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Charles Villiers, who has recently retired as Chairman of the British Steel Corporation, on his experience of trade-union powerCharles Villiers
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Vol. 2 No. 16 · 21 August 1980

Charles Villiers, who has recently retired as Chairman of the British Steel Corporation, on his experience of trade-union power

Charles Villiers

No one could read Sir Denis Barnes’s book, Governments and Trade Unions,* without a sense of deep depression. He himself foresees that a ‘continuation of the existing relationship between governments and the trade-union movement … could have unpredictable political consequences’. So could a discontinuity! Mr Harold Macmillan is fond of recounting how kings, barons, soldiers, landowners, industrialists and bankers have all in time been diminished by our institutions, and he speculates that trade-union leaders will go the same way. For my own part, I share the widely held belief that the trade-union leadership and its bureaucracy has got itself into a jam. As the Barnes book repeatedly says, they have failed to deliver what they had promised to government. They press their claim to be consulted, indeed to approve government policy, but are then unable to carry out their side of the bargain. This cannot go on for long, because the demand for reform will rapidly intensify in the period of dynamic industrial change in which we are now caught up. This is why trade unions in Britain require self-reform, and a new role. Was it not Sir Thomas More who predicted in the 16th century that if the Catholic Church did not reform itself from within it would be reformed from without? And so it was.

One of my proud possessions is a copy of the history of the TUC during the hundred years from 1868, given to me by Victor Feather in 1971, and I read there of the soaring prestige of the new unionists in the early days, the struggles against squalor and mass unemployment, for compensation safeguards, and the battles the movement rightly claims to have won. All this success and accomplishment has left a glorious past, but what are the prospects of a comparable future?

I have come to see the professional element in trade-unionism today as a series of businesses, each seeking membership (market share) and dues (revenue) for the sake of prestige (pecking order) and benefits (foreign travel, cars etc). Their concerns are bureaucratic, institutional and political, rather than, as in the past, dynamic and visionary and compassionate. Unions seek to protect themselves and their autonomy through an opposition to job loss arising from essential change, through wage demands far exceeding any equivalent increase in productivity, and by just not wanting to know about the effect of market forces on capacity and costs.

But what about those work-forces which are in a monopoly position, where there is no real competition and costs can be passed on to the unhappy customer? In such cases – hospitals, electricity, gas and water supply, railways and coal – the trade unions, if they can maintain unity within their industry, can exercise enormous clout, and it seems to me that some may for a while get away with it. But as depression deepens, an atmosphere of anxiety will dampen the climate of all negotiations. This will prove an extremely difficult situation, but it won’t go away, however hard we look in the opposite direction. The longer it is left the more damage will be done, and the harder will be the eventual solution.

I have also come to think that much greater understanding of these realities is to be found on the shop floor than among union hierarchies. People there can see how the enterprise is faring: the amount of overtime, investment and stocks all tell a tale of prosperity or failure. It is there that effort, involvement and willingness to change, on the part of the work-force, can save any activity from going down. It is there that good leadership by the Union Branch chairmen and secretaries and shop-stewards can be extremely effective because of their understanding of the need to improve. This element is under-used in our industrial relations – too much power at the centre, not enough ‘say’ at the works. National and regional trade-union officers have a most necessary function of supervision and support, and of co-operation with other unions, but the balance has swung too far away from the members, who are really what matters. Consultation with the shop floor becomes more and more important as the problems of technology, working practices and detailed product improvement become more acute. This consultation tends at present to be dominated by the activists who attend the branch meetings and do the talking, thus exercising their political instincts and desire for prominence or promotion.

In these circumstances, I have been forced back on the secret, independently-supervised ballot, as the essential basis for industrial action – whether it be strike, or change in working practices, or acceptance of new pay and conditions. Management ballots are a last resort to break a deadlock, and should be very sparingly used. But union-organised ballots should be the rule and not the exception, and they should be organised plant by plant.

Having argued for more shop-floor consultation by ballot at plants, I come naturally to the Works Council, which is an established feature in most European countries, where, these last thirty years, it has provided exemplary results and great benefits to work-force and management. In the British Steel Corporation also, Works Councils are well-established. They vary in popularity and usefulness, but they are an accepted part of the scenery, although limited in what they can discuss and do. This is because union bureaucracies fear that they might erode the authority of the unions themselves. The BSC Works Councils may not discuss pay, for example, because this is reserved for negotiation by General Secretaries. Recently, however, closure terms have been negotiated with only minimal reference to national officers. This is a loose, unorganised and unsatisfactory state of affairs, but it probably pays the professional trade-union leaders to keep it that way, even though there is evidence that union members would more and more prefer to be in charge, as far as possible, of their own destinies.

