UK Government introduces “anti-strike” bill

I’m sitting in a coffee shop today and staring at London’s mostly deserted street. Yes, it is Friday and no one really goes to the office since Covid. However, even so, today is especially quiet as there are virtually no trains running and workers are therefore unable to commute to work.

Nurses, rail workers, ambulance staff and may others have been striking in the hope of being awarded pay increases that might resemble double digit inflation.

Any person living in the UK – and especially London – knows the cost of living crisis is real. The Government is also aware that a slowing economy means fewer tax returns, more debt to fund the government and – as we’ve seen in the last four months – tax hikes. The disastrous Premiership of Liz Truss showed the limits on unfunded government policies, especially when those revolve solely around tax cuts.

New “Anti-Strike Legislation”

Following widespread industrial action across the country, the UK government announced new legislation to enforce minimum levels of services in eight specific sectors including the NHS.

As a reminder, there was already legislation put forward before Christmas that would have imposed a minimum service agreement on the railways, with employers able to sue unions and sack staff in the event of a breach.

However, the new legislation announced yesterday will supersede the one introduced last December and will impose “minimum safety levels” on multiple sectors. The proposed legislation is therefore not limited to railways.

The government said it would enforce these arrangements on ambulance, fire and rail services after a public consultation.

Ministers are hoping that voluntary agreements on minimum safety levels on sectors such as education, border security, nuclear decommissioning or other health and transport services will be reached.

But if voluntary deals cannot be achieved, the government proposes to step in and impose such arrangements.

According to the government, “the government has a duty to the public to ensure their safety, protect their access to vital public services and helm them go about their daily lives.” Furthermore, “the government will always protect the ability to strike, but it must be balanced with the public’s right to life and livelihoods.”

Not a done deal

The legislation is likely to be resisted int he House of Lords. In any event, it cannot be implemented until the consultation is completed.

Ministers invited union leaders to “honest, constructive conversations”, urging them to “return to the table and call of strikes.”

Unsurprisingly, unions believe the bill constitutes an unwarranted assault on their rights. Unions are still not over the 2016 legislation that raised the threshold for strike votes to be valid. Paul Novak, general secretary of the TUC, said it was “wrong, unworkable and almost certainly illegal” to force people to work when they had voted for industrial action, adding that unions would “fight this every step of the way”, both in parliament but also in the courts.

Finally, other unions also said that staffing levels in the NHS were almost safer on strike dats than at other times because of local agreements involving employers.

Labour leader Sir Kerr Starmer announced his intention to reverse the government’s legislation if it passed and if he won the next general election.

A plaster but not a cure

This new legislation – should it be passed in its current form – is a tool to pressure unions and nullify some of the ongoing strikes. While it might provide some relief from the news headlines that are not particularly favorable to the government, it does not really address the root of the problem: the cost of living crisis.

With approximately 13% of inflation on basic necessities such as food, industrial action is to be expected. The government is in a tight spot – in reality, inflation isn’t solely the government’s fault. But the tories – and labour to some extent – failed with respect to the following:

1. Quasi-unlimited government stimulus and loose monetary policies during Covid were conducive to inflation. Some might even argue that it’s a simple Fischer equation. I think it’s a little reductive to thing so. Such policies were not the only reason for inflation. Supply side issues following the reopening of the world economy and China’s Covid policy also stoked inflation. And the war in Ukraine caused energy prices to skyrocket (in Europe at least), which fulled inflation. Those risks stemming from “the whatever it takes policies” implemented during Covid could have been highlighted better by governments across Europe. That criticism isn’t specific to the UK government.
2. What’s specific to the UK government is the chaos caused in September 2022 by Trussonomics. A plummeting pound caused imported goods to be more expensive. This already came on top of Brexit which, regardless of yours views, is causing additional paperwork and costs in the short-term (this might not be true in the long run based on future trade agreements). In other words, the UK was importing inflation more than ever.

The UK government should be focusing on longer-term solutions while providing immediate support to households

The UK government should focus on (i) maximizing frictionless trade their closest trade partners and (ii) providing short-term support to shield households from exploding energy bills (which was part of Truss’ plan but ended up being so watered down and came way too late). France and other countries had already implemented “some form of an energy shield”energy shields” – mostly through regulated prices and subsidies. France has one of the lowest inflation rates for 2022. That support should have been available in the UK and there would have been ample wiggle room in the budget if markets had not turned against the government following the disastrous mini-budget.

The New Anti-Strike legislation will not achieve any of this. It’s a tactical way to kill strikes but it won’t fix the cost-of-living crisis.