From International Socialism (1st series), No.47, April/May 1971, pp.1-4.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
This spring has seen a further intensification of the industrial struggle. Strike figures are at the highest level for forty-five years. The postal strike alone has been the largest single conflict since 1926. The two large, official, political strikes (on March 1st and March 18th) have no precedent, except for the General Strike itself. Add to these the mass demonstration of February 21st and it is clear that we are witnessing a real rebirth of class action in Britain.
The immediate background to this new flowering of militancy is the attack by the government on many of the gains organised workers have been able to make over past years. The offensive has proceeded along two main fronts. Firstly there has been the attempt to weaken the long term basis of shop floor strength by the Industrial Relations Bill. Secondly there has been the shorter term exercise of hitting at particular unions in the public sector of the economy.
In both respects the Tories have broken with the traditional approach of successive post-war governments in dealings with the unions. In the past the very basis of wisdom seemed to be to treat the union leaders with respect, snuggling up to bureaucrats so as to encourage them to keep their members in line. Strikes like those of the London busmen in 1958 or the seamen in 1966 are remembered precisely because they were exceptional.
It is important to understand why the Tories have broken with such an approach. Some people – particularly union officials or Labour politicians – have been tempted to argue that somehow the recent policy is an aberration – a misunderstanding of the needs of British capitalism as a whole, a passing expression of backwoods idiosyncrasy. In fact, however, the new ruling class militancy has deeper roots.
Two years ago, incomes policy came to an end. Not because of any governmental decision (although in the few months before the election Labour seemed prepared to let wages go, in the hope of winning votes), but because masses of ordinary workers would tolerate it no more.
The policy had always discriminated against certain sections of workers. Its direct impact had always been minimal in industries with traditions of militancy and established rank and file strength. Here local actions had continued to force pay increases in forms that government scrutiny could not contain. But those workers who did not have such local strength suffered. Their real wages stagnated, or even fell. Yet union leaders had been able to collaborate in Incomes policy’ without too much trouble precisely because of such a mass of inert, ‘organised-unorganised’ workers.
In 1969 and 1970 these sections ceased to be quiescent. The ‘revolt of the lower paid’ hit industry after industry. In 1969 the number of strikes rose by thirty per cent and in 1970 by more than twenty per cent. More significant still was an increase in the average length of strikes last year, and the fact that many of these were by workers who had no record of militancy.
Previously the typical strike had been confined to a single factory or even shop, and had been of short duration. There had been a great deal of militancy in certain key industries, but this had been of a highly localised sort. The solidarity asserted had been parochial and fragmented. Because strikes rarely involved more than a minute fraction of their members at any point in time, national union officials could coexist peacefully with the militancy without giving any ground to it. 95 per cent of strikes were unofficial.
This pattern was now transformed. Although the older fragmented militancy still persisted in certain, key industries (particularly engineering), a new wave of struggle, involving big strikes by relatively large numbers of workers was superimposed on it.
The new insurgency posed particular problems for the national union leaders. Because of the numbers involved they could ignore it only at their peril. Here was a movement that could give leftist dissidents a base in the unions as no movement of previous decades could. Moreover, a show of militancy became the easiest way? to attract new members and increase the leaders’ influence. And so the bureaucracy began, albeit belatedly, to move in and organise what began as a spontaneous movement from below. In the process the ruling class’s ‘incomes policy’ strategy was buried, for the time being at any rate.
Yet inherent in the new approach of the union bureaucracy are many of the factors that produced (and still produce in many unions) the old approach. Militancy is encouraged – but only within carefully confined channels. The aim is to pressurise governments and employers to give concessions; it is not to make deep inroads into their power. The rank and file are expected to respond automatically to calls for action, not to initiate and determine such calls themselves.
To explain the shift in governmental policy it is also necessary to look briefly at the economic background against which it has taken place.
British capitalism faces three inter-related problems: stagnation, inflation, and declining profit margins. The offensive against workers’ living standards and shop floor strength is the way it sees of curing all three.
1. Between 1964 and 1968 British capitalism’s Gross National Product (GNP) grew by an average of 1.78 per cent a year. By comparison, Britain’s main competitors had growth rates in this period of about 5 per cent (France, Italy, Germany) or even 12 per cent (Japan).
The immediate cause of the stagnation has been the continual fear by those who run the economy that any expansion will lead very quickly to a balance of payments crisis. As they see it, expansion is likely to mean a rise in consumers’ incomes that might be spent on imports. This in turn would make devaluation of the pound a possibility. Industrialists and financiers would immediately start moving funds abroad in order to protect themselves against (and to profit from) such an eventuality. Once this point were reached the balance of payments could be pushed into deficit to such an extent that only an immediate stopping of economic expansion could prevent devaluation.
