Labour Market

Don’t Revive ‘Anti-Competitive’ Sectoral Bargaining


In the Media

Christopher Snowdon writes for The Critic

Len Shackleton writes for CapX

IEA Editorial and Research Fellow Len Shackleton has written for CapX criticising the Labour Party’s pledge to revive nationwide sectoral bargaining, starting with social care.

Len wrote:

“Sectoral bargaining will get private sector employers round a table with unions to negotiate ‘Fair Pay Agreements’ which will have the force of law.

“National sectoral bargaining began at the end of the 19th century, as employers’ associations were set up to counterbalance the growing power of industrial trade unionism. Employers saw these bodies as a way of reducing the pressure on them from militant unions, by sharing it across other businesses; and by setting a common wage across the sector they reduced the possibility of new market entrants undercutting pay and staffing arrangements. They were thus anti-competitive from the off.

“It’s unsurprising that the unions, and their Labour Party allies, would like to see a return to national bargaining. They point to many continental European countries where it is still a thing. However, Europe’s largest economy, Germany, has also moved away from widespread national bargaining and in some countries where it persists, such as France, low unionisation rates mean there are doubts about the representativeness of noisy and strike-happy unions with only 7 or 8% membership among employees.

“It will be interesting to see how the new focus on national collective bargaining will work in social care. It’s an unpropitious testing-ground.”

Read Len’s full piece here.