What Will Work: Starmerism and Employment

Labour has not enjoyed the honeymoon period usually enjoyed by newly elected governments. Starmer’s own ratings and the Labour Party’s have tumbled, reflecting widespread dissatisfaction with both premiere and party. Domestically, it is easy enough to see why — the many and significant crises facing Britain are not being addressed with the speed, urgency and ambition that they merit. Whether it is hospital waiting times, buses that do not arrive, trains that cost too much, a job that does not pay enough to get by on, (literally) falling-down schools, mouldy homes or expensive energy bills, it is impossible to find yourself in contemporary Britain without feeling that things simply are not working.

Six months into government, what approaches are Starmer’s government taking to Britain’s various chronic and acute crises? Firstly, what we might term “Growthism”: a frequently and strongly stated commitment to increase a set of headline economic figures, which is attached to a set of ideas about how to improve them, namely, through changes to planning legislation and the encouragement of private investment. Secondly, and relatedly, a set of self-imposed and arbitrary restrictions on borrowing. Thirdly, a dangerous and chaotic series of right-wing populist flourishes seemingly in response to the polling success of Reform UK.

Starmer’s approach to work sits slightly uneasily in this constellation. In assembling the electoral coalition that brought him to power last summer, a package of legal reforms and raises to the minimum wage were promised to trade unions, the majority of whom, with the notable exception of Unite, were brought into the political fold of Starmerism under its aegis. First labelled as “A New Deal for Workers”, now branded “Make Work Pay”, this programme uplifts legal rights for workers, undoes the worst excesses of the last government’s anti-union lawfare, and enhances the minimum wage. Labour has so far presented a new Employment Bill and has promised reforms to benefits. The former enhances workers’ contractual rights and removes the anti-union legislation of the previous government. Provided the rights promised are retained in full and not watered down, the Bill represents a significant uplift, at least in terms of the law, for workers. There are several ways in which it could be expanded and some areas of law that it does not address, including workplace democracy and sectoral collective bargaining (for more on this, see Ewan McGaughey’s briefing for Common Wealth’s Centre for Democratising Work). Notwithstanding these significant limitations, the Bill represents a good first step in rebalancing power between workers and employers.

However, the promised legal protections run the risk of being delayed or even diluted as they pass through Bill stages. Most recently it appears that the “right to switch off” has been resigned to an uncertain future. Each stage brings with it another attack from sections of business, against which the Government’s visible lack of resolve will surely invite more. This is worrying, but the problem might be more fundamental. If, as might be unlikely, the reforms are passed in full, will they do enough to rebalance power? In one sense, the proof is in the pudding; we will not know what difference new powers will make until they are actually used. A right in law is one thing, a right as exercised — by concrete agents, in concrete situations, with concrete powers — another. As Marx memorably put it: between equal rights, force decides.

The law has important limitations. It requires enforcement. Trade unions traditionally provided this muscle, collectively protecting workers. Increasing the power of unions by repealing not only the most recent tranche of anti-union legislation but layers of constraints, created by successive governments over decades and which have made Britain subject to some of the most regressive trade union laws in Europe, would be one way for Starmerism’s approach to meaningfully improve the conditions of work in Britain. More heft for unions means better enforcement of on-paper rights.

How else could Labour rebalance power? Organised labour is able, to varying extents, to shape the conditions of work, but its ability to do so depends (in addition to the legal context in which it is acting) on many factors: on the overall power of workers shaped by how in demand they are (i.e. if it is a “hot” labour market, or if their sector is able to command particular power as a result of its place in the social division of labour), on the willingness of workers to act to defend their existing gains and fight for new ones, on the willingness of government to enforce those rights, and on the willingness of government to meet those demands as employer or to stipulate as a procurement customer. When acting as an employer, the working conditions instituted by governments set the benchmark by which other workers can negotiate against other employers, diffusing throughout the wider labour market. Elsewhere, for example through procurement, government can stipulate conditions to drive up standards and reset norms in workers’ favour. The government has the ability as a significant market actor to shape and improve labour standards through the channels of both demand and supply.

The problems with work in Britain are clear enough. Importantly, these problems are the result not of rogue employers but of a series of political choices that have consistently empowered capital over workers. While the British economy has proved effective at generating employment (more workers than ever before are in work, as the employment rate is at a historic high), this has often come at the cost of security, quality and pay, and subsidised through benefits aimed at rising in-work poverty. Many workers have very little say over how and how much they work. Outside of the public sector, workers are less likely to be covered by a collective bargaining agreement than in recent decades, with negative effects on the power of workers and, as a result, on pay and conditions.

Compensation for work is poor. British wages are low and stagnant, despite the UK being the sixth largest national economy globally. Moreover, the rise of bogus self-employment (when workers are compelled to be self-employed although they are entitled to employee status) has left many self-employed workers lacking basic workplace rights, like sick pay and parental leave, and 1.88 million self-employed workers (of the 4.3 million self-employed population) earn less than two thirds of the median wage.

Insecure work is a persistent problem with 3.9 million workers in such work (on zero-hours contracts, outsourced, casual, or agency workers and the low-paid self-employed). Even in secure work, workers often have little say over the conditions of their work. The pace of work is one indicator of this. The most recent Skills and Employment Survey (which has recorded the views of workers about their work since the mid-1980s), found that almost half of workers surveyed strongly agreed that their job requires them to work very hard compared to a third of workers in 1992.

