Contribution
My Lords, I will speak to Amendment 127 in the name of my noble friend Lord Hendy, but I am conscious that some of my comments may also be relevant to Amendment 125, which I oppose.
According to the latest LFS figures, 6.4 million people hold a union card, making trade unionism by far the largest democratic membership movement in the UK. Many of Britain’s most innovative companies recognise trade unions and the real value that an independent voice for workers adds, including Rolls-Royce, Uber, Virgin Media and EDF Renewables, to name but a few.
We have heard on several occasions how union membership has declined since the 1980s, and no doubt we can debate the reasons for that. But it is also worth recording that the ONS’s annual survey of hours and earnings, which is a survey of employers, shows that today the pay of more than four in 10 jobs in the UK is set with reference to a union agreement. In other words, collective bargaining still sets the pace for the pay and conditions of a substantial part of the workforce, well beyond union membership—but expanding collective bargaining coverage has never been more urgent.
OECD analysis shows that the UK has one of the highest levels of income inequality in Europe. The picture on wealth inequality is even worse. That is bad for society and a brake on fair growth. It is not just about the families who work all the hours God sends yet still rely on benefits and food banks, or that under the previous Government living standards stagnated for 15 long years, or that the real threat to the survival of pubs, hospitality and small businesses on the high street is the prolonged squeeze on disposable income that has hammered consumer spending. It is more than that.
Ever since the previous Government’s austerity cuts, Brexit, and then Covid, there has been growing public anger that sacrifice has not been equally shared. The so-called trickle-down theory of economics has proven to be an elaborate con. To take one glaring example, in the financial year from 2023, the CEO of the outsourced services giant Mitie was paid nearly £15 million. That is 575 times that of a median worker at the company. I challenge any noble Lord to justify that.
Some noble Lords opposite may not like what trade unions stand for. In the other place, their party joined Reform in voting against better sick pay, an end to exploitative zero-hours contracts, and protection against fire and rehire. But when it comes to collective bargaining, I have yet to hear the Opposition come up with a better plan for workers so that workers can win a fairer share of the wealth that, after all, they helped create. Perhaps we can hear an alternative today.
In the meantime, as we have heard, the evidence is clear: when individual workers combine their working power, they are much more likely to win better pay, safety, skills training, family-friendly policies, workforce engagement and, ultimately, higher productivity—a good deal for workers and for their employers.
I congratulate my noble friend the Minister on the Government’s plan to reinstate the school support staff negotiating body and to establish a fair pay agreement for social care. This could be transformative, not only for the workforce but for the service and everyone who relies on its dedicated care. But we cannot stop there. We can debate the detail, but at the heart of my noble friend Lord Hendy’s amendment is the objective to spread the benefits of collective bargaining to more sectors of the economy. That would provide a level playing field for business, lift living standards, improve workforce well-being and boost company productivity, which in turn would aid fair growth.
In her response to the debate in Committee on 5 June, my noble friend Lady Jones, the Minister, said that the Government
“intend to learn from the first fair pay agreement process … before considering rolling out agreements in other areas”.—[Official Report, 5/6/25; col. 943.]
I understand the concern to learn from the success of the commitments already contained within the Bill, but it would seem sensible to take powers to introduce more sectoral agreements now, so that the Government are ready to act quickly in the future.
I know that the Government understand the absolute urgency of the need to tackle inequality in this country, to get living standards rising and to boost business investment in skills and productivity. Sectoral collective agreements are one of the quickest, most flexible and most effective ways to do just that. But, in the meantime, will my noble friend the Minister kindly undertake to facilitate a meeting with the relevant Cabinet Office Minister to explore how government procurement social value rules can promote fair work and a collective voice for workers?