Conservative Government hails “huge benefits” of trade unions

Trade unions have given  “huge benefits” to the British economy, said Conservative Government Business, Innovation and Skills Spokesperson Lord Popat in Parliament on Monday 7 July 2014. Here is my letter published on 25 July in the Essex County Standard. It was in a big red box (for emphasis, not socialism or for being wrong!).

The breathtaking hypocrisy of the Tories was illustrated in the week of the strike by public sector unions on Thursday 10 July. You reported (11 July, page 5) how local Tory MP Bernard Jenkin was criticising teachers in the NUT for “walking out in dispute with the government over pay, pensions and workload.”  He was echoing Michael “how dare they strike” Gove. Incidentally a photo has been doing the rounds on Twitter of sacked Education Secretary Gove when he was on strike as a young NUT member himself! But the hypocrisy is worse than that.

In the same week there was a speech by Conservative Government Business, Innovation and Skills Spokesperson, Lord Popat, in the House of Lords where he spoke of the “huge benefits” of trade unions to the British economy. This was on Monday 7 July 2014 at 5.57pm in case anyone wants to check the Hansard record of his speech.

He said the “trade union movement engaged positively during the recent economic downturn [2007-2013] while also maintaining its traditions of fairness and equality." He outlined how "trade unions contributed £443 million in gross value added to the UK economy in 2012”, which was due to the way representation in the workplace reduces dismissal rates and redundancy costs, helps resolve employment tribunal claims, and reduces sickness and injury rates in the workplace. He concluded: “We can see from those figures the huge benefits that employers receive by having their members represented by trade unions."

Robbie Spence, Colchester and District Green Party

Here below is a selection of quotations from his speech on how trade unions support diversity, disabled people and the voluntary sector and help make workplaces greener - with emphasis added. It's followed by the Hansard verbatim transcription  of his speech.

"[T]he union movement engaged positively during the recent economic downturn [2007-2013] while also maintaining its traditions of fairness and equality."
"[T]rade unions contributed £443 million in gross value added to the UK economy in 2012. ... Representation in the workplace reduces the dismissal rate by 5% to 10%, thus reducing annual redundancy costs by £107 million to £213 million. Representation reduces the voluntary exit rate in a workplace by 5% to 10%, saving employers between £72 million and £143 million a year."
"The impact of workplace representatives in reducing dismissal rates also reduced the number of employment tribunal claims against workplaces, thereby providing annual savings to business and the Exchequer of between £22 million and £43 million. Health and safety representatives in the workplace reduce injury rates for employees by between 10% and 15%, providing overall annual economic benefits of between £136 million and £371 million, and reduce incidence of work-related illness by between 1% and 3%, providing an overall annual economic benefit of between £45 million and £207 million. The annual economic benefit of training and learning generated through trade union learning representatives was estimated at between £94 million and £156 million, due to increased productivity. We can see from those figures the huge benefits that employers receive by having their members represented by trade unions."
"Unions help to maintain the debate about diversity in the workplace, about how disability should not be shunned and about how improving skills can make a real difference to the poor and vulnerable. ... Unions are also at the forefront of developing greener workplaces by working in co-operation with employers who want to make their enterprise environmentally and energy effective."

Trade Unions - Question for Short Debate - Conservative Government Business, Innovation and Skills Spokesperson Lord Popat in Parliament on Monday 7 July 2014 at  5.57 pm

Lord Popat (Con): My Lords, I am grateful to my noble friend Lord Balfe for initiating this important debate. On listening to him, it is clear that he has a detailed knowledge of the operation and activities of trade unions, and of the impact they have on our economy. This is an interesting debate for me to respond to because we have reached a cross-party agreement in the Committee today on the important role played by the trade unions in terms of both the country and the economy. However, it is worth reminding ourselves that in 2013 the UK experienced its fastest growth since 2007 and is currently the fastest growing major developed economy. While I am not implying that this can be attributed to trade unions, it is relevant to note that the union movement engaged positively during the recent economic downturn while also maintaining its traditions of fairness and equality.

My noble friend Lord Balfe opened the debate by talking about the positive contribution made by trade unions. A recent ONS business survey tells us that trade unions contributed £443 million in gross value added to the UK economy in 2012. I do not know about their working patterns or which parties members vote for, and I do not think that my office would have that information either. However, I will present some facts about trade unions that were prepared by the Department of Trade and Industry in 2007. Representation in the workplace reduces the dismissal rate by 5% to 10%, thus reducing annual redundancy costs by £107 million to £213 million. Representation reduces the voluntary exit rate in a workplace by 5% to 10%, saving employers between £72 million and £143 million a year.

The impact of workplace representatives in reducing dismissal rates also reduced the number of employment tribunal claims against workplaces, thereby providing annual savings to business and the Exchequer of between £22 million and £43 million. Health and safety representatives in the workplace reduce injury rates for employees by between 10% and 15%, providing overall annual economic benefits of between £136 million and £371 million, and reduce incidence of work-related illness by between 1% and 3%, providing an overall annual economic benefit of between £45 million and £207 million. The annual economic benefit of training and learning generated through trade union learning representatives was estimated at between £94 million and £156 million, due to increased productivity.

We can see from those figures the huge benefits that employers receive by having their members represented by trade unions. While it is unfortunate that no current data are available, and these data are now seven years old, they show the scale of the positive effect that trade unions have on our economy and how this debate is an excellent chance to remind us all of those facts. I am afraid that we do not have recent data on the impacts that I have mentioned. The industrial relations climate in the UK is generally positive; industrial action is at an historic low and has been relatively stable for more than 20 years.

I will now talk about the wider benefits of trade unions, which a number of noble Lords mentioned, in particular the noble Lord, Lord Morris. Noble Lords quite rightly said that the trade union movement is very relevant today. Trade unions play a role that is increasingly important to the public and to those young people who will form our future workforce. It is about making sure that business is a benefit to society and reflects the society we live in. My noble friend Lord Cormack mentioned responsibility and partnership. Unions help to maintain the debate about diversity in the workplace, about how disability should not be shunned and about how improving skills can make a real difference to the poor and vulnerable. All this makes our economy perform better for all our citizens. Quite rightly, the noble Lord, Lord Monks, mentioned the benefits of economic growth, which must be distributed while we are doing well in this country. Hence, we are looking at the minimum wage and have increased the rate above inflation in the past few years.

Trade union members also participate in the many voluntary roles that help create cohesive communities. Unions are also at the forefront of developing greener workplaces by working in co-operation with employers who want to make their enterprise environmentally and energy effective.

The Union Learning Fund, which is administered by Union Learn, the learning and skills organisation of the TUC, is an excellent example of how unions help their members and their employers. Union Learning Fund projects are primarily targeted at workers, many of whom have low skills, including literacy and numeracy needs—the very people who may be reluctant, or may not know how, to take advantage of the various development opportunities available to them. The history of unions providing learning for their members is a long one. Some colleges were established for the education of working people in the late 19th century, closely followed by the founding of the Workers’ Educational Association. The opening of the TUC training college after the Second World War gave a big boost to the training of trade union representatives.