For decades, the approach of successive British governments has been to grow the number of jobs with little or any thought to their quality. This effort has had two planks: the first, incentivising businesses to increase employment, the second, a benefits system designed to push people into accepting any job via punitive policies. This system prioritises getting the unemployed into any job, regardless of the suitability of the role and the quality of the work. It is not a surprise, then, that jobseekers in the UK are the least likely to engage with government support in all of Europe.  

The current approach has many pernicious downstream effects: it exacerbates health problems through poverty and stress, it undermines quality of life, it makes it almost impossible for households to plan for the future, it makes childcare difficult and other social ties scarcely tenable, and it keeps people stuck in low-paid work over which they have little control, work that itself can negatively impact their wellbeing. But rather than abandon this method and establish a decent floor and dignified life for those in and out of work, with properly funded training pathways back into work for those who want them, Labour’s trailed cuts and reforms to benefits seem set to continue rather than redress this legacy of cruelty and failure.  

What is needed now is change, to move away from a system that produces inequality and insecurity for many. This means abandoning punitive and ineffective approaches to the welfare system and expanding trade union power, and it also means the Government adopting an active role in shaping labour markets and employment.

There is a tension in Starmerism here: a contradiction between attempting to lift the floor for workers’ rights and relying exclusively on private investment to deliver growth — particularly by investment firms unhesitant to secure policy concessions from a Labour party perennially negotiating against itself. If growth is to be delivered by opening up private investment, what sort of working conditions will that growth involve? The crises facing Britain — chronic underinvestment, ailing and ageing infrastructure, an older and sicker population, a reliance on fossil fuels — need investment, but they also need work. The solutions to these problems involve people building, rebuilding, caring and planning. Relying on private business to address these issues will result in downward pressure on wages and working conditions as private companies necessarily must do what is most profitable, not what is the best solution to multiple worsening crises. The task of rebuilding Britain is massive and requires thinking beyond the duration of government terms. It means, also, looking above and beyond what the private sector might achieve.

Under headline growth figures, all kinds of social arrangements can take place. Who gets what, who works where, which kinds of jobs are made, and many more questions are left unanswered. These are the sorts of questions that progressive governing parties should have an interest in answering and shaping.

Deepening legal rights and empowering workers to use them is just one set of levers the state can pull. The Government can directly improve the conditions of work in sectors where it itself acts as an employer or could act as an employer. The care sector is the most obvious example — notorious for bad working conditions and low pay, with bad outcomes for care-workers and care-receivers. Here, standards of work could be driven up by increasing public capacity, rather than relying on profiteering companies, and by making using of sectoral collective bargaining.

Two broad future trajectories for the quality of work and workers’ lives in Britain emerge from this tension in Starmer’s approach to work. The first is one in which a punitive benefits system combines with the prevalence of low-quality jobs to keep swathes of the working population stuck in bad work, while shareholders and executives enjoy handsome profits, directly backstopped by public money, in some cases and subsidised in toto by a welfare state whose ultimate responsibility to the system’s mounting casualties will prove unignorable. Another is a future in which there is a dignified life both in work and for those looking for or unable to work. One in which sectoral collective bargaining delivers high pay and good conditions, and where government is interested in enforcing employment rights and in creating good jobs itself.  What direction the future holds can be determined, at least in part, by this Government, but not without first maintaining manifesto pledges on legal rights, and then in going beyond them, because increasing basic protections alone is unlikely to generate high quality work at the scale and pace needed for meaningful effects to be felt in the course of this Parliament.

If there is a lesson to be gleaned from the American centre left’s dismal performance in last year’s election, it is that, without meaningful change to people’s living standards, headline economic figures do not matter. Given that we live in a society in which quality of life is so thoroughly decided by quality of employment — firstly through pay, as a means to accessing other means to a higher quality of life; secondly, by the quality of that work itself as the workplace is where many of us spend the majority of our time — improving work cannot help but change the most basic material stuff of people’s lives. It is not the only lever, but it is a fundamental one. In societies in which people sell their labour to live, one in which paid work is the basis for meeting most needs, what life is like will depend significantly on what work is like.

“Material” is left-wing cliche. Material tends to be used to invoke, circularly, what has already been decided to be good or right. One way of understanding what might be thought to be material is to consider the difficulties faced in daily life by ordinary people. The sources of these are various: a lack of job security, dysfunctional public transport, crumbling infrastructure, a lack of control over time (both inside and outside work), expensive childcare, being able to see a doctor, and so on. Improving work — beyond better legal frameworks, by government itself generating new, unionised, high-quality jobs, and improving existing ones in the public sector — is one way to make a significant difference to people’s lives, reducing the pervasive feelings of anxiety, insecurity and uncertainty.

The stakes are serious. Firstly, progressive governments should want to improve people’s lives, including their lives as workers. Secondly, there are both principled and pragmatic reasons for significant action in this area. Pragmatically, the prospects for a centre left government to capture a majority without offering much in the way of redistribution of wealth or power is limited; if people do not see positive changes in their lives, their communities and their workplaces, they will not be willing to vote for incumbents. And principally, inaction in this area leaves the door open for an insurgent global far right, a threat that is all the more real in the wake of the elections in Germany.

The kind of programmes that would durably solve the problems facing Britain will require much more than watered down election promises. They will involve upfront costs, coordinated implementation, and long-term investment, all of which are not likely to happen by attracting and subsidising private investment which exists to profit from short-term returns by keeping capital expenditures low and investing only when and where there is money to be made.

Taking the bold and enduring action necessary to make a real difference to people’s lives is necessary for rebuilding Britain’s frayed social infrastructure and for assembling a majority of voters at any future election. The majority on which Starmer was elected is already too brittle to withstand timidity without collapse — the honeymoon is over before it even began.