Labour Research September 2016


Leadership candidates set out their stalls 

Labour Research puts seven questions on a range of issues of concern to unions and their members to the two candidates for the leadership of the Labour Party.

Jeremy Corbyn was elected as leader of the Labour Party, beating three opponents, with nearly 60% of first-preference votes, less than a year ago. 

However another leadership contest was sparked after a wave of front bench resignations, following his sacking of the shadow foreign secretary Hilary Benn and a 172-140 vote of no confidence by Labour MPs in June. 

Former shadow business secretary Angela Eagle formally triggered the contest by launching a leadership challenge in July, but then stood aside leaving former shadow work and pensions secretary Owen Smith as the only challenger.

Thousands of trade unionists who are members or supporters of the Labour Party now have a say in who will be the next leader, so Labour Research contacted the two candidates to ask them seven questions about key issues for union members. 

The two candidates’ responses are set out below. In order to ensure fairness, their answers start off in alphabetical order and then alternate so that neither candidate’s views are given particular prominence.

EU referendum

Q1. Many of those in traditional Labour heartlands voted leave in the recent EU referendum. Under your leadership, how would the Labour Party reach out to those voters who feel alienated from politics and left behind by globalisation and economic and cultural change?

Jeremy Corbyn: The vote to leave in Labour’s heartlands represented a dramatic rejection of the status quo in British politics. There is a direct relationship between an area voting leave and higher than average unemployment and long-term worklessness. 

Business as usual is no longer an option: we need a government committed to delivering the investment and industrial strategy that will rebuild and transform Britain to ensure no one and no community is left behind. 

I am calling for a £500 billion investment programme, focusing on bringing infrastructure across the country up to world-class standard, and backed up by a new National Investment Bank and regional development banks in order to deliver one million good, secure jobs. 

Owen Smith: Millions of people no longer feel they hold a stake in society. Too many young people are worried about their future. And older people feel the country they’ve known all their lives isn’t what it was. 

The vote on 23 June didn’t cause this crisis, it was a response to it. A response that said that our country needs rebalancing and the UK economy needs re-industrialising.

It’s not enough for us to be anti-austerity: we need to be pro-prosperity. Under my leadership Labour will deliver a British New Deal, investing £200 billion to create jobs, repair roads, upgrade our schools and hospitals and transport infrastructure, and build 300,000 new homes every year. 

UK-EU relationship

Q2. What approach should the current government take in response to the Brexit vote? What kind of political, economic and trading relationship should it seek to negotiate with the EU and should this involve continued freedom of movement?

Owen Smith: The Bank of England announced emergency measures in response to Brexit — record low interest rates. This monetary stimulus needs 
to be combined with an urgent fiscal stimulus. 

As part of my £200 billion British New Deal, I’m calling for £20 billion on shovel-ready projects. The government should announce this in the Autumn Statement, if not before. But we need a strong Labour Party to argue for this.

Invoking Article 50 sets us on an irreversible deadline. The Tories shouldn’t invoke it right away. It was a mistake for Corbyn to call for this the day after the referendum. I won’t give the Tories a blank cheque to scrap workers’ rights and environmental protections as the price for Brexit.

Under me as Leader, Labour would campaign for a second referendum or general election on the terms of Brexit. 

Jeremy Corbyn: It is critical that the ongoing uncertainty and future negotiations over Brexit do not damage the rights or livelihoods of workers in Britain. I will not support any negotiations or pre-negotiation that restricts freedom to trade for UK business in the EU, or EU businesses to trade here; no UK citizen in the EU, or EU citizen in the UK, should have their rights affected; and existing EU protections, the UK’s share in the European Investment Bank, and the right of financial services to win business across the EU must be maintained. 

We cannot accept any attempt to turn the rights of EU citizens presently living and working here into some sort of “bargaining chip”, as senior Tories have irresponsibly hinted at. Their rights must be defended. 

