Are Starmer and Labour really in hock to ‘union paymasters’?

Since last month’s general election, Sharon Graham, the general secretary of the Unite trade union, has held face-to-face meetings with a string of key secretaries of state.

As she says, in many leading economies, that would barely merit a mention, given that she represents about a million members across 40-odd industries, including steel, energy and defence.

“For me, any government that’s serious about the economy, any government that’s serious about industry, absolutely would have talking to trade unions as an important part of what they do on a daily basis because, of course, we represent those people that go to work. Why would you not do that?”

Yet after 14 years of Conservative governments deeply suspicious of organised labour, the fact that union leaders, as well as corporate bosses, are popping in and out of Downing Street, marks a profound change in British public life.

Related: Rightwing outrage at Labour’s pay deals is out of step with public mood

As one union source put it: “Suggestions that unions alone have the ear of the government is plain wrong – lots of different groups are having their say. But the concerns of workers are now being listened to, and that’s huge.”

All Labour leaders have had to manage the relationship with the trades unions, which remain significant donors, with a structural role within internal party decision-making.

As Kate Bell, the assistant general secretary of the TUC, puts it: “Unions helped found the Labour party in order to provide a voice for working people in parliament. It’s 100% transparent what unions do, and the reason they’re doing it is because they want the voices of nurses, teachers, transport workers, to be heard in parliament and to be heard in those negotiations. There’s nothing underhand about that.”

While Keir Starmer is not from a union background, many observers believe he is more sympathetic towards organised labour than the last leader of his party to win a general election, Tony Blair.

Starmer has repeatedly highlighted his own modest roots and a determination to “make work pay”, and he arrived in office with a manifesto pledge to increase workers’ rights. The unions’ influence is bolstered, too, by the presence of Angela Rayner, Labour’s directly elected deputy leader, once a union negotiator herself.

But Starmer and his cabinet are having to weather predictably ferocious attacks from Tory frontbenchers and the rightwing press about above-inflation pay deals, the resumption of rail strikes and the push for workers’ rights.

The chancellor, Rachel Reeves, defended those public sector pay deals this week, insisting there would be “no blank cheques” and that the government had been determined to “draw a line” under months of industrial action.

A government source said: “This is all about getting the country working again, without any ideological basis. Some people seem to want to write that we’ve returned to type, but that doesn’t make it true.”

Ministers see the pay settlements as an integral part of the project to fix failing public services. Those for nurses and teachers were recommended by their independent pay review bodies.

Similarly, Wes Streeting, now health secretary, had indicated before the election that he was keen to settle the bitter dispute with junior doctors.

Bell said: “I think everybody could see the results of the Conservative approach to those pay deals, which was to ignore the recommendations, to seek to stir up tension, and that led to significant amounts of industrial action. So I think we should be seeing this as a return to normality.

“Everybody can see what’s happened to public services over the last decade, and the extent to which recruitment and retention problems have been part of that.”

The transport secretary, Louise Haigh, had made no secret of her intention to cut a deal with train drivers represented by Aslef either – and in fact, union sources said a two-year deal along similar lines was close to being signed with the Tory government, immediately before the election was called.

A third year (2024-25) was tacked on by Labour to provide more certainty about the cost to taxpayers and avoid the prospect of another round of potentially contentious talks starting imminently.

The former rail minister Huw Merriman conceded on X shortly after the announcement was made: “I can understand why the new govt have decided to cut a deal to end the uncertainty and move on with goodwill.”

However, Haigh’s pride in having “put and end” to damaging industrial action, quickly turned to fury two days later when Aslef announced a fresh round of strikes on the east coast mainline over a separate dispute.

After intervention by Haigh, talks on resolving this clash, in which the union claims the train operator LNER has being paying managers to break drivers’ strikes, could take place as soon as next week, potentially resulting in the action being called off.

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However, union insiders admitted that the timing of the strike announcement was disastrous, enraged Haigh and allowed the shadow home secretary and Tory leadership contender, James Cleverly, to claim Labour was being “played by its union paymasters”.

“How much longer will Keir Starmer sell influence like this?” Cleverly said, while his fellow leadership contender Robert Jenrick claimed Aslef had “humiliated the government”.

At the same time, business groups have stepped up lobbying over Labour’s plans to increase workers’ rights, which include the right to claim unfair dismissal from the first day of their employment and an end to “fire and rehire”.

Many in Labour see the rightwing attacks as little more than another stage of the grieving process from the jilted Tories and their backers. “There are a bunch of people that just need to wake up and smell the coffee,” said one Labour MP with a union background.

“It is a relationship where the contribution that unions can make to policy formation is recognised on an equivalent basis to the contribution that businesses can make. Because people have not been used to this, it suddenly feels like there’s a lot of unions around.”

Graham argues that references to overmighty unions are out of step with public opinion.

“I don’t think it’s the mood of where people are now. I think that people do think that the pendulum has swung too far and that workers get a very raw deal at work. They’re missing what’s happened, not just over 14 years, but longer, where working people have been pushed below the waterline.”

Yet the row with Aslef, and reports about potentially contentious motions being passed at next month’s TUC conference, underlines the pitfalls of navigating these crucial relationships.

Richard Hyman, an emeritus professor of industrial relations at the London School of Economics, has been examining Labour-union relations since the 1970s. He said the idea of a party at the whim of union demands was inaccurate.

“In the main, the unions were always more in hock to the Labour party than the other way round. If you look at the Wilson and Callaghan governments, the key union leaders leaned over backwards to accommodate Labour policies like wage restraint,” Hyman said.

“It only unravelled because [James] Callaghan pushed it too far in insisting on a tighter and tighter pay squeeze, and a lot of unions’ members weren’t prepared to go along with it any more.” The result was the widespread industrial action seen in the “winter of discontent” in 1978-9.

It was, he said, too early to tell how Starmer’s government would deal with unions, especially before details emerged on the legislation to increase employment rights.

“Clearly, it looks more favourable – with reservations – to the trade union agenda than it ever was under the Conservatives, and probably than it ever was under Blair,” Hyman said.

However, he added, whatever the claims about sinister “paymasters”, unions were likely to have little choice but to accept whatever emerged: “To a large degree that’s probably the case. The unions have their own priorities, and are looking for some sort of response from a Labour government. The problem for them, as it always has been, is that they’ve got nowhere else to go.”