General Council Report 2020

2.1 Introduction

The coronavirus pandemic has caused a large shock to the economy, coming after 10 years of austerity that had weakened our public services, placed significant downward pressure on wages, and held back economic growth. Both before and after the pandemic hit, the TUC has argued that a new approach to the economy is needed that puts working people front and centre. We have called for workers’ voice to be more central to decision-making, through collective bargaining, in corporate governance, and as we prepare for the future of work. We have set out how we need more- and better-targeted public spending to support our key sectors, including the creative industries, manufacturing, and energy. And we have campaigned for a new deal for workers, with the decent pay, conditions and pensions that every worker deserves.

2.2 The Economy

The pandemic hit when economic growth was at its weakest for a decade. Annual GDP growth in the fourth quarter of 2019 was 1.1 per cent; growth was last lower at the start of 2010 when the economy was coming out of the global recession. UK growth was at this point lower than the US (2.3 per cent), EU (1.2 per cent) and OECD as a whole (1.6 per cent).

TUC analysis showed that growth over the 2010s as a whole was the worst in two centuries.

Since the pandemic, the closing down of a significant part of the economy has meant GDP growth has collapsed. Over the four quarters to 2020 Q1, GDP fell by 1.8 per cent. But the key period of decline is likely to be over both March and April, when monthly GDP fell by a total of 25 per cent.

Ahead of the pandemic, the employment rate had continued to expand to a record 76.6 per cent. But pay growth was flagging: having reached a post-crisis high of 3.9 per cent in the middle of 2019 it had slowed to 2.9 per cent by February 2020. The TUC has kept these figures in perspective throughout, showing the post-crisis high was well below pre-crisis norms. Our commentary has emphasised that in-work and child poverty numbers are continuing to expand.

Since the pandemic, flash estimates based on PAYE data show the number of paid employees has dropped by 612,000, and median monthly pay has fallen by £65.

The critical issue is what happens next. Without further bold action from government, we risk huge losses of jobs and livelihoods and possibly the deepest recession since the 1930s. The OECD estimates that unemployment could hit 11 per cent this year. But this is not inevitable, and action taken now could prevent the despair of mass unemployment.

2.3 Collective bargaining and a new deal for workers

In September 2019, the TUC published a report A Stronger Voice for Workers: How collective bargaining can deliver a better deal at work. It argued that representation and voice at work is a fundamental right and set out research showing that collective bargaining delivers benefits for workers, employers and society. Drawn up following extensive consultation and discussion with unions, the report set out proposals to extend collective bargaining, including:

• unions to have access to workplaces to tell workers about the benefits of union membership and collective bargaining (following the system in place in New Zealand)
• new rights to make it easier for working people to negotiate collectively with their employer
• broadening the scope of collective bargaining rights to include all pay and conditions, and
• the establishment of new bodies for unions and employers to negotiate across sectors, starting with hospitality and social care.

The report was widely promoted, and helped inform the Labour Party’s proposals in the run up to the 2019 election.

Subsequent work has been guided by composite 5 and resolution 17. The TUC has worked with unions and employers in the social care sector to build support for a sector-wide workforce strategy as a first step towards sectoral bargaining and has continued to make the case for the report’s proposals, including the right to access to workplaces.

The TUC has campaigned throughout the year for a new deal for workers, guided by an Executive Committee working group chaired by CWU General Secretary Dave Ward, and in line with composite 7. To mark May Day, the TUC brought together unions in a joint statement, published in the Daily Mirror and across regional titles, to recognise the contribution of key workers, and to call for a New Deal, with jobs for everyone, decent pay, a strong safety net and fair terms and conditions. In July, the TUC held a major conference on organising, Organise 2020, with thousands of participants taking part in a range of online sessions across three days.

2.4 Social security

TUC work on social security continues to highlight the devastating impact of the cuts to the social security budget since 2010.

Separate analysis also showed that, taken as a whole, the tax and benefit reforms introduced by coalition and Conservative governments will make the bottom fifth of households poorer in 2021 than they were at the start of the decade. By contrast, the top fifth will be better off than in 2010.

The TUC has responded to a number of consultations, including the government’s ‘Health is everyone’s business’ that considered different ways in which government and employers could take action to reduce job loss related to ill health. Other consultations included the House of Lords inquiry into the economics of universal credit, the Work and Pensions Select Committee inquiry in to the five week wait in universal credit, and a Labour Party consultation on the future of social security after coronavirus.

2.5 Future of work and automation

The TUC’s work on the future of work and automation has been guided by resolution 19 and composite 6. The TUC was represented on the European Trade Union Confederation (ETUC) negotiating team that finalised a European Framework Agreement on Digitalisation. The agreement, which was signed in June, covers issues such as employment security, skills, artificial intelligence (AI) and the ‘human in control’ principle for when digital technology is introduced in the workplace. The agreement was reached with Business Europe, to which the CBI is affiliated, as well as SMEUnited and CEEP, the European local government employers’ association. 