The desire for self-expression and control by the work-force of individual plants is certainly not new, and it has provided some pretty strange results in the past. I do not believe it should be given full rein – certainly not without procedures for balloting, and not without the knowledge of the national and regional union officers. But it would provide a second channel of expression for the hopes and fears of the work-force, who would thus find more involvement in their work. It would also do something to counteract the alienation which so many feel from the interests of trade unions at national level and of management.

But Works Councils, elected by the workforce, and the use of the ballot, would not have a secure position without the support of the law. Trade unions, of course, want to be above the law – everyone would like to be above the law, and in the past some have for a while succeeded in this – and the trade-union bureaucracies will fight to protect their immunities and struggle to get more: but that is no reason why we should give way to them. It is, in fact, increasingly clear that the electorate will insist on a further restriction of existing immunities as the oppression of picketing destroys more and more jobs. But what form should trade-union law take?

What we have now is a patchwork affair put together by governments of all persuasions, difficult to interpret and lacking firm principles. We should, I believe, borrow from the European experience. The principle there is that workers have legal rights in the enterprise, exercised through the Works Council. These rights cover legal minimum standards of pay and safety and environmental conditions, and they are policed by the Works Council. Fulltime trade-union officers are invited in to help, but the plant or the enterprise is the domain of the legitimised Works Council. The Works Council and Co-Determination laws in Germany cover a wide field and have been constantly updated over the past twenty-five years. The laws emphasise a ‘commitment to peace’, and a limitation on the time and subjects for open warfare. The law says that conditions adverse to the work-force are to be minimised. Time is specified for reflection or retraction. The law creates a climate of predictability which allows orderly change to take place. As a result, the prevailing style of industrial relations in Germany is co-operative; in Britain, sadly, the prevailing style is adversary.

One must now ask what chance is there in Britain of moving away from our present self-destructive position, towards the more co-operative stance which we find in many European countries, to say nothing of the much more successful systems which operate in the USA and Japan. The economic prospects at the old, heavy end of British Industry are now very bleak. The steel-using industries, particularly engineering, our largest industry, are in decline. Much of their former business has gone for ever; new business and product development take time and we don’t have much time. Both work-force and management are in many instances fed up with ‘as is’, but don’t see how to get out of it. We glare from our trenches, barking the old battle cries to keep our spirits up.

The dynamic which will bring about change lies in the understanding which is now growing between work-forces and managements in individual plants and shops and factories. This understanding focuses on the development or survival of those plants. Everyone wants to keep going and get more investment; the awareness of competitive costs, quality and service is there. It is to this tune that trade unions must dance if they are to oblige their members, and it is observable that, if members of trade unions want something enough, the trade-union bureaucracy has to comply.

The next step, it seems to me, is to accept the dynamic of the plant, and to identify the needs of work-force and management through their attitudes towards their work, their unions and each other. Much of this has been done already, but in too generalised a way. Regional differences will have to be taken into account, and the question of attitudes will need to be closely defined. But there are excellent existing facilities for doing all of this. The conclusions should then be concorporated in an action programme: too many reports collect too much dust on too many shelves.

The action should be directed at reconciling the needs and hopes of work-force and management, irrespective of their activist representatives, who too often have special interests motivating them. The reconciliation should then be made the basis for an industrial relations code of conduct which, after long debate and consultation and perhaps a referendum, would be given the force of law. It would have to be faced from the beginning that the trade-union leadership and bureaucracy would oppose any change which eroded their position as it stands at present, largely outside the law. They would also oppose the second channel of legitimacy represented by elected Works Councils. But no change or improvement comes without opposition from those whose position is likely to be disturbed, and this is where the influence of the membership, and indeed of the electorate, will have a vital role to play.

None of this could be achieved in normal times because the inertia would be too great to overcome. But we are moving into abnormal times, when the struggle for industrial survival becomes almost daily more acute. In such circumstances, the British have always been prepared to look at new ideas, to adjust, adapt and change in order to meet perceived threats to their survival. We are an extremely independent-minded people, and we are not going to be told what to do all the time by anybody. But I believe we are now ready for involvement, and for a degree of participation, along a road which other nations, recently more successful than ourselves, have travelled with good results.

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