership and the strength of the US economy, the Bretton Woods Agreement, which fixed exchange rates, and institutions such as the International Monetary Fund, the state manipulated taxation and public spending to increase or reduce demand as necessary and ensure full employment. The result was sustained economic growth and the relative extension of prosperity to sections of the working class (ibid.; Armstrong et al. 1984:309–50; Marglin and Schor 1990).

There was, however, failure to counteract the endemic short-termism of British capital, its privileging of shareholders and their profits, as well as the debilitating split between finance capital and industrial capital which produced under-investment in industry. Despite ad hoc initiatives centred on incomes policies, there was little attempt to coordinate the labour market or to enhance the coordinating capacity of union leaders (Crouch 2003). Rather, the 1950s and early 1960s represented the high point of collective laissez-faire which remained, in some ways, antagonistic to the ruling ethos of state intervention. Workers, and their purchasing power, were vital to the post-war settlement as consumers and organized workers were important as its facilitators and guardians, although women workers were largely consigned to the home and the new order was based on the male ‘bread-winner’ (Crompton 2006:59). Unions became the fifth estate; their leaders were privileged and consulted by the state. They were recognized as rectifying the inequality of power inherent in the employment relationship and stimulating capital to introduce more efficient organization of work, adopt new technology and generate superior rates of productivity. Higher wages helped maintain demand. Collective bargaining was the preferred method of job regulation and it guaranteed the unions’ role. They remained significantly free of either legal restriction or support. Immunity from common law, granted to union organization and industrial action by the 1906 Trade Disputes Act, endured. The disabilities introduced by the 1927 Trade Disputes and Trade Unions Act and wartime legislation were repealed in 1946 and 1951 respectively. Judicial hostility was muted (Flanders and Clegg 1954; Flanders 1960; Wedderburn 1965).

For union leaders, mediating between the state and their members, Keynesianism represented the best means of organizing capitalism that capitalists had as yet invented. For trade unionis...

Table of contents

• Routledge Research in Employment Relations
• Contents
• Figures
• Tables
• List of Contributors
• Abbreviations
• Preface and Acknowledgements
• Introduction: Trade unions in a neoliberal world
• Part I Trade unions under New Labour
• Part II Issues
• Index