Tony Blair used to be accused by the former TUC head John Monks of treating the trade unions like “embarrassing elderly relatives”. Keir Starmer prefers to regard them as partners. That much was clear from the Prime Minister’s speech to the TUC Congress in which he used the word “partnership” seven times.
Much recent media coverage of Labour and the unions has been overwrought. The party is invariably either “in bed” with them or “at war” with them (and sometimes both at once). The middle ground in which compromise and negotiation take place – witness Mick Lynch’s measured praise for Starmer – is usually ignored.
But this partly reflects the fraught history of Labour-union relations: In Place of Strife (Barbara Castle’s doomed 1969 White Paper), “the winter of discontent”, the rise of the “awkward squad” under Blair and the Falkirk saga under Ed Miliband.
More broadly, the UK has never developed the consensual industrial relations that prevail in Germany and the Nordic states. Adversarialism has reigned under both Labour and Conservative governments.
Starmer wants to change this. “Partnership is a more difficult way of doing politics – I don’t deny it,” he told the TUC. “I know there’s clarity in the old ways, the zero-sum ways. Business versus worker. Management versus union. Public versus private. Pick your side, to the victor – the spoils.”
The last prime minister to attempt a pact of this kind was Harold Wilson (Starmer’s favourite Labour leader). In 1973 he unveiled what became known as “the social contract”. Under this arrangement, the government agreed to policies such as price controls, higher investment, industrial democracy and the repeal of Ted Heath’s anti-union legislation in return for wage restraint from the unions (inflation had surged following an energy price shock and a tax-cutting Tory Budget).
One can imagine Wilson listening to Starmer’s speech with a wry look on his face: “Haven’t we been here before?” The Prime Minister made a series of promises to the unions: an Employment Rights Bill, a genuine industrial strategy, the renationalisation of the railways and the repeal of David Cameron’s 2016 Trade Union Act.
In return, he said, the unions would need to accept… wage restraint. “With tough decisions on the horizon – pay will inevitably be shaped by that. I owe you that candour.”
Labour has accepted recommended public sector pay increases in order to settle industrial disputes (just as a pragmatic Margaret Thatcher did in 1979). But Starmer’s remarks were a signal that tougher negotiations could lie ahead.
His use of the word “candour” evoked one of the most pivotal speeches in Labour history. “We used to think that you could spend your way out of a recession,” Jim Callaghan declared in his address to the 1976 Labour Party Conference. “I tell you in all candour that that option no longer exists.”
It was under Callaghan that the social contract unravelled. The 1978 winter of discontent was triggered by his frugal pay offer of 5 per cent to the unions (“They deserve zero per cent,” Callaghan growled to his son-in-law, the journalist Peter Jay).
Starmer will hope for a rather happier ending. But pay isn’t the only fault line to watch. When I interviewed the TUC general secretary, Paul Nowak, last week I was struck by his comments on North Sea oil and gas workers. “Don’t give people warm words,” he warned. “We’re still dealing with the impact of mismanaged industrial transition 40 years on from the closure of the pits.”
The TUC duly voted for a motion opposing a ban on new oil and gas licences – as pledged by Labour – until a plan guaranteeing comparable jobs for all North Sea workers has been agreed. The latter, it warned, must not become “the miners of net zero”.
Much of the focus is on pay, but expect the UK’s energy transition, as well as public sector reform, to emerge as a significant tension. If history is any guide, Starmer’s “partnership” with the unions will be sorely tested. But that he’s offering one at all marks a break with the post-Thatcher era.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[See also: Rachel Reeves’ great gamble]
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