Why Strike-Averse Britain Is Gripped by Industrial Action : Business


Britain isn’t accustomed to the waves of labor unrest that can be a fact of life in countries where the right to strike is enshrined in law. Until recently, it appeared that coordinated industrial action was largely a thing of the past, thanks partly to union-busting reforms pushed through by Prime Minister Margaret Thatcher in the 1980s. But as living costs soar, and even some people with jobs turn to food banks in order to eat, hundreds of thousands of UK workers are wielding their collective bargaining power to demand higher wages. 

Much of the unrest is focused on state sectors where successive Conservative governments sought for many years to limit wage growth as a way to curb national borrowing. The strikes broke out in the first half of 2022 as inflation jumped, eventually reaching above 11% — one of the highest rates in Europe — tipping many working people into poverty. Unions say pay needs to rise to cover the soaring cost of food, energy, clothing and housing. Some of the strikes are in privatized or part-privatized services such as postal delivery and public transport, where the potential damage from service disruption gives leverage to demand better pay and conditions. 

2. Who joined the strikes?

Rail workers, bus drivers, teachers, the Royal Mail, nurses (who had never before staged a large-scale walkout), ambulance staff, border control officers, lawyers, driving test examiners and physiotherapists, among others. Junior doctors and firefighters were also threatening to walk off the job. 

3. What was the impact? 

Analysis by Bloomberg Economics puts the cost to the UK economy at £1.5 billion ($1.85 billion) for 2022. The scale of industrial action grew in early 2023, with as many as half a million workers on strike on Feb. 1. However, Bloomberg Economics forecast only a “modest downside risk” to GDP in the first quarter. The protests still pale in comparison to those experienced in the 1970s, most memorably in 1972 when coal miners caused rolling blackouts by disrupting power stations, and during the “winter of discontent” of 1978 and 1979 that saw strikes by road hauliers and millions of public sector workers, including refuse collectors, hospital staff and even gravediggers. Some 20 to 30 million working days were lost to strikes during those two periods. By comparison, Capital Economics estimated that 1.5 million days may have been lost in December 2022. Even if that were repeated every month, it would not match the disruption of the 1970s. 

4. What was the government’s response?

It refused to meet the pay demands and invoked the memory of Thatcher, who eviscerated the power of union bosses in the 1980s in the belief that they were holding the country to ransom and blocking necessary economic reform. “We must make union barons think twice before wielding the strike weapon – and complete Margaret Thatcher’s unfinished business,” Business Secretary Grant Shapps wrote on Twitter. Prime Minister Rishi Sunak dug in by introducing legislation to enforce minimum service levels and make it harder for essential workers such as firefighters, teachers, train drivers and nuclear power station engineers to walk off the job. The proposed laws have angered unions leaders, who say it would allow employers to fire workers for going on strike. 

5. What explains the government’s tough stance?

A botched economic plan blew up the UK’s bond market in September and Sunak has been anxious to restore the Conservatives’ fiscal credibility. Big wage hikes would widen a state deficit already bloated by Covid-related costs and state support for household and business energy bills. Ministers also argue that higher pay would stoke more inflation and make everyone worse off. There may be another reason why the government has been willing to endure the strikes: They’re not as effective as they used to be. With millions of people able to work efficiently from home, the International Labor Organization said the train strikes could even boost national productivity. The government may have calculated that compromise isn’t in its interests: The Centre for Economics and Business Research estimates a £600 million hit to the state from the strikes. That compares with £7.5 billion in extra costs if public sector pay were raised by between 5% to 8%. 

6. What cards do the unions hold? 

The anti-strike law is likely to take months to enact, and won’t cover services like mail delivery, which accounted for more strike days than transport and the National Health Service in December, according to Capital Economics. If the labor unrest spreads, it will add a further drag on a UK economy that’s been held back by rising borrowing costs and new trade barriers with the European Union. Britain is the only Group of Seven nation with an economy that’s still smaller than before the pandemic. One reason the strikes could persist is that many workers believe the public has sympathy for their cause and shares their demand for more investment in public services. Around two-thirds of respondents consistently backed the nurses’ strikes in polls by YouGov. Half of the public supported strikes by teachers, a poll by Savanta showed in February, while only 30% opposed them.    

7. What are the limits of union power in the UK? 

Unions in Britain face tougher rules around strikes than in most other European countries. Labor groups need to clear more hurdles to order a walkout and are banned from holding secondary action — in which workers strike in sympathy with staff at a different employer. In France and Germany, a “right to strike” is guaranteed by law. Strike action in the UK is automatically illegal unless unions hold a vote, half of their members cast a ballot and most of them back a walkout, said David Cabrelli, an expert in labor law at the University of Edinburgh. 

–With assistance from Katharine Gemmell, Philip Aldrick and Andrew Atkinson.

More stories like this are available on bloomberg.com

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