In a letter in the Evening Standard Philip Booth discusses BA's history

The 99 industrial relations academics protest too much when they argue that Willie Walsh is trying to break the union by promoting confrontation. However, what is really surprising is their assertion that there will be a “race to the bottom” in terms of pay and conditions if the company wins and the union loses.

Pay is determined by competition and productivity: union action to raise pay is an irrelevance in the long term. Unions may play a useful role in providing welfare services and legal services to individual members but they do not, in general, lead to higher pay.

The situation at BA is unfortunate – both for its shareholders and its workers. The company is facing a number of problems, not least those caused by a generous pension scheme at a time of sharply increased pension costs. This was once a highly protected business from which both shareholders and workers extracted monopoly rents and taxpayer subsidies. The protection of the airline industry was rightly stripped away to the benefit of many – including union members – who can now fly more cheaply. There is now certainly a need to adjust terms and conditions of employment at BA. If this does not happen, there will be no BA and there will be no BA cabin crew. However, there is no “race to the bottom” in prospect – to repeat, it is competition and increased productivity that raises conditions for all: “race to the bottom” arguments are fallacious.

Prof. Philip Booth
Editorial and Programme Director, Institute of Economic Affairs