"Companies will be told they must promote trade union membership if they want to win government contracts.
Businesses will today be told that they must demonstrate how they will "build good relations" with unions if they are to win a share of the £115 billion worth of public service contracts on offer."
This policy, if seriously enforced, would be a disaster. An important restraint on the unions is that they know that if they push too far they'll put the company they work for out of business. That knowledge creates something of a balance of power in the workplace and prevents unions doing too much harm to Britain's economic competitiveness.
That restraint does not exist in the public sector and, as we showed in our report The Looming Winter of Discontent (PDF), public sector workers have gone on strike 100 times as much as workers in the private sector in the last year. This is despite public sector workers being better paid, on average. Every year children's educations are interrupted when schools go on strike, millions of commuters are inconvenienced when tube lines are shut and people's property and lives can be put at risk when the Army are forced to take over, using antiquated equipment, from striking firemen.
This kind of problem could spread to large parts of the private sector if firms who acquiesce to the unions are given a significant advantage in securing public sector contracts. That would mean that unions would not have to fear the businesses they work for immediately going bust as preferential treatment from government would protect their firm from competition. Over time we would all lose as our firms lose their ability to compete with the best in the world. The majority of Britons who are not unionised would no longer face a level playing field and prices could rise.
It is rather sad that unions can secure policy changes like this one just by underwriting the Labour Party's debts.