Collective bargaining

Q3. Fewer than one in three employees in the UK (27.9%) now have their pay set by collective bargaining and just one in six (16.1%) in the private sector. This is much lower than in other European countries, with the EU average at around 60%, and some seven percentage points lower than 10 years ago. Does this matter? And if it does, what will you do about it as Labour leader?

Jeremy Corbyn: Collective bargaining rights have been weakened over the decades. The result has been the shrinking of workers’ share of national income to a record low, which in turn damages wider economic growth while real wages have declined by a shocking 10% over the last decade. 

I would as leader seek to restore collective bargaining as the fundamental protection at work, and a vital corrective to otherwise untrammelled power of employers that can leave workers open to abuse.

I have called for collective bargaining agreements to be made compulsory for companies employing more than 250 workers and would seek to introduce sectoral collective bargaining as this would make for a decisive step in favour of restoring a fair balance in the workplace. 

Owen Smith: Evidence shows that workforces covered by collective bargaining are better paid, safer, more equal and productive and have better industrial relations. 

My Manifesto for Fairness at Work includes establishing a Ministry of Labour to drive up collective bargaining and setting up modern Wages Councils in retail, hospitality and social care, so that collectively-bargained terms and conditions apply to all nine million workers in those sectors.

It includes providing incentives for collective bargaining in other sectors, with legislation to ensure that jointly-agreed rates are universally applied to prevent undercutting, restoring full collective bargaining and ending pay freezes in the public sector. 

Trade Union Act

Q4. The 2016 Trade Union Act (TUA) is the latest anti-trade union law to be brought in by a Conservative government. Would you legislate to remove all or any of the previous restrictions on trade union activity introduced under Conservative governments: on picketing, secondary action, balloting for industrial action and the sequestration of union funds?

Owen Smith: Yes, I would start by repealing the TUA. I would repeal the legislation allowing the sequestration of union funds and ensure that all trade union legislation, including that on picketing and secondary action, is amended to comply with international labour standards.

I would remove unfair obstacles to industrial action and introduce e-balloting to increase participation.

I would strengthen the law to provide for recognition where majority support is clear and end the use of “sweetheart” unions to block recognition. And I would provide mandatory access to workplaces for unions where requested by workers. 

Jeremy Corbyn: I and Labour are implacably opposed to the TUA and will repeal it once the next Labour government is formed. 

I backed John McDonnell’s Lawful Industrial Action Bill in 2010, which would have prevented employers using the courts to block lawful industrial action on the basis of minor technicalities. 

I support an amended form of secondary action, where there is a close link to the original dispute, and of course oppose the sequestration of trade union funds. 

Worker exploitation

Q5. Under your leadership, what action would a future Labour government take to reverse the trend of rising casualisation and tackle poverty pay, zero-hours contracts, false self-employment, agency working and other forms of exploitative work practices?

Jeremy Corbyn: Recent scandals at Sports Direct and BHS, among others, have revealed the shocking ways in which unscrupulous bosses can exploit the weak protections offered to workers in British labour markets. To combat this, I have called for a New Zealand-style ban on zero-hours contracts, which would make specifying minimum hours compulsory in any contract, and provide for “on call” payments where employers want to hold the option of extra hours worked. 

I would also seek to clamp down on false self-employment and agency working through tightening up existing employment law and strengthening trade union rights.

We must move away from an economy where cheap labour substitutes for investment in capital. I have called for a £500 billion multi-year investment programme (see response to question 1) to drive investment and create the high-skilled, high-wage jobs in an economy where no-one is left behind.

Owen Smith: I would introduce employment rights from day one and enhance the legal definition of “worker” to cover agency and casual workers. 

I would outlaw bogus self-employment and exclusive foreign recruitment, ban zero-hours contracts, introduce compensation for cancelled shifts, require that all workers receive a statement of rights, pay, hours, living and average wage, and abolish Employment Tribunal fees. 

I would also tackle low pay by immediately raising the minimum wage to £8.25 an hour, rising to £10 by 2020, for everyone over 18. 

I would turn the Low Pay Commission into a Living Wage Delivery Unit and establish a High Pay Commission to force the mandatory reporting of 
company pay ratios. 

