Building employer solidarity? Britain's experience of coordinated bargaining, 1979 to 1997

Abstract

ABSTRACTThe election of the Conservative government in 1979 is seen as a watershed in pay determination in the UK, ending formal pay policies. While the government withdrew, the UK's major employer organisation, the Confederation of British Industry (CBI), endeavoured to operate an alternative system of employer coordination on pay between 1979 and 1997. Had this approach succeeded, the UK's approach to pay determination would have become much more aligned to the models adopted within other EU Member States. We analyse the development of this alternative to government‐imposed incomes policy and measure its impact on the growth of earnings. We conclude that, despite the CBI's policy, the actions of individual employers suffered from classic market failure until the British economy was subjected to mounting competitive pressures from the international environment.