Forty years on from the miners’ strike, unions are flexing their muscles | Larry Elliott

Forty years ago Britain was hurtling towards the pivotal industrial struggle of the postwar era. The National Coal Board, backed by Margaret Thatcher’s government, wanted to close pits deemed to be uneconomic. The leadership of the National Union of Mineworkers opposed the plan.

The scene was set for a strike that went on for a year and which ended in defeat not just for the miners but for the trade union movement as a whole. The NUM had a formidable record of winning its battles and in the early 1970s had twice inflicted defeats on Ted Heath’s government.

Losing to Heath’s successor as Tory leader showed how times had changed. Unions were already restricted in what they could do by laws passed by the Thatcher government, but nonetheless it was a truly symbolic moment when the NUM reluctantly gave up the fight. It marked the transition from a manufacturing economy to one dominated by services in general, and financial services in particular. Unions were pushed on the defensive while employers were emboldened. The balance of power shifted in favour of capital over labour.

There is an argument for saying that the long 1970s began with Barbara Castle’s doomed In Place of Strife, the attempt to reduce the power of trade unions in 1969, and concluded with the end of miners’ strike in March 1985. In that 16-year period, the economy, politics and industrial relations all fundamentally changed. Thirty years after the end of the strike there was not a single deep coalmine remaining in the UK. In 2019, many of the constituencies that were once dominated by communities centred on their pits voted for Tory MPs.

All that said, the demise of organised labour has been exaggerated. The recent cost of living crisis has highlighted that in a tight labour market unions are quite capable of negotiating pay deals that protect the living standards of their members, and to organise strikes when the deals on offer from employers are deemed not to be good enough. That’s proved to be the case even though the economy has been stagnant for the best part of the past few years. As Andrew Bailey, the governor of the Bank of England, pointed out in his evidence to the Treasury committee last week, it is highly unusual for unemployment to be so low when the economy is so weak. A jobless rate of below 4% only normally occurs when Britain is booming.

The pay bargaining success of unions such as Unite is all the more remarkable given that trade union membership is less than half what it was at its peak of 13.2m in 1979, and has actually fallen for the past two years. Figures from the Department for Business and Trade show that union membership is concentrated in the public sector, with private-sector membership the lowest on record. Unions no longer represent the blue-collar working class, which has shrunk markedly since the late 1970s. Two-thirds of today’s union members have a degree.

Legally, life is a lot tougher for trade unions than it was in the 1970s. They have to jump through all sorts of hoops to abide by laws governing strike ballots and picketing before they can call their members out.

But unions now know how to keep on the right side of the law and have found that when – as now – unemployment is low and job vacancies are high, their bargaining position is strong. It is certainly a lot stronger than it was in the early and mid-1980s, when unemployment stayed above 3m for five years. And stronger, too, than it was in the early 1990s, when unemployment surged back above 3m for a second time. Employers today are reluctant to reduce their head count even when business is bad, fearful that they might have trouble recruiting staff when things eventually pick up.

That has removed the main method by which Thatcher’s governments broke the trade unions in the 1980s – through the creation of what Karl Marx called a reserve army of the unemployed. The loss of jobs caused by mass factory closures in the early 1980s was responsible for a drop in private-sector union membership from which it never recovered. It has proved much harder for unions to recruit in the companies formed in the dominant service sector.

But unions have two important things going for them. The first is that there is little evidence of a new reserve army of the unemployed forming. Despite 14 increases in interest rates from the Bank of England between December 2021 and August 2023, Britain is effectively a full employment economy. A record number of people are inactive due to long-term sickness. Outsourcing of production overseas has gone into reverse. Both the Conservatives and Labour have both promised to reduce migration, which has hitherto boosted labour supply during the 21st century. The baby boomer generation is ageing, leading to fewer workers for each pensioner. AI might alter the dynamics of the labour market in the future, but for now demand for workers – both skilled and unskilled – looks as if it will remain strong.

The second factor is that Britain is about to elect a Labour government that has pledged to introduce a new deal for workers, including a ban on zero-hours contracts and the end of fire and re-hire.

The climate is a lot easier for unions than it was between 1980 – the start of Britain’s rapid de-industrialisation – and the arrival of the pandemic four decades later. The fact that employers’ organisations are lobbying hard for Labour to water down its plan for workers’ rights speaks volumes. The golden age for employers, when fear of the dole queue meant they could call the shots, is over.