The TUC has started a project focusing on the use of AI at different stages in the employment relationship. This will include consideration of new, coronavirus-related technologies, as well as other AI-powered technologies. The TUC established a new AI working group of affiliates to guide this work. An early output of this project is a video interview with AI experts Robin Allen QC and Dee Masters, exploring the increased use of technology at work during the coronavirus crisis.

2.6 Insecure work

The TUC has continued to fight against the prevalence of insecure work.

Our analysis showed that at least 3.7 million workers in the UK, around one in nine of the workforce, are in insecure work.  In every region of England and in Wales and Scotland, insecure workers make up at least 10 per cent of the workforce.

The coronavirus outbreak showed how vulnerable many workers are when times are tough.

There have been important trade unions wins this year for insecure workers. After years of pressure from trade unions, April saw the end of so-called Swedish Derogation contracts, which allowed employers to pay agency workers less than those they worked alongside. On the same day, rules requiring employers to supply a written statement of employment particulars to all workers on their first day of work, not just employees, came into force. 

The TUC worked with employment agency body the Recruitment and Employment Confederation (REC) to produce a factsheet to make more agency workers aware of the changes, and to inform them of the rights that they already had.

The TUC responded to a government consultation on proposals to require minimum notice for shifts and compensation for cancelled shifts.  We insisted on robust rights in these areas but warned that an effective regime would require a ban on zero-hours contracts and the right to request a regular hours contracts.

We also noted that, in order to further protect the interests of vulnerable workers, trade unions need to play a larger role in the economy and began discussions with ministers and officials to make these points in the context of a potential employment bill.

2.7 The living wage, low pay, the national living and minimum wage, sick pay, and the labour market

The TUC has continued to make the case for a higher minimum wage, with all workers paid at least £10 an hour. Following submissions by the TUC and affiliates to the Low Pay Commission, the government announced an increase in the headline rate of the national living wage (NLW) to £8.72 an hour from 1 April 2020, a 51p increase that took the rate to 60 per cent of median earnings. Following union campaigning, the government also announced a new target for the headline rate of the national minimum wage (NMW) to reach two-thirds of median earnings by 2024, and a phased reduction of the minimum age for claiming the higher NLW rate from 25 to 23 in April 2021, and subsequently to age 21.

The TUC has continued to contribute to the work of the Living Wage Foundation, promoting the voluntary living wage as a minimum rate for the lowest-paid workers. TUC General Secretary Frances O’Grady sits on the Living Wage Commission, which sets the rate of the living wage. The TUC has supported the Commission’s global living wage work, and its Living Hours campaign alongside a living wage.

2.8 Special feature: Industrial strategy, environment, energy, science and technology, sustainability and defence The TUC’s focus has been on a sustainable industrial strategy and on building back better after the Covid-19 crisis, highlighting the importance of an economic stimulus for a just transition to a net-zero carbon economy. We argued for an approach that promotes procurement through UK supply chains, building UK manufacturing capacity and jobs. The A Better Recovery report and the TUC’s wider work has also continued to make the case against outsourcing, including in the finance sector, in line with resolution 32. TUC activity in this area has been guided by resolution 1, resolution 2, composite 2, resolution 6, resolution 8 and resolution 11. The TUC has also embarked a major report on a just transition for the regions and nations of the UK. Evidence was taken from union officials in the North, North-West, Midlands, and Yorkshire and the Humber regions of the TUC, as well as from officials at the Wales TUC. This report highlights the specific just transition needs of different communities across the UK. Throughout our work on a just transition, we have highlighted the important role for the public sector in managing the move to a net-zero carbon economy. In December 2019, the TUC was represented at the COP25 UN climate change summit in Madrid, where we formed part of the ITUC delegation. Working with the Italian trade unions, the TUC has been planning a significant trade union contribution to COP26, to be held jointly by the UK and Italy. COP26 has now been postponed until November 2021, because of Covid-19, but trade unions continue to meet at the international level to coordinate our input to this make-or-break summit.  The Trade Union Sustainable Development Advisory Committee (TUSDAC) has continued to meet during this Congress year. Highlights include a meeting with the Director of Clean Growth at the Department for Business, Energy and Industrial Strategy, Tim Lord. The TUC has contributed to Labour’s green recovery consultation. TUC Deputy General Secretary Paul Nowak and Northern Regional Secretary Beth Farhat have served on the IPPR’s Environmental Justice Commission, from which they argued the case for a just transition to a net-zero economy.

2.9 Creative industries

TUC work on the creative industries during this Congress year has been guided by resolution 12, resolution 27 and composite 16.

