Construction workers have been among the hardest-hit by Covid-19, with profit-hungry bosses keeping sites open throughout the pandemic. Brian Parkin examines the peculiarities of construction in Britain, and asks what must be done to start fighting back.
In 1914, an Irish construction worker published his first and only work – The Ragged-Trousered Philanthropists. As well as writing a socialist classic, the author, Robert Tressell, in his description of the British ‘building trade’, gave the clearest and simplest explanation of Marx’s labour theory of value, which he described as ‘The Money Trick’.
Now, one hundred and seventeen years later, we see a construction industry that in many ways Tressell would recognise. Apart from the seasonal agricultural sector, construction remains the most labour-intensive industrial sector. It also continues to be the most dangerous industry regarding annual serious accidents and death rates. In terms of the employers, low unionisation rates and blacklisting prevail. The figures for 2019 put the level of unionisation in construction at 13.1% – compared with 13.7% for the UK private sector as a whole. Blacklisting, although technically illegal and despite the magnificent efforts of the Blacklisting Support Campaign, remains a persistent feature of the employment culture in a highly deregulated construction labour market.
In terms of construction as a proportion of the UK economy as a whole, the industry accounts for 7.8% of overall GDP and 8% of the overall UK workforce, currently numbering 2.103 million people. However, the industry is highly susceptible to fluctuations in the wider economy with, for example, the global economic recession of 2008-09 seeing the shedding of half of a million construction jobs in its first three months.
The industry is also highly prone to fluctuations in ‘hot money’ investment, particularly the inner-city property investments of the so-called ‘green shoots’ recovery after the post-2008-09 crash, upon which the expansion and consolidation of construction companies such as Carillion occurred – only to fall like houses of cards when the financial markets became nervous around 2018. The Carillion failure is worthy of note, if only in that its December 2017 £22 billion crash represented the biggest UK corporate failure to date.
The UK construction sector is also unique regarding its low profit-to-turnover margins which, at best, in the top ten construction companies, average around 2.8%. The sector also sees some companies chalking up quite spectacular losses in some Financial Year quarters. For instance, if we look at the five largest UK construction firms for the last reported Year-over-Year Q3 figures, where turnover averages £4bn, we find:
Balfour Beatty -7.4
Morgan Sidnall -4.6
Galliford Try -6.7
Source: Construction Index January 10th.
The dismal performances listed above will level out across the financial year to find most construction companies turning in a profit margin of around 1.8%. But this low profit yield disguises the fact that much of the surplus generated in a financial year will have gone into wages in the form of directors’ pay, bonuses and remunerations – what Karl Marx described as ‘the wages of superintendence‘.
Even considering this fudging of the ‘wages’ column, high labour intensity remains the battleground within an industry where some 80% of all costs are accounted for by wages. Over the last two decades, the internal labour market has seen the costs of employment mitigated through employment status work-arounds – today at maximum only 7% of the construction workforce are directly employed. Working from available statistics, we can estimate the employment composition of the construction industry currently at:
Direct employment 7%
Employment agency 40%
Bogus self-employed 53%
This means that the construction companies no longer have to bear the employment overheads of National Insurance contributions, holiday pay or sick leave. And with a casual and hand-to-mouth workforce, they are more likely to avoid the reportage of serious accidents which would only result in stoppages and loss of pay for the companies.
This fragmentation of an already nomadic workforce creates a culture of individualism within which it is difficult to engender the sense of solidarity necessary for the building of trade union consciousness. Yet, despite this fragmentary employment tradition, the UK construction industry is an anomaly in that it is highly regulated in the form of near-statutory national agreements. The agreements arose from the immediate post-war period when, as a peace trade-off with the unions, various wages councils were established in certain industries as a way of avoiding ‘industrial conflict’. This de facto gives the unions formal recognition in negotiating rights in all matters of terms and conditions of employment.
Private sector construction – i.e., the construction of the built environment covering dwellings, public and industrial infrastructure – has traditionally been covered by the Joint Industry Board (JIB) and its Scottish equivalent, and the National Agreement for Engineering and Construction Industry (NAECI), the latter covering large industrial projects such as power plants, refineries and large processing plant repair and maintenance. But in 2016, Unite, with a very big construction sector, merged with the smaller UCATT, which was largely involved in the local authority Construction Industry Joint Council agreement, which in the main covers a different range of trade skills.
It is only now that the purpose of the Unite/UCATT merger is becoming clear, with the UCATT bureaucracy taking over the mainly lay-member roles of committees relating to construction sector agreements, roles of which they know nothing and care less. This has now led to a movement within the Unite construction membership for a separate Electrical and Mechanical sector with greater lay-member and direct democratic control over national agreements.
For some on the left, this will be seen as an exclusive and ‘craftist’ development. But for others it will be regarded as the only way by which some semblance of democracy can be restored. Currently, there is a serious lack of fight from the national leadership over the Covid-19 pandemic, leaving most major construction sites working.
Conditions on construction sites are being reported to be highly unsafe. One worker on the Construction Rank and File online forum reported: ‘water supply to the sites is frozen, where hands cannot even be washed and eating utensils cannot be rinsed. No hand sanitising stations are provided and no social distancing is possible’.
These are the conditions in a major industry where the workforce can only be acting as a major vector in the worst public health crisis in over a century. As of December 2020, the ONS reported that elementary construction work was one of the ten worst-affected occupations when measuring male Covid-19 related deaths, with nearly as high a mortality rate as for male nursing auxiliaries and assistants. And yet, in the absence of any fighting lead, workers are now leaving the union rather than joining it.
For the construction bosses who are well used to managing crises by simply passing the costs onto the backs of the workforce, this is a scandal. And for construction workers, it is a tragedy – but an avoidable one. What is to be done?
A challenge to an often myopic, inept and bureaucratic Unite leadership is long overdue.