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A promising approach to industrial relations

Scotland FlagThe good news about the number of Scots in work is tempered by concern over falling wages and conditions and the extent to which people are able to obtain sufficient work, or work that is secure.

A rise of 9,000 people in employment is plainly to be welcomed, as is a fall in the unemployment figures, with just 6.4 per cent of Scots now jobless and 73.5 per cent in work.

Whether there has been a fall in wages at UK level – the first for five years – is disputed, with some experts arguing a 0.2 per cent drop in pay is a statistical blip, with a growth of 0.6 per cent revealed once bonus payments are disregarded.

Even if there was growth, it was small, and STUC general secretary Grahame Smith is right to point to a pay collapse in real terms as well as drawing attention to the ongoing problem of high youth unemployment.

The difficulty for Scotland – and for many other Western economies – is how to balance improving productivity in a more competitive world while delivering a better deal for workers, who are grappling with rising domestic costs on many fronts.

There is some evidence, however, that these two goals may not be incompatible. That is the thinking that lies behind the new report on workplace relations and productivity from former minister Jim Mather.

The formerly adversarial approach between unions on one side and employers and government on the other, seen most strikingly in the 1980s, has become outdated. Unions have modernised and relations with employers are broadly more constructive, and the new industrial relations body envisaged by Mr Mather would hope to build on that.

The idea of a joint body bringing forward legislation to improve the representation of workers and develop progressive policies such as wider use of the living wage is positive. There are reasons to think good workplace relations can deliver enhanced productivity, but the commitment to such policies needs to be convincing.

Yet many employees will have their doubts and – as with developments such as zero-hours contracts – will see through policies that are sold as to their advantage, but really benefit only employers.

The review has particular significance for the Scottish Government, which has built its independence campaign on the belief that it can improve productivity in the Scottish economy. If productivity is boosted by just 0.3 percentage points a year, and 0.3 per cent more people can be brought into employment, along with an increase in the working-age population of Scotland, that would generate an additional £5 billion of annual revenues, the SNP claims.

These are big “ifs”. The rate of increase in productivity is regarded as a key measure of economic prospects and so far there has been a lack of clarity from ministers on how such an increase would be delivered.

But whether the independence referendum results in a Yes or No vote, this is one of the biggest challenges facing Scotland, and the Working Together review is an important contribution to finding an answer.




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