How Rayner’s plans to turbocharge unions would wreak havoc on Britain

Experts say changes to the rules on industrial action, combined with rising taxes and increased regulation, will put investors off the UK

Those who worry the Labour Government is already pandering to the unions have been given fresh cause for concern by Angela Rayner, the Deputy Prime Minister, vowing to repeal “ideological, ineffective anti-union legislation”.
The Government’s new Employment Rights Bill would lift restrictions and mean that unions will have twice as long to strike after an initial ballot – from six months to a full year. What’s more, industrial action will require only a simple majority, with the requirement for 50 per cent turnout being scrapped.
Critics warn that boosting the power of the unions risks crippling the British economy and is perverse given that industrial action has spiked in recent months. 
In practice, the changes would leave public services such as schools and hospitals, along with private firms, facing uncertainty for a year following a successful ballot.
“Doubling the already generous six-month window for strikes will simply extend the sword of Damocles which unions can wield,” says Andrew Griffith, the shadow secretary of state for science, innovation and technology (and former chief operating officer at Sky).
“In schools, for example, we’d see a whole academic year of disruption at a time. Labour talk growth, but the only growth will be in strikes and the number of businesses fleeing Starmer’s Britain.”
The new Government insists that Rayner’s changes simply reverse Conservative reforms that were “ideological” and “ineffective”. Rayner has said that the Bill will help businesses. But City figures fear the changes to union laws will deter investment in Britain.
“Incentives matter,” says one businessman who sits on the boards of several UK companies. “When you add together rising tax and increased regulation with the greater employee protections and more powers for the unions, it all begins to paint a picture of a country in which it is going to be harder to make a return on your investment. 
“For a long time, our frame of reference has been other European countries. But really we need to be comparing ourselves to the US and the fast-growing economies of the Indo-Pacific because that’s who we are competing with for inward investment. 
“It’s been accepted since the reforms of the 1980s that the UK’s flexible and dynamic labour market has been an important driver of the UK economy, but we seem to be forgetting that.”
The new legislation comes in the wake of recent offers made by the Government to striking doctors and train drivers, which employers fear will up the ante for future demands by unions. Those pay deals were, crucially, not accompanied by any requirement that unions improve productivity. 
Len Shackleton, a professor of economics at the University of Buckingham and a research fellow at the Institute of Economic Affairs, a free-market think tank, warns that the new rules could result in a proliferation of “guerrilla” strikes by workers. He points out that taking industrial action today is typically less gruelling for workers than when the miners went on strike in the 1980s, making significant personal sacrifices to forgo wages for weeks and months at a time in an attempt to secure better conditions. 
Today, unions can hold one-day strikes that are designed to cause the maximum amount of disruption but those walking out can very easily make up their pay by working overtime. Between July 2022 and August this year, Aslef, the drivers’ union, carried out 18 days of strike action, which repeatedly brought much of the rail network in England to a standstill – causing disruption in the days leading up to and after the strike itself. 
Shackleton, the author of the recently published booklet Unions Resurgent? The Past, Present and Uncertain Future of Trade Unions in Britain, worries that the new rules will mean unions will be able to threaten similar action for longer. He is also concerned that enhancing the power of trade unions, combined with new employment rights, will make it much harder for the Government to improve “the pitiful level of productivity in the public sector”.
The original rationale for the six-month cap, introduced during David Cameron’s premiership, was that unions were at times threatening strike action on the basis of ballots that had been held years before. In an impact assessment paper produced ahead of the 2016 legislation, the Department for Business, Energy and Industrial Strategy cited the Public and Commercial Services Union’s decision to strike in October 2014 as the result of a ballot held in March 2013. 
The then government also pointed to the National Association of Schoolmasters Union of Women Teachers, which walked out in October 2013 based on a mandate from November 2011, nearly two years earlier, and members of the National Union of Teachers joining the picket line in July 2014 based on votes held in June 2011 and September 2012. 
Tory ministers argued that these large gaps between the bang of the ballot vote and the flash of industrial action created prolonged periods of uncertainty. They further reasoned that large changes in the circumstances of workers between the ballot and strike action, and indeed the make-up of the workforce, may have occurred during the intervening period. The six-month limit was designed to ensure that, if industrial action took place, it did so on the basis of a “contemporary mandate”. 
Unions argue the new 12-month mandate will give both sides more time to negotiate. “As we saw with the draconian – and ill-designed – minimum service level legislation, restrictive laws on industrial action serve only to exacerbate tensions and prolong disputes,” says Paul Nowak, the general secretary of the Trades Union Congress.
Gregor Gall, a professor of industrial relations at the University of Glasgow, believes this is not wholly true. He says the removal of the six-month re-balloting requirement will undoubtedly save unions time, money and energy. However, he argues it may come at a cost in terms of reduced legitimacy to their mandates and the opportunity to further organise and mobilise their members. 
“The irony with this requirement – along with others in the Trade Union Act 2016 over turnout and voting thresholds – was that employers were less willing to challenge the legitimacy of mandates for action, especially through legal action,” says Gall.
It is possible, therefore, that the changes lead to a greater number of legal disputes over individual strikes.
The business community is eyeing developments warily. Matthew Percival, the future of work and skills director at the Confederation of British Industry, points out that, just as employment law exists not because all employers treat their staff badly but because a small minority might, trade union legislation is also important. But, at the moment, companies are facing stricter rules, while those governing the unions are being loosened.
“The key to ensuring the Employment Rights Bill is both pro-business and pro-worker will be putting workplace democracy at the heart of collective representation, so that industrial action is a decision with the support of the workforce and not just a vocal minority,” says Percival.
The unions argue that a rebalancing is long overdue. Research published by Cambridge University in August found that collective rights in the UK are far weaker than in most other wealthy countries, a situation that was exacerbated with the introduction of new anti-union legislation introduced by the Conservatives in both 2016 and 2023.
“The UK is an international outlier when it comes to worker protections,” says Simon Deakin, a professor of law and director of the Centre for Business Research at Cambridge University. “Our labour laws are significantly less protective of workers’ rights than the average in the developed countries which make up the OECD.”
Deakin argues that this gap is “particularly marked” in laws on working time, employee representation and the right to strike. “Working people urgently need our laws to be brought closer to the international mainstream,” says the TUC’s Nowak. “Worker protections in the UK are much weaker than in many other countries.”
However, free-market economists point out that the UK’s labour laws are part of the reason the country’s economy is more resilient than those in the eurozone. They also point to the US, where employee protection is even weaker than in the UK and the economy even more dynamic. The worry is that the UK government now appears on track to follow the wrong example. 
Len Shackleton says that a lot of Labour’s planned changes to workers’ rights “are quite marginal”. “However, combine them with greater powers for the unions and I worry we have a boiling frog situation: it’s hard to argue against each incremental addition to employee protection and then – clunk – we suffer a big recession that is harder to escape because our labour laws have become a lot less flexible.”