Self-employment in the Building Industry (in 1989)
by Peter Tobin
Peter Tobin is Regional Organiser for UCATT for Norfolk and part of Suffolk. He writes here in a personal capacity.
This article is a response to the comments made by Dave Chapel (Trade Union Diary, L&TUR No. 4, October-December 1987) welcoming UCATT’s change in policy towards the self-employed at its biennial conference last year, and praising those officials who in his view had pre-empted the change and were already recruiting from amongst self-employed building workers.
I am a full-time official for UCATT and I have broadly supported the Executive Committee’s strategy in attempting to bring ‘subbies’ under the remit of the Working Rules of the National Joint Council for the Building Industry (NJCBI) which are agreed between, principally, ourselves for the operatives and the Building Employers Confederation (BEC).
My point in writing is to sound a note of caution about the difficulties our negotiators face in getting, from as reactionary and destructive a bunch of employers as you could hope to meet, terms that all our existing members can live with. (I refer mainly to those directly employed under the Working Rules Agreement (WRA) who feel themselves to be the industrial ‘Cinderellas’ in terms of wages and workload compared to the ‘loadsamoney’ subby.) It would also be as well not to be too dewy-eyed as to their recruitment in the present situation.
There is, in fact, some indication that self-employment figures are peaking; a combination of factors account for this. In the immediate economic climate of high mortgage rates there has been a slump in the private housing sector, which is particularly well suited to this form of employment (i.e. repeated units ideal for small group production) and this has led to labour shedding. At a general level there is some evidence that the employers are finding that the system they encouraged and promoted is actually
inhibiting their control of labour and prices; the best example of this was shown at Canary Walk in London where subbies, exploiting a shortfall of skills and the demand for greater output, chased labour rates up on almost a weekly basis. In this respect it ought to be noted that the talks between ourselves and the employers regarding the legitimisation’ of the self-employed under a subcommittee of the NJCBI began at the employer’s instigation in October 1987.
However this may be, there can be no disguising the extent to which the system has developed. Estimates vary but it is conceded that between 50 and 60 per cent of those presently working in the industry are self-employed. Not surprisingly the last ten years has seen the most dramatic expansion in the figures: from 137,000 tax exemption certificates being issued in 1979 to over 400,000 last year with maybe 100,000 to 200,000 on 30 per cent emergency tax deduction. (By the nature of this group it is hard to give precise figures.) In the same period the number of firms registered has risen from approximately 90,000 to around 140,000. It seems an extraordinary amount but it reflects the fragmentation of an industry which ranges from a giant like Laings constructing Sizewell B to a jobbing carpenter working from the back of a van.
The fact remains, then, that, even if another ‘714 certificate’ was never applied for, any union seriously concerned with organising the industry would have to address the question. And this has to be done in a positive frame of mind, seeing self-employment as, for the most part, a tax status, with the individual in that category still having to sell his labour power to an employer as a member of the working class. The previous approach of seeing them as employers’ ‘Trojan Horses’ and attempting to roll back the system has unquestionably failed. Those who shout for that sort of struggle to continue largely do so within the hermetic conference confine and are generally drawn from the ranks of woodentop leftism grouped around Morning Star and similar eccentric groupuscules. Certainly they do articulate a residual bitterness, alluded to earlier, but they have as much chance of mobilising forces for any decisive action as a one-legged man in an arsekicking contest. A thinking through of the problem was therefore long overdue.
Let me make it clear that none of us want a two-tier system of employment in our industry. Given its nomadic casual nature it is hard to organise anyway, but with sites split between operatives on vastly different wages and conditions, an identity of interests – a prerequisite for organisation and representation is rendered difficult. In this respect (and setting aside the headbangers’ approach) I would give credit to UCATT’s Executive Committee for coming up with a more subtle and considered position which, succinctly put, has asked the employers to close the wages gap between the directly employed and the self-employed. (The present craftsman’s rate is a breathtakingly low £110 per 39 hour week, with the unfortunate labourer on even less; a subby will double, treble, or even quadruple that.) On the other hand, UCATT wants the advantages of holiday pay, wet time, guaranteed week and other provisions contained within the WRA extended to the self-employed. The eventual aim would be to ultimately reduce the difference between the two groups to the method by which they pay their tax.