The TUC has attended quarterly meetings of the Federation of Entertainment Unions, to ensure that our work complements that of unions in the creative sector.

We worked closely together on pressing for support for the self-employed and additional funding to help the industry through the coronavirus crisis.

2.10 Pensions

Over the year, the TUC has continued to be the leading advocate for the interests of working people in the occupational pension system.

The TUC has been a strong voice for public sector workers, in line with composite 14. We condemned the government’s decision to suspend the public service pensions valuation process, which would have delivered improved pensions for workers. We also welcomed the Supreme Court ruling that changes to public sector pensions were discriminatory.

TUC officers met with Treasury officials to establish a process involving unions for developing measures to remedy age discrimination on a scheme- by-scheme basis. The TUC has lobbied government to restart the valuation process, ensure that no workers should be worse off as a result of remedy, and make sure that increased pension costs as a result of reduced discount rates are centrally funded. The TUC has also organised roundtable meetings to allow unions to engage directly with HM Treasury.

In response to Covid-19, the TUC engaged with the Pensions Regulator over regulatory easements to help employers cope with short-term financial pressures. The TUC has also written to the pensions minister to outline several concerns and seek assurances that auto-enrolment will not be suspended for any employers.

Across the year the TUC has continued to advocate to improve pensions for the low paid. This has included briefing around the Pension Schemes Bill to scrap the auto-enrolment earnings threshold and lower the age threshold, and increase minimum contribution rates. The TUC has also participated in a working group to develop and advocate for a solution to the tax anomaly that means many low-paid people do not benefit from tax relief.

We continue to support defined benefit provision. This has involved lobbying against plans for for-profit superfunds to consolidate schemes, and coordinating efforts to prevent new funding requirements encouraging employers to close schemes.

In line with resolution 43, the TUC has highlighted the discrimination in state reciprocal arrangements that deny state pension increases to many workers who live abroad in retirement.

The TUC’s annual pensions conference in March had to be cancelled because of the coronavirus pandemic, but we have sought to maintain engagement and profile on these issues throughout this period.

2.11 Workers’ capital, corporate governance and executive pay

In November, the TUC published a report jointly with the High Pay Centre, puncturing the myth that shareholder primacy is justified by shareholders carrying the greatest risk in companies. The report’s analysis of dividends and share buybacks paid by FTSE 100 companies between 2014 and 2018 showed that companies protect and increase payments to shareholders, even when company finances are struggling. It also found that returns to shareholders across the FTSE 100 rose nearly seven times faster than the median wage for UK workers.

The Corporate Insolvency and Governance Act passed through Parliament in May and June. The TUC liaised with unions, the Department for Business, Energy and Industrial Strategy (Beis) and the Labour Party to feed in union concerns about workforce interests.

The TUC has continued to coordinate Trade Union Share Owners (TUSO), an initiative bringing together union funds to collaborate over voting and engagement with companies. The TUC is an active member of the International Trade Union Confederation (ITUC) Committee for Workers’ Capital and participated in its annual meeting in September.

We coordinated feedback from global unions to the Workforce Disclosure Initiative’s (WDI’s) proposed methodology for company workforce disclosures. 

Our work on building a fairer post-Covid-19 economy has included the case for workforce voice in corporate governance, reform of shareholder primacy and wider corporate governance reform.

2.12 Migration

The TUC continues to call for a rights-based approach to migration to stop divide-and-rule undercutting, and to ensure all workers have dignity at work and decent jobs, regardless of immigration status. In October, the TUC held a roundtable with unions on the hostile environment and Windrush to develop union strategies.

In February the TUC expressed concern that published government proposals for a new points-based immigration system would introduce new time-limited visas for EU workers that would make them more vulnerable to exploitation.

The TUC used its position on the Home Office National Advisory Group to call for the new immigration system to enable all workers to claim employment rights, regardless of immigration status, and scrap the hostile environment legislation. We also continued to call for the Overseas Domestic Worker visa to be reformed to enable workers to change employers after six months to prevent exploitation.

In May, the TUC called on MPs to oppose the Immigration and Social Security Coordination Bill, which would remove EU citizens’ right to live, work and claim social security and healthcare in the UK, thus making EU workers more vulnerable to exploitative treatment as they would be at risk of losing their immigration status and ability to claim rights.

2.13 Decent work and supply chains

In October, the TUC discussed best practice on how to protect workers’ rights in supply chains with affiliated unions, global federations and others. The seminar looked at global framework agreements and the emergence of mandatory human rights due diligence laws, which the TUC is pushing for in the UK. The TUC and trade union members of the Ethical Trading Initiative (ETI) successfully gained new commitments to a more interventionist strategy, including the ETI agreeing to lobby for ratification of International Labour Organization (ILO) standards.