Unions turn the screw on business with new rights

Companies wanting to win government contracts will be told that they must promote trade union membership, The Times has learnt. 

In the latest sign that ministers are bowing to the unions’ agenda, businesses seeking a share of the £115 billion on offer to deliver public services will be told today that they must demonstrate how they will “build good relations” with unions as part of their contract bids. Employees working on government projects in the private sector must also be given training if they do not have basic literacy and numeracy qualifications. 

Public-sector contracts have become a significant part of the economy, accounting for nearly 6 per cent of the gross domestic product and directly employing more than 1.2 million people. Many larger firms that undertake government contracts do deal with unions but smaller contractors such as those who operate care homes do not have unionised staff. 

Union membership has halved over the past 25 years. Today’s announcement comes after Unite, Britain’s biggest union, gave guarantees underwriting Labour’s accounts.

A joint statement between ministers, trade unions and business leaders will be delivered in Downing Street this morning. The new requirement will apply to public-service delivery contracts awarded by central government rather than to suppliers of equipment or other goods. 

Privately, business leaders have admitted that there is little the Government can do to force companies to comply with the obligation once a contract has been awarded. Senior figures have even suggested that they are gambling on Labour losing power before the proposals come fully into effect. 

Negotiations on the joint statement, which have taken more than a year, have been led by Ed Miliband, the Cabinet Office Minister. Yesterday he attended a meeting at the Trades Union Congress headquarters, where union leaders attacked him for not doing enough to help contract workers. 

The move comes as Britain faces another wave of strikes over below-inflation pay increases. Thousands of schools are set to close tomorrow and rubbish will pile up in streets as up to 600,000 town hall workers go on strike for 48 hours. 

The move also comes two weeks before Labour’s National Policy Forum, where Gordon Brown is expected to come under pressure over policy demands from unions who have provided about 90 per cent of Labour funding in the first quarter of this year. Private donations have shrunk to a tenth of their level last year. 

Mr Brown insisted yesterday that he was not bowing to union demands. “I have made it absolutely clear we are not returning to the 70s or the 80s, we are not returning to the days of secondary picketing, we are not returning to trade union legislation which is written by trade unions themselves,” the Prime Minister said. 

However, Labour’s dire financial position has put him under pressure. Joe Irvin, John Prescott’s former adviser, was appointed last month to the key role of political secretary in Downing Street in a move that many union members welcomed. continues here

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