It isn’t obvious

The theme of the STUC‘s 2014 Congress is ‘A Just Scotland’, the title under which we have been conducting our consultation and engagement initiative with unions and their members on Scotland’s Constitutional future.

Inevitably, given this will be our last Annual Congress before the Referendum, it is the issue that is sure to dominate discussion. While it is always dangerous to prejudge the outcome of any Congress debate, anyone who expects either a Yes or No position to emerge should not hold their breath.

As I said when I launched our second A Just Scotland (AJS2) report in February, whilst many union members have made their choice, for a significant proportion, the answer ‘isn’t obvious’ and they are in the process of balancing the advantages and disadvantages based on the recognition that changing Scotland’s relationship with the UK involves a ‘trade off’ of powers and/or opportunity. Exaggerated claims from both campaigns, and the increasingly febrile tone of debate, are an impediment to these vital considerations.

Congress is unlikely to reach either a Yes or No position but will set out a progressive policy agenda to be advanced whatever the outcome in September

While some may be disappointed, I make no apology for our approach which I expect Congress to fully endorse. It is an approach that takes a detailed look at the issues and asks hard questions of both campaigns, concentrating on which of the referendum outcomes is most likely to promote social justice and tackle economic inequality.

AJS2 identifies the pressing need for the pro-devolution parties to present vision for Scotland and give clear commitments to bringing forward enhanced devolution proposals and to be definitive that any block grant funding formula would not place Scotland in a worse position relative to rUK if we vote No.

It is also clear that, despite some very positive policy commitments, the Scottish Government and Yes campaign have thus far failed to convince many that the institutional and fiscal circumstances post-independence would allow meaningful economic and social progress to be achieved. Nor has it accepted the level of tax redistribution which will be necessary to realise the positive vision presented.

While the Congress is unlikely to reach either a Yes or No position, what it will do is set out a progressive policy agenda to be advanced whatever the outcome in September.

At the heart of that agenda will be our economic alternative. I believe we have won the argument against austerity and the opinion polls seem to back that up. However, there is no room for complacency. One only has to look at the response to some fairly modest economic good news to see how things might play out over the coming year.

Let’s get some of the facts straight on the economy. The recent data on growth and employment cannot mask the fact that austerity has failed, even in the terms set by its staunchest advocates.

In 2010 we were told by the UK Government that the economy would grow by 8.2 per cent by the end of 2013 – actual growth 2.7 per cent. In 2010 we were told that borrowing last year would be £60 billion – actual borrowing £111 billion. We were told that the deficit would be eliminated by 2015. Now we are told that won’t happen to 2018. We were told that real wages would grow by 0.5 per cent in 2013. We are now told real wage growth will be 0.1 per cent.

There might be some positive signs on employment. But it is what is underneath the figures that matters. We have a labour market characterised by long term youth unemployment; persistent unemployment amongst women; declining real wages; increasing underemployment; and the vulnerability and insecurity of part time, temporary work, forced self employment and the increasing use of zero hours contracts.

The level of full-time employment across Scotland is still more than 50,000 fewer than it was in 2008. And our underemployment rate of 10.6 per cent is almost four per cent above the rate in 2008.

We have an economy characterised by underinvestment and growing inequality. There has been no meaningful reform of the banks and there has been no rebalancing of our economy away from financial services towards manufacturing.

What little growth we have had in the UK recently has been fueled by an increase in house prices in the South East and an increase in consumer debt. We continue to have the sort of inequality and instability that caused the crash in 2008, and which suggests that another crisis may be just around the corner.

We may have won the argument austerity; what we have yet to do is convince enough people that there is a genuine, credible alternative – through fair taxation and a living wage, through quality jobs and decent services, through fair benefits and stronger communities and through a comprehensive industrial strategy including a statutory scheme of sectoral collective bargaining.

Perhaps the most fundamental problem we face in Britain today is inequality. The UK is one of the most unequal nations in the developed world. This has its roots in short term thinking, share price driven, profit obsessed, bonus grabbing, financial capitalism. It has been caused by a political and economic elite that willfully undermined the institutions that in any democracy should hold them to account – principally trade unions. The decline in real wages as a share of national income is a direct result of the political and industrial attacks on union organisation and influence.

And the power imbalance we see in our economy will not be reversed until the legitimate role of unions in the workplace and in wider society is recognised and an environment exists where unions can function effectively and responsibly in the interests of working people, their families, and wider society.

That is why, as our Congress has repeatedly emphasised, we need the removal of all anti-union legislation and a framework – underpinned by legislation if necessary – to put collective bargaining arrangements in place across the economy.

When a union, on behalf of a workforce, and an employer enter into a collective agreement it is a form of industrial democracy or, although in no sense equal, of workplace power sharing. With it comes a responsibility on both sides to negotiate to resolve differences and, on union members, a legal requirement to demonstrate through a secret ballot that there is support for any industrial action proposed if agreement cannot be reached.

However, as recent events have shown, when an employer despite voluntarily entering into a collective agreement simply refuses to negotiate at every turn, issues threats and ultimatums, including the ultimate threat that they will simply walk abandoning the workforce, the community and the economy we not only have an economic crisis – but perhaps more importantly we have an economic crisis caused by a crisis in democracy – political and industrial democracy.

I welcome the commitments in the Scottish Government’s ‘Scotland’s Future’ to greater employee involvement in industrial decision-making, including a role for employee representatives on company Boards and industry fora. These, together with the recently launched Review of Progressive Workplace Policies which the STUC was instrumental in creating (and which stands in stark contrast to the Coalition’s Carr Review of legislation on Industrial Disputes announced before Christmas – which if followed through on after the UK election could have a significant impact on the ability of union members in key services and utilities to take industrial action) offer an opportunity to advance industrial democracy.

However, there are dangers in this particularly if the focus is on employee representation, rather than trade union representation, if employee involvement is limited and does not deliver genuine influence over company decisions, or employee involvement schemes are used by some employers to bypass and weaken trade union involvement in consultation and negotiation structures.

Measures to ensure the extension of collective bargaining need to be accompanied by steps to promote union recognition; full access for union reps to all relevant company information, including financial information; provision for the appointment of elected and accountable union reps to company Boards; the representation of unions on Industry Leadership Groups; and a recognition that an extension of accountable forms of public and common ownership are an essential element of building meaningful industrial democracy and a fairer and ultimately more successful economy.

The Scottish constitutional debate is a debate about where power should lie and why. It will be of little real relevance unless Government, wherever it sits, has the power and is willing to use it to prevent the destructive actions of private equity capital or if workers through their union, do not have the power to influence the actions of an employer, and achieve a much more equal share on our national wealth.