“MYour sister is a care worker. He was a care worker during the pandemic. Fourteen hour shifts, usually overnight. Unimaginable pressure. And the reward? It’s a struggle every week – and I mean every week – just to get through.”
So Keir Starmer said last month, drawing the experience close to home in his party conference speech to highlight his determination to overhaul the cash-strapped social care sector.
At the heart of Labour’s plans to do so, is a radical proposal for state-backed collective bargaining that would mark a departure from decades of declining trade union power in the UK.
When Margaret Thatcher came to Downing Street in 1979, more than 70% of workers were covered by collective agreements, negotiated with trade unions. By 2019, that had dropped to just over a quarter.
Starmer has not promised to bring back “beer and sandwich” summits with unions if elected next year in No 10, but Labor has a clear commitment to increasing its role in public life – strongly backed by his representative, Angela Rayner, a former union organizer herself. The party’s “new deal for workers”, the details negotiated with the unions, includes a long list of policies aimed at increasing employee power.
The UK’s underfunded, overstretched social care sector is the testing ground for a key element of the package: the use of “fair pay agreements,” to raise wages and conditions for workers with little bargaining power. .
The government has already promised a series of reforms to the social care workforce, including a new career structure; but as a report by the National Audit Office (NAO) pointed out this month, it has been delayed by political turmoil at the top of the Conservative party.
Sector statistics tell a stark story of staff shortages and poverty pay: a recent Skills for Care report points to 152,000 vacant posts, and an average hourly wage which is £10.34 in private care. The staff turnover last year was 28%.
“It’s not because people don’t want to do the work: they love it, but the pay and terms and conditions are so poor that people feel undervalued and forced out,” said Natalie Grayson, the GMB national organizer for the care sector.
Meanwhile, ministers are increasingly looking to bridge staffing gaps with overseas workers. The Home Office has issued 78,000 visas for care workers in the year to June 2023 – accounting for more than a third of all long-term work visas. There have been repeated warnings that many of the staff face exploitation – and their arrival has been a key driver of the UK’s record net migration.
Part of Labour’s planned solution is a new state-brokered agreement on social care pay, terms and conditions, which it hopes will attract more UK-based staff, and help stem the exodus. from the sector.
Many are riding on the policy. The shadow health secretary, Wes Streeting, sees it as central to tackling the parlous state of social care – which in turn has significant knock-on effects for the NHS. A Labor source described the overhaul of social care as “mission critical”.
For unions that support the workers, this first agreement on equal pay will be a “proof of concept” that they hope can be replicated in other low-wage sectors.
But despite the importance of the policy, few details have been ironed out: which unions and employer groups will sit at the table, or which issues will be covered, for example. However, Labor said it would consult closely if it came to power.
The broad approach is for the government to unite unions and employers to eliminate the minimum wage, as well as policies such as wage increases.
Once an agreement is reached, the government will give it statutory backing – so it can be applied across what is a fragmented workforce, with many thousands of individual employers. That would give unions a lot of power, in a sector where it is difficult to recruit and organize members.
Labor sources have acknowledged that there will be a direct impact on the public purse, by increasing the cost of providing taxpayer-funded care – but the party is not expected to fund such an increase in its manifesto.
Ben Zaranko, of the Institute for Fiscal Studies, suggests that a rough estimate would be £1bn-£1.5bn a year for every £1-an-hour increase in social care wages – even if the different nature of the workforce means it is difficult to calculate.
Social care employers have posed an important question: is Labor prepared to fund the cost of any increase, given that an estimated 50% of social care is funded by the state? Some providers have warned that the 10% increase in the statutory living wage announced by Jeremy Hunt in last week’s autumn statement will already strain their finances.
Chiara Benassi, of King’s College London, an expert on employment relations, says that the equal pay agreements seem like little policy by European standards. “The UK has the lowest standard of workers’ rights in western Europe. Equal pay agreements are the most modest proposals the Labor party can make.
The Organization for Economic Cooperation and Development recommends collective bargaining in a recent report “to help promote a broad sharing of productivity gains, including among those at the bottom of the job ladder, providing voice of workers and give employers and employees a tool for solving common challenges.”
On the difficult question of who will sit on the employers’ side of the table, Benassi said that equal pay agreements should give sector providers the incentive to find a collective voice.
Since the decline of collective bargaining in the UK, he says, employers’ associations have withdrawn from the lobbying role. “It’s really an opportunity for them to raise their profile.”
Even when the participants are identified, however, the negotiation process cannot be straightforward. Labor has not clarified the precise role it is expected to play – whether ministers will be expected to be in or out of the room, for example.
The grueling process of this year’s NHS pay settlement talks – the biggest collective agreement in England, covering hundreds of thousands of staff – shows that unions can be at odds with themselves over the right way forward.
A similar policy, also called equal pay agreements, was introduced by Jacinda Ardern’s Labor government in New Zealand, and is intended to apply to a large part of the economy. But the relevant legislation was finally passed a year ago, and the new government led by the National party promised to withdraw it.
Since the law was passed, Richard Wagstaff, the president of the New Zealand CTU union, explained, half a dozen sectors have started working towards equal pay agreements, but “only one has reached the table on bargaining: bus drivers. I’m the lead proponent of this, and we’ve just started bargaining.”
He added: “We will continue until the law is changed; but it is not very positive.
A lesson for the UK Labor Party, Wagstaff suggests, is to push ahead with implementing its own version of policy earlier. “The key is to move reasonably quickly, so that it can be built and embedded before the next general election.”
However, given the many important practical questions that remain unanswered, it is unclear how realistic this is.