Many people today will not remember the 1970s. Indeed, most of the leading figures in our Government are too young to do so. But I recall them only too well.
As a senior executive at the hotel group TrustHouseForte in the second half of that decade, I had a ringside seat on events during a period when British business was plagued by industrial disputes.
The country was continually being brought to a standstill by lengthy periods of strike action forced by trade unions in industries critical to the economy.
Nowhere was this phenomenon more evident than in the car industry, then dominated by British Leyland (BL), manufacturer of popular models such as the Morris Marina and Austin Allegro.
The architect of much of its decline was a communist trade unionist called Derek Robinson, who led no fewer than 523 walkouts in one 30-month period at BL’s Birmingham car plant, a record that earned him the nickname Red Robbo.
Such behaviour had a predictable effect on the company’s fortunes. An automotive giant that sold 40 per cent of all the cars sold in Britain in 1970 saw its market share collapse to 18 per cent by the end of the decade.
It was a similar story in sectors such as shipbuilding, coal-mining and the national utilities, where ‘closed shops’ – workplaces in which union membership was a condition of employment – were rife.
Employers could not afford to weather long periods of strike action and so continually caved in to unions’ demands for higher pay and improved conditions.
So-called ‘Spanish practices’ – inefficient ways of working such as deliberate overmanning – were also endemic. The print unions were so powerful in the newspaper business, for example, that there were routinely three people employed for every job, each working a third of the year for a full year’s pay.
This racket was finally broken up by Rupert Murdoch, who – after secretly setting up a modern printing plant at Wapping, East London – sacked his old workforce overnight.
Even today, we have some remnants of this type of malpractice, with the railway unions insisting on archaic demarcation lines between roles, breaks extended by absurdly long ‘walking allowances’ and lunch hours that re-start if they are interrupted by a manager who so much as says ‘Hello’.
I remind you of these dark days because Deputy PM Angela Rayner’s new Employment Rights Bill delivers sweeping new powers to the unions which threaten to return the entire economy to the situation I describe above. The legislation runs to almost 200 pages of new regulations that will be imposed on every employer in the land, whether they are a small- or medium-sized enterprise or a behemoth like the NHS.
It will enable the unions to enter the workplace at will, bombard employees with campaigning literature whether they want it or not and force employers to recognise them when it comes to negotiations over pay and conditions even if only a small minority of the staff are in favour. (This proportion could be as low as 2 per cent.)
It will also reduce flexibility in the labour market by giving workers the right to cry unfair dismissal on day one of their employment, guarantee minimum working hours and make employers responsible for the actions of third parties that affect their staff.
The Government, with the raft of public-sector pay increases it awarded in the early days of its administration, has already shown how easily it gives in to union demands, and the concessions it makes to union barons in this Bill will make life even more difficult for employers in a wider spectrum of industries.
As things stand, good workers are appreciated and nurtured, it is relatively easy for employees to change jobs and there is no need for the sort of tough labour regulations laid out in the Bill. It is no exaggeration to say that this sort of legislation protects only bad workers.
I employ some 3,000 people in 15 hotels spread across five countries – with four more in the pipeline – and I go out of my way to look after the people I employ.
In a service industry like mine, the front-line staff, who make up the majority of the workforce, are the ones who communicate the company’s culture and philosophy to the customer.
They transmit the warmth and hospitality that makes my business different from its competitors. And if we are to maintain our market-leading position, I must make sure my people remain happy and contented in the work they do and are highly motivated to deliver the highest level of service to my customers.
This means ensuring they have the right conditions and the necessary training to enable them to do their sometimes difficult jobs with professionalism and enthusiasm. Bad workers do not buy into all this. They are like a cancer which spreads throughout the organisation and undermines the good work done by more conscientious colleagues.
Over time, persistent poor service damages the company’s image, eventually affecting its profitability and so the employment security of their fellow workers. This cannot be tolerated.
The more legislation makes it difficult to sack people like this, the more businesses will suffer. And this new piece of legislation is a malingerers’ charter. According to the shadow business secretary Andrew Griffith, the Government’s own calculations predict that the Bill will cost British businesses £5billion a year and the economy 50,000 jobs. I can well believe it because I have seen the future and it doesn’t work.
I’m referring to the business climate that already exists in continental Europe, where 13 of my hotels are based. In France and Belgium in particular – but also in Germany and Italy – it is very complicated and expensive to remove staff. This creates a tendency for employers to keep on poorly-performing people, with all the implications that has for the running of their businesses.
Very often, companies simply move such people sideways, which means employing more people to take their place, even though the added cost involved will affect their bottom line.
In Britain, we have had much lower levels of unemployment than continental Europe. We have also had greater flexibility in the workplace and, as a result, our economy has long outperformed Europe’s.
In the US, employers enjoy even greater flexibility than we have in Britain, and the economy there has significantly outstripped Europe for years.
Our existing legislation is not particularly favourable to employers, as it already allows some employees who want to take advantage to do so. But it is broadly fair and gives businesses the flexibility they need to be successful.
This Labour Government has already brought our economy to a standstill, and the Employment Rights Bill will do nothing to improve matters.
During the election campaign, Sir Keir Starmer and Rachel Reeves constantly talked up their growth agenda, but it is now clear that they have not the first clue about how to make the economy boom. And this dreadful piece of legislation, which is pure socialism on steroids, will only set us back still further.
Sir Rocco is chairman of Rocco Forte Hotels.