It would appear that, however subtle this approach may be, the BEC has seen some of the dangers for themselves inherent in such a course. Whatever the difficulties self-employment presents them in terms of the shortfall of skills it exacerbates, the vagaries of price and orderly completion, none of these outweigh the advantages of having a large group of operatives to whom one has no employment responsibilities other than health and safety laws which make no distinction – and who can be blown out for whatever reason suits. Hence they have got cold feet and negotiations on this and indeed the wages structures of the industry have been stymied while we argue over this year’s wage claim.
Having described the phenomenon, albeit sketchily, and the present state of play, I should like to tum now to why so many have chosen this form of employment.
Simply put, the main reason is financial: it is the only way for many to take home half-way decent money. At the rates of pay described above, even with overtime and what bonuses there are, they cannot afford to be directly employed. This is especially true of the younger tradesman just or not long out of his time (apprenticeship, Ed.) For him the advantages of employment do not amount to a row of beans concerned as he will be with setting himself up with a family, a home, a car and the general appurtenances of modem life. It is a fact that many who remain in direct employment cannot afford to get a mortgage on even the lower cost housing that they are actually building! (And remember we don’t build council houses now.) In short, the majority of those who go self-employed do so because there is a financial pistol pointed at their head. You could practically draw a graph between the growth in their numbers and the decline in the value of real wages of the directly employed – this year’s pay claim for that group estimates that they would need a 20 per cent increase to put them where they were in 1979.
I emphasise this to offset any glib conclusion regarding the expansion of the so-called ‘enterprise culture’. That sort of codology, however well-suited to the hairdresser and ‘Hamburger Heaven’ sector is not a workable proposition where larger-scale industrial cooperation is required. Admittedly, there is a large entrepreneurial stratum in the industry but, arising from its historical diversification and fragmentation mentioned earlier, it has always been a feature; Thatcherism’ has not unlocked any hitherto suppressed capitalist urges. In fact, if you go beyond the simple-minded rhetoric of Tory ideologues and the half-baked initiatives of the DTI, it can be shown that the tax advantages – while still attractive – are not as great as they were. This reflects the continuing concern of the Treasury at the loss of revenue and the growth of a massive black economy of which the building industry forms a large component.
Thus, building workers who go ‘self-employed’, for the most part, do not become capitalists. Self-employment as practice is illusory and as a term is contradictory. What occurs is a quantitative change in the way the capital/labour relationship is mediated.
What happens is that the main contractor subcontracts the work and the risk out to a sub-contractor who then organises the necessary labour for a particular trade, or in some instances for a range of following trades. Operatives agree their price, either a piece or price work element or, more commonly now, a day-work rate, and work under the direction of the effective middleman or ‘gangmaster’. The latter’s reward for directing their work and for negotiating the prices with the main contractor is the difference between those prices and what he passes on to the operative. In most instances he is a proto-capitalist. Although he does sign a proper contract regarding the work which commits him to certain obligations, such as conforming to the Working Rules of the industry in respect, for example, of the payment of Holiday Stamps, having a safety policy, etc., the core of the contract is his ability to bring the job in on time and within the price.
It is fair to say that the peripheral aspects referred to above are not enforced by the main contractor, unless they are brought to his attention. By virtue of being officers of the Working Rule Agreement, Trade Union officials have the ability under the grievance procedure to register complaints through line management up to local, regional and national panels. (It is one of the contradictions of our industry that, for all its anarchic tendencies, it does have a very sophisticated mechanism for the avoidance of official disputes. The panels are half Trade Union and half BEC employers and their decisions are enforced.)
