Brexit offers the best chance for the high-productivity, high-wage economy that workers and their trade unions want

Brexit offers the best chance for the high-productivity, high-wage economy that workers and their trade unions want

Although the process of leaving the EU may take up to two years to complete, attitudes are already changing, inspiring confidence in a brighter future for our economy and the manufacturing sector in particular – something that would have been unthinkable only six months ago.

In spite of their anachronistic attachment to the single market, trade unions are beginning to realise the benefit of being free of the constraints placed upon us by the EU. It is beginning to dawn on them – something that the majority of their members instinctively knew – that advancing the interests of the country and its workforce is predicated on the UK being outside the single market.

The takeover of Opel/Vauxhall by the French company PSA is a good example. In the past, such takeovers would have been perceived as a disaster for the British car industry with real threats of closures and job losses. Instead, there is a lot of optimism. Kelvin Hopkins, the Labour MP in whose constituency the Luton Vauxhall plant lies, described it as a ‘positive development’, calling on the Secretary of State to end Britain’s dependence on importing motor vehicle products and help ‘develop a high value-added production in the supply chain over here in the UK’ and, in the process, bring an end to the grotesque situation in which car parts and components criss-cross the Channel before they are finally assembled into a complete product.

John Cooper, the UNITE representative in Ellesmere Port told the BBC: ‘if they [PSA] want to sell cars in the United Kingdom, they’ll have to build cars in the United Kingdom’. That, he said, was his union policy. Such a demand would be unthinkable if we weren’t heading for the EU exit door for they fall foul of the freedom of movement of goods.

It is a win-win situation in which we keep car manufacturing in Ellesmere Port and Luton, build our component supply chain and, in the process, create more skilled jobs, none of which would be possible given if we were to remain in the single market.

Another glimpse of life after Brexit was gleamed from the proceeding of the House of Lords Economic Affairs Committee. Under the topic of Brexit and the labour market, it heard from Andrea Wareham, HR Director of Pret A Manger, which, she informed the committee, employs 110 different nationalities of whom almost two thirds come from the EU. With only one in 50 applicants being British, she extrapolated that British workers do not want to work in the industry. She went on to make the remarkable statement that wage levels had nothing to do with the reluctance of British workers to apply for these jobs. (Try £30 per hour and watch the applications roll in!).

A similar story of reliance on EU nationals came from Minette Batters, Deputy President of the National Farmers Union, and David Swales, the Head of Strategic Insight of the Agriculture and Horticulture Development Board. When challenged about the industry’s slow progress to mechanisation, Batters and Swales had to accept that the ease with which cheap labour can be sourced from Eastern Europe has diminished the incentive to invest in state-of-the-art robotic machines anywhere near the level of, say, the mechanisation in Australia, where migrant labour is highly controlled.

Over its long history, restricting and regulating entry to a profession or a trade have been significant weapons employed by trade unions to protect standards and improve members’ pay and conditions. Such restrictions range from the enforcement of minimum qualifications as in the case of, say, school teachers to the simple but effective closed shop as in the case of Equity, without which actors and musicians would not be able to make a living out of their chosen profession.

As we exit the EU, the supply of cheap labour from the EU will begin to dry out and the price of labour begin to rise – and the efforts of workers properly rewarded and their skills recognised. This will in turn provide the incentive for business to invest in new advanced machinery and improve productivity. No doubt, there will be the inevitable pleas that this or that sector cannot afford even the smallest hike in wages, that profits will dwindle and businesses close. This has been the cry of capitalists throughout the ages from the 1850s’ 10-hour day and 40-hour week to the recent minimum wage legislation and the national living wage. If such pleas were heeded, we would still be living in Victorian times.

As these changes filter through the various sectors of employment, the economy will begin to move towards the high productivity, high-wage, high-skill economy that trade unions have always called for. The prospects of moving towards such an economy have never been more achievable than with Brexit. In fact, it is made possible only by the UK leaving the EU.

It is this optimism that Labour need to convey if it is to regain the support of workers. It is what the trade unions must make sure happen.