Finally, I would introduce new Equal Pay legislation to close the gender pay gap and reintroduce discrimination questionnaires. 

Corporate governance

Q6. In the wake of the collapse of retailer BHS, how should the pension funds and governance of private companies be better regulated?

Owen Smith: There was a high level of corporate irresponsibility and incompetence at the heart of BHS’s leadership. Green’s greed cost thousands of people their jobs and put tens of thousands of people’s pensions at risk. 

He should be stripped of his knighthood and make a proper contribution to cover the pension fund’s black hole.

To stop this from happening again we need to give working people a greater voice at work. 

A British institution was asset stripped and steered onto the rocks, while the staff who went on to lose their jobs were not given a look-in. So I’d extend the right to information and consultation to cover all workplaces with more than 50 employees and repeal the undemocratic, unnecessary and unjust TUA (see response to question 4 above). 

Jeremy Corbyn: The collapse of BHS highlighted serious deficiencies in existing company law and corporate governance. 

I have called for a series of reforms to company law and regulations:

• to tighten up the Takeover Code so that all potential buyers must make clear their plans for employees’ pay and pension fund; 

• to outlaw the debt-fuelled takeover of companies by tightening up rules on “financial assistance”; and 

• under my leadership Labour will seek to introduce a “Philip Green Law” that would prevent abuses like Green’s, where excessive debt was used to pay out dividends. 


Q7. Following the events at Tata Steel in Port Talbot, what should the government be doing to support and protect skilled manufacturing jobs?

Jeremy Corbyn: The crisis in British steel exposed the inadequacy of the Tory government’s approach to defending vital jobs and a key strategic industry for the whole economy. To support, protect, and expand the skilled manufacturing jobs that I see as essential to delivering a high-wage, high-skill economy requires three things from government. 

First, government must invest in the future. Our £500 billion investment programme will deliver the infrastructure that is essential to laying the foundations of the future economy. 

Second, this will be backed up by a National Investment Bank and regional development banks with a clear mandate to supply the long-term, patient capital needed by SMEs [small and medium-sized enterprises] and high-potential investments, matched to a 21st century industrial strategy to support existing industries and provide the basis for growth in areas like renewable energy and advanced manufacturing.

Third, it is essential that we reform corporate governance to better focus companies on delivering long-term growth. 

Owen Smith: The long-term decline of our skilled manufacturing jobs has been speeded up by Tory failure and Brexit. 

In 1982 more than one in five employees were employed in manufacturing — now it’s less than one in 10. Skilled and secure manufacturing jobs have been replaced by insecure, low-skilled and low-paid service jobs. 

I want to increase the industrial output of Britain and get us making things once more. I want £40 billion of the £200 billion British New Deal (see response to question 1) to be spent backing the industries and jobs of the future. 

We should be turbo-charging the Green Investment Bank with a massive injection of £15 billion over the next five years.

We need a strong, competent Opposition to fight for a new industrial revolution, to protect manufacturing jobs from further decline and grow the jobs of the future.

Timetable and rules

Labour Party members who were in membership on or before 12 January 2016 can vote in the leadership contest. 

In addition, registered supporters who paid £25 and signed up between 5pm on Monday 18 July 2016 and 5pm on Wednesday 20 July 2016 are also eligible to vote. 

Members of affiliated unions, socialist societies and other affiliated bodies who individually signed up as an affiliated supporter to the Labour Party can also cast a vote.

They must have been a member of that organisation on or before the 12 January 2016 and have signed up as an affiliated supporter by noon on 8 August 2016.

Ballot papers were sent out in the post (Labour Party members only) and by email from the week commencing Monday 22 August. All ballots must be returned by midday, Wednesday 21 September. 

Members will have a choice of returning their paper ballot paper or voting online but should use only one method and a vote will only be counted once.

Because there are only two candidates, eligible electors are asked to place an ‘X’ next to their preferred candidate.

The candidate with the most votes will be the winner.

The result will be announced at a special conference, just before the annual party conference, in Liverpool on Saturday 24 September.