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Bob Crow is right to fight, not genuflect: ‘witness the rewards for failure at Shell’

The Guardian: Bob Crow is right to fight, not genuflect: ‘witness the rewards for failure at Shell’

Pensions fall and inequality grows when trade unions are weakened

Larry Elliott

Thursday July 1, 2004

The London Underground was getting back to normal today after a 24-hour strike by tube workers. A week ago a national rail strike was called off at the eleventh hour when the management backed down over pensions. Cue predictable headlines about militancy, bloody-minded wreckers, summer of discontent and the demonisation of Bob Crow. The general secretary of the RMT is the latest union bogeyman we are all supposed to hate.

Let’s put things in perspective. Britain is not being laid low by widespread industrial action; there were 133 stoppages last year, the lowest on record. Given the general tightness of the labour market, it is telling that there has not been more flexing of union muscles. After two decades and more of union-bashing, the muscles – for many groups of workers – are simply not there to be flexed.

The RMT does, however, retain its clout. Where other unions can be monstered by the threat of outsourcing and globalisation, the RMT can stop the trains and tubes running. But the idea that the union might actually want to use its power obviously comes as a shock to some, up to and including Tony Blair. “The prime minister’s view is that such strikes are unnecessary and should be resolved in proper talks between management and workforce,” his spokesman said yesterday.

The fact is, of course, that “proper talks” tend to end up with the union getting sweet Fanny Adams besides a bit more chat about about partnership and training. New Labour’s view of union leaders is that they should confine their activities to writing big cheques for the election fighting fund once every four years and appraising themselves of Nigella’s latest recipes so that they can enter into full and frank negotiations about the toppings for the canapes at the staff Christmas party. Crow’s view is that it was his union’s willingness to fight rather than genuflect that secured the concession of a final salary pension for rail workers with at least five years’ service.

Crow is right. Plenty of crocodile tears are shed about the collapse of final salary pensions and the growing gulf between rich and poor, but the fact is that both are the consequence of a weakening of organised labour. Over the past 25 years, the rapid decline of unionisation in the UK has coincided with the fastest increase in inequality of any country in the developed world.

Clearly, the balance of power in the workforce has shifted over the past 25 years. Where organised labour is weak or supine, managements can always come up with good reason for closing pension schemes or for failing to offer decent pay increases. If a company is doing well, any spare cash has to be put away for a rainy day; if it is doing badly, there is no money to spare.

Funnily enough, however, the same strictures never seem to apply to those running companies, a point not lost on Crow and union leaders like him. In fact, the opposite applies: no matter how badly a company is doing, there always seems to be plenty in the bank for a six-figure pay rise, a hefty bonus and a gold-plated final salary pension. The most successful union of the past decade has been one that doesn’t exist: the amalgamated union of executive and non-executive directors, a friendly society which operates on the basis of “you scratch my back and I’ll scratch yours”. The typical chief executive of a FTSE 100 company now earns 80 times more, on average, than one of his workers.

The stock rightwing answer to this is that salaries are set by the market. If executives can negotiate themselves a deal that promises Croesus-like riches, then so be it. There are a number of points here. The first is that what’s sauce for the goose is sauce for the gander. If it’s legitimate for executives to look after their own interests, then the same applies to unions. The second is that tipping the balance in the workplace heavily away from labour does not seem to have made much difference to the way British business is run, – witness the rewards for failure at Shell and Sainsbury’s. Management has certainly been granted the right to manage, and has proceeded to do so: badly. Finally, the methods used by executives to enrich themselves have often been at the expense of their employees. One reason that so many final salary schemes are in crisis is that during the 1990s, companies took advantage of a rising stock market to take pension holidays. By choosing not to put money into schemes, they boosted profits in the short-term, thus pushing up the share price and the value of their share-option packages.

In the light of all this, the RMT’s small victory on behalf of one group of workers should be applauded by anyone who can see that this is not a question of the politics of envy, but the politics of equity. Crow has secured better working conditions for his members. All power to his elbow.

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