Labour is a puppet of the unions – Lib Dems must stand up for non-unionised workers

First Published on Liberal Democrat Voice on 3 November 2011

As a member of the Dutch liberal party the VVD who was studying in the UK during the last election, I was pleased that the Lib Dems formed a coalition with the Conservatives. Yet I feel that a strategy that distinguishes the party from Labour is just as important as one that distinguishes the Lib Dems from the Tories.

Instead of stressing coalition differences, the Lib Dems have the opportunity to show that they are a true alternative to Labour for those that consider themselves working class. The Lib Dems should stress that, unlike Labour, they protect ordinary workers by deregulating the labour market, and do not tend to just burden the unionised workforce with extra regulation. Labour unions do not represent all workers (only 26% of all salaried workers are union members (OECD)), nor do they represent the unemployed. Yet the Labour Party is likely to tend to this minority’s needs.

In total 85% of the Labour party’s donations come from the unions. 62.4% of the union members work in the public sector, where 64.5% of the wages are collectively agreed. In the private sector, where 80% of the workforce works, just 16% of the wages are agreed collectively. These unions, despite being relatively small, have a huge amount of political power, not only because they fund Labour, but also though their election of the party’s leader, Ed Miliband. This power means that Labour is more likely to back the labour union member, rather than the majority of the workforce outside the unions.

This can have a devastating effect on the protection of workers outside the labour unions. Many of the workers outside the labour unions are paying for public sector pensions though general taxation. Additionally, many unemployed are not allowed to take the place of unionised workers who are striking.

Most devastatingly, unions are generally in favour of both immigration controls and red-tape, which hamper entrepreneurship, job-turnover, innovation and growth. Growth and innovation bring new jobs outside the unions’ control at the expense of old unionised jobs.

Collective bargaining, and other employment protections makes it expensive to get rid of workers. This not only slows the innovation process which is critical for growth, but again makes jobs more expensive as the entrepreneur takes the possible future cost of firing a worker into account. The entrepreneur will have an incentive to innovate in such a way to avoid these firing cost. This means that shops may choose self-sevice-check-out systems at supermarkets instead of employing more young workers.

To protect the liberties of the ordinary citizens, to allow ordinary workers to be innovative, entrepreneurial, and free from ridiculous regulation, the Liberal Democrats must make sure that they are the party protecting ordinary workers. The Lib Dems should emphasize the fact that the Labour Party is no more than a Labour Union creating a welfare state for union workers at the expense of ordinary workers and society at large.