This situation gives the official the leverage ultimately to make a sub-contractor comply with the rules. I say ‘ultimately’ because what can happen in many instances is that the subbie puts some or all of his operatives into union membership and in fact may even pay their contributions. In return he might be left alone in relation to some or all of his obligations. A properly trained subbie will regard this as like a levy in the same way as he regards the 2.5 per cent Construction Industry Training Board levy that the main contractor puts the bite on him for (although the union’s power is not of course underpinned by statute). Some resent or are ignorant of these unwritten rules, and in these cases the official will seek the assistance of the main contractor in bringing them into line. Mostly the main contractor will take positive steps to do so because in particular they will be respondents at any panel applied for by the union and under National Working Rule 26 it is their responsibility to ensure that everyone on their site is employed under industry rules however they are employed. In a general sense they do so on the principle that they would rather have the union inside the tent pissing out than outside the tent pissing in.
In some areas, especially the metropolitan ones, this can form the principle avenue for recruitment as self-employment is the dominant method of operation. And make no mistake about it, more than any other comparable union, UCATT has to keep recruiting in an industry of nomads in order to stand still, let alone grow. (Most of us know that Sisyphus was in the building game but I would go further than that – in my opinion he was the first UCATT official!) Our Executive Committee has a keen strategic grasp of the maxim that membership equals revenue and, through a mixture of exhortation and cajolery, transmits this awareness to all officials of the union. So the pressure and the necessity to recruit in any situation is there. On management contract sites this can come down to ‘doing deals with subbies’.
Now while the lash of necessity is there in the short term it is not a satisfactory way for a trade union to operate in the long term. For a start you can see how such a system is open to cynical abuse by all concerned; ‘doing a deal’ could involve lounging around in well-cut suits , ‘knife and forking it’ on semi-permanent carouse. Just as ‘Loadsamoney’ is a reflection of a certain type of subbie, he can find his echo in the ‘Loadsamembers’ Trade Union official who works on Al Capone’s motto “You get much farther with kind words and a gun than with kind words alone”. This, of course, is anecdotal as most officials do retain a trade union integrity within what can be a fairly corrupt milieu. The point is that the system itself is rotten and open to exploitation by the unscrupulous.
From a principled trade union position the system is problematical because it can still leave the operative at the mercy of his employer. Admittedly, in a very key area, that of legal support from the union in pursuing accident claims, etc, it works. (UCA TI is very good in this respect.) But where does the operative stand in relation to day-to-day industrial matters with an employer who could be paying his dues as a form of ‘Danegeld’ to the union?
To return to my opening comments; UCA TI is right, within given parameters, to pursue a strategy which aims at bringing the self-employed under the protection of the Working Rules. At present they are in limbo and excluded from that protection. Yet 90 per cent of them work under a ‘master/servant’ relationship and therefore require an independent organisation that will represent them effectively in every aspect of their working lives.
So the Executive Committee was right to seize the opportunity of negotiations with the employers on the question and it was right to clear the decks for a change by steering such a policy through its conference. Whatever the difficulties there is no alternative. We tried in the 1950s and 1960s to confront the issue head on and we failed. I believe those pursuing the present course are in fact pursuing the same aims we had then: the bettering of the lot of all building workers. Whatever way you look at it, and whatever way he is employed, the building worker is getting a raw deal in some way. You can go through the list, wages, holidays, sick scheme, pensions, safety, welfare, job security, protective clothing, etc. and you will find that they are well below the standards which ought to exist in such a large and vital industry. An improvement of those standards in not inevitable; it can only be obtained on the basis of maximum possible unity of all building workers. Leftist critics of the present course seem to have forgotten that Marx wrote Workers of the world unite”, not “Some workers…”.
This article appeared in September 1989, in Issue 13 of Labour and Trade Union Review, now Labour Affairs. For more from the era, see https://labouraffairsmagazine.com/very-old-issues-images/magazines-010-to-019/.