In the nineteen fifties and early sixties such a sequence produced the typical ‘stop-go’ policies. Since the mid-sixties ‘stop-go’ has been replaced by ‘stop-stop’ in a desperate attempt to build up sufficient gold and foreign currency reserves to enable prolonged expansion to take place.
The Conservative government came to power at a time when sizeable reserves seemed to have been accumulated, and it hoped to be able to expand the economy immediately. It got a rude shock. The reserves seemed to shrink to insignificance when contrasted with the massive sums of money that have flown from one country to another overnight in recent years. For example, £350m of funds came into Britain on short-term loan in the fourth quarter of 1970. Were such a sum to move the other way it would immediately make a sizeable dent in the balance of payments surplus. The internationalisation of capitalism is making the British government’s efforts to control its own affairs seem puny. It fears to expand in case it has to bring this to a peremptory ending within a few months for balance of payments reasons. As the Financial Times writes (March 13),
‘Any attempt to expand out of present difficulties would merely compound them with the additional complication of a serious weakening of Britain’s international competitive position and the inevitable impact on the balance-of-payments.’
And so the government first tries to find some way to ensure that expansion does not increase inflation, push up imports and make exports uncompetitive.
2. According to the official legends peddled in the press, the major cause of the present inflation is the ‘unreasonableness’ of the unions and the ‘greed’ of workers. In fact, however, its origins lie elsewhere, in the measures used in 1967-68 to try to overcome the long term problems of British capitalism -devaluation, credit squeeze, and wage freeze.
According to the National Institute Economic Review inflation first began to rise ‘above the trend’ in 1968 and 1969.
‘In those years, however, the rise in wage rates and in wage costs per unit of output was relatively modest, but the rise in import prices (in 1968) and in indirect taxes (both in 1968 and 1969) were well above normal. Both of these rises were, of course, in large part due to devaluation and the demand management policies associated with it.’
Only after workers had suffered such price increases during two years of wage freeze did they begin to recoup their losses on any scale, and, inevitably, add to the inflation, so that ‘in 1970 unit wage costs made the running, accounting for over 80 per cent of the rise.’
For British capitalism the renewed militancy of workers would not, perhaps, have mattered overmuch if the economy had been expanding. The more or less automatic improvements that most workers had come to expect in the fifties and early sixties could have been resumed and the militancy contained, But with the economy stagnating, increased wage demands could only further add to inflation. British capitalism was in a vicious circle from which there was only one escape – to further clobber organised workers.
3. The combination of long term stagnation (and therefore of declining relative efficiency of British capitalism) and of inflation has, above all, hit the ruling class where it really hurts – in terms of profitability. According to the Economist there was a drop in average profit margins ‘from 14½ per cent to 10 per cent’ between 1964 and 1969 – a trend which has been further exacerbated since. [1]
Declining profitability is having its effect in further encouraging the tendency towards stagnation. Industrialists are postponing investments or moving them abroad in the search for higher profits.
Orders for machine tools are down more than a third on last year’s total. In chemicals several major construction projects are being postponed. Both Shell and BP have delayed enormous programs, while ICI has reduced its domestic expansion program, while increasing its overseas investment. The result, in terms of rising unemployment, is plain for all to see.
The government will be forced in the not too distant future to try and reverse such trends by encouraging expansion at long last. But once again, the precondition is its ability to hold wages. So it has set out to reduce average wage increases to a target of less than ten per cent, which, as the National Institute points out, would lead ‘to a very modest rise in real disposable incomes this year and a fall through next year ...’
The Public Sector Struggles
The two tendencies we have outlined above both began to reach their full development about six months ago. The union bureaucracy felt impelled to put in demands for unprecedented wage increases for their members in order to contain growing rank and file restlessness. The government felt compelled to make a stand against these so as to restore profit margins and the long-term prospects of British capitalism. The result was to be the series of set-piece confrontations we have seen in public sector.
The government’s aim in these confrontations has been simple; to prove to the unions that militancy does not pay. In its early days it enjoyed few successes. It gave in to the dockworkers unions with hardly a struggle (which is not to say that the dockers’ could not have won much more if their leaders had been more determined). Local government manual workers gained much more than the Tories had hoped and drove ruling class circles to fury. Even the miners got 12 per cent. And if they did not gain more, it was not so much because of the determination of the government as because of sabotage by national union officials.
Greater success was to meet the government in the case of the power workers. A carefully orchestrated campaign of press, TV and radio abuse was used to isolate the workers and enable their officials to call the work-to-rule off after only seven days. But the newly discovered strength of the power-men was not removed with the formal ending of confrontation. They could be held in check, but not forced to their knees. The Wilberforce