MINISTERS have been urged to establish fair pay agreements to tackle recruitment problems in construction, childcare and the rail industry.

The Institute for Public Policy Research (IPPR) said that scrapping  Thatcher-era industrial relations for collective bargaining was crucial to Labour building 1.5 million new homes and delivering major infrastructure projects — such as a third runway at Heathrow.

In a report published today, the think tank said that fair pay agreements would help tackle recruitment and retention issues facing sectors such as construction, where estimates suggest 225,000 more workers will be needed to meet demand.

IPPR researcher Joseph Evans said: “Labour has promised to deliver its national missions, but workforce shortages in the industries which will achieve those missions are creating significant hurdles.

“Construction, childcare and rail will all deliver on the government’s promises to grow the economy and break down barriers to opportunity.

“Fair pay agreements will help to make sure these sectors are functioning as effectively as possible: they’re key to getting Britain back to work and driving growth.” 

The government has already committed to introducing collective bargaining for social care employees and teaching support staff, which involves unions and employers negotiating training standards, pay and conditions.

Labour MP Andy McDonald said: “Establishing new collective bargaining arrangements to bring employers and unions to the table can only drive up job security and better pay and conditions.

“The measures in the Employment Rights Bill for adult social care and school support staff are welcome but there are many other sectors which could benefit — as trades unions told the Bill committee in recent months.”

He tabled an amendment to the Bill this week to give the Business Secretary — currently Jonathan Reynolds — the power to establish collective bargaining in other sectors of the economy.

RMT general secretary Eddie Dempsey said: “Scrapping the legacy of Thatcher-era industrial relations would be a massive step forward for railway workers and others in the economy.

“Labour has pledged to remove anti-trade union laws and we would want them to go further, scrapping all laws that restrict workers from organising effectively.

“The decline in collective agreements has fuelled wage stagnation, inequality, and economic weakness, while countries with strong bargaining coverage see higher wages and better conditions.

“To put more money in people’s pockets, boost productivity, and fix the railways, the government must strengthen the Employment Rights Bill and extend fair pay agreements across the economy.”