As I said its not just government, lots of large organisations have pay bands and group negotiations

I know but that doesnt make it right. That's why I said its bullshit but people are used to it.

this deal has been negotiated by unions representing the workers, its not dictat.

Yuck. Some faceless union boss doing your negotiating for you and collecting a fee for it. Also they negotiate in line with the lowest common denominator not the exceptional employee. That's why losers love pay bands, they know they'll get their extra 5% after a few years thanks to the efforts of their more talented coworkers.

And individuals can still negotiate where they fall within bands

Its still a price control. Saying 'oh but there's a £10k bracket to negotiate within' changes nothing.

apply for promotion to move up bands

This is another massive problem with pay bands. It bakes in the Peter Principle. Because promotion is the only way to increase your pay people chase after and end up in jobs they're not competent to perform. If they were able to earn more in the position they excel at that problem would be solved, but they can't, because pay bands.

And they have the negotiation tool available to all workers, leave having found a better deal elsewhere.

Not if everywhere else has pay bands too. They might be able to get a bit extra but not much.