As we struggle to emerge from the recession, could industrial relations take longer to mend than the economy itself? Brendan Barber thinks so.
“We are still coping with the ‘aftermath’ of the financial crisis,” the general secretary of the Trades Union Congress (TUC) says, but he doesn’t mean lost productivity. He’s talking about the worsened relationships between bosses and workers. And the reason for this antipathy? The return of obscene, as he sees them, payouts for those at the top while those at the bottom struggle to pay their bills. “There is still a clash of interests and a clash of values between bosses and workers,” says Barber. And it’s the row about pay that illustrates that most starkly.
The most acute problem, says Barber, is where those running the organisations give themselves ever-increasing rewards that are out of line with the performance of those organisations. “There’s this endless spiral upwards at the top of corporate Britain while everybody else is struggling massively,” says Barber. “It’d be nice to say we’re all in this together but that’s got to be reflected, and seen to be reflected and, at the moment, it isn’t. The speed with which the financial system went back to business-as-usual once the initial phase was over was astonishing. The shamelessness without a backwards glance…”
And Barber agrees that a lot of the progress made in the past few decades – breaking down the barriers between the “boss class” and the worker – has suffered real damage more recently.
“Yes, it’s under real strain,” he says. This is a shame, given the successes of the past few years. Before the recession kicked in the number of days lost to industrial disputes was already down to pretty much a record low – and the way industries worked together to limit the damage to jobs during the economic downturn was heartening. Many trade unions agreed to crisis measures, including unpaid leave and shorter working weeks, which saved both money and jobs. “That kept workforces intact,” says Barber, “rather than just reaching for the P45s as the first response to that kind of pressure.”
However, that now seems to be something of a distant memory. There is, says Barber, now “a massive divide opening up between rewards at the top, which are going through the roof, and people lower down the economic scale, who are increasingly seeing their living standards squeezed”.
And, as inflation and household bills continue to rise throughout this year, that can only get worse. Unless, he says, wages start to pick up for the ordinary worker.
“If we want to build an economy that’s delivering prosperity on a more equitable basis,” he says, “then we have got to get serious about long-term wealth creation.” Barber believes that there is a fundamental flaw in the way our capital markets work to support our financial markets. “They are skewed towards making a quick buck, a quick turnaround and a quick exit,” he says. Still clearly fuming about big city payouts, he describes them as a “huge example of market failure”.
Many organisations have seen a return to profitability, which, he believes, proves the argument for parsimonious pay rewards isn’t a sound one. Calling for a “return to decent wages,” he says, “we’re not going to get a resumption of growth until we see consumer confidence back.
“We need to think about building an economy that isn’t reliant on excessive debt,” he adds. “The share of GDP going on wages has slumped from about 65% 30 years ago to just over 50%. That’s not a basis to build sustainable growth.”
But the biggest failure of British management is, he says, employee engagement – or, rather, the lack of it. Far too few workers are able to understand what their organisation actually does, let alone get to feel that they play a real part in it, he believes.
Loath to highlight one organisation as a standard-bearer for good management, he does however propose two quite surprising companies for gold stars: British Airways (BA) and Tesco. BA, despite its crippling recent disputes with cabin crews, has “over a long time by and large worked well” with unions, says Barber. And Tesco has “seen tremendous growth and real commercial success with a very solid union relationship as part of its business model,” he adds.
On the dwindling scale and power of unions, Barber concedes “things aren’t what they were,” but insists that, fundamentally, British people are still as supportive of unions, and the “ideas and ideals” that they stand for, as they always have been.
But, given that union membership peaked in the 1970s at 13 million, to have lost more than half that number since then seems a pretty astonishing failure. But, Barber insists, this isn’t because we’ve fallen out of love with the unions. Rather, another, more practical, factor is at work.
“Over a long period,” he says, “union membership has struggled to keep pace with the changing shape and structure of the labour market. Some areas have gone into sharp decline.” This is certainly true: manufacturing used to employ seven million people, the vast majority of whom would automatically join a union. Today, there are only three million manufacturing jobs in the UK and, thus, far fewer union members.
And the sectors that have grown in the past few decades, such as financial services, are rarely trade union strongholds. One reason for that is, as Barber calls it, the increasing “casualisation” of the workforce in areas like hospitality and catering, in which a lot of young people work for short periods of time. It would, clearly, make no sense for them to join a union.
But Barber admits the union movement hasn’t done as well as it should have. And he points to Germany as a better role model, where unions are organised at industry level and work cheek-by-jowl with works councils. The cooperation between unions and management councils has made their system the envy of union leaders worldwide.
Scope to develop
He might be the voice of the worker but, as the general secretary of the TUC, Barber is also a boss. So what’s his own management style? “I try to be the kind of boss who values the skills of those around me,” he says, “and creates opportunities for people to demonstrate that.” And, having worked at the TUC since 1975, he admits to being “a one-man campaign to demonstrate there is such a thing as a job for life in a single organisation”.
Meanwhile, when it comes to our national reputation for having a stiff upper lip and emotional constipation, this boss agrees there is some work to do. “What’s very important is how people feel about their work and their workplace,” he says. “A part of that is, of course, whether they think they’re fairly paid, but much more important very often are the other things: Do they feel respected by management? How does the work relate to the rest of their lives?”
And on that front he can cite big changes within the TUC. When he started in the 1970s it was a “fantastically hierarchical” organisation, with what he calls an astonishingly rigid and controlling management system. Not to mention the fact that it was hugely male-dominated. In fact, of the 15 members or so on the general council there were only two women – and they were in “reserved seats”. As Barber admits, they might not have been there had it not been for positive discrimination. Today, about half the seats are occupied by women who are there, one can only hope, on merit. But, says Barber, the most important change between the TUC of the 1970s and now is that workers now have “scope to develop in their jobs creatively.”
“In the old days you did what you were told and you didn’t cross the line,” he recalls. “Now, I hope, it’s all about giving people space.”
BRENDAN BARBER’S MILESTONES
1951 Born Southport, Merseyside
1974 Graduates with BA in social sciences from City university
1975 Joins TuC as policy officer
1976 Appointed TuC assistant secretary of organisation and industrial relations
1979 Appointed TuC head of press and information
1987 Appointed TuC head of organisation and industrial relations
1993 Appointed TuC deputy general secretary
2003 Appointed TuC general secretary
2003-2012 Non-executive director of the Court of the Bank of England
1995-2004 Member of Acas council
1999-2003 Member of Sport England
About the author
Born Daisy Sampson in London in 1972, Daisy edited politics journal the House Magazine from 1995 to 1997 before becoming press secretary to the then-Liberal Democrat leader, Charles Kennedy, in 1999, following a two-year spell as a freelance journalist. She moved to Channel 4 in 2001 before co-presenting The Daily Politics and Yesterday in Parliament on the BBC.
In 2005, she was poached by ITN as chief political correspondent before becoming its economics editor in 2008. In the summer of 2011, she took on a new role as special correspondent for ITV News at Ten – and joined Professional Manager as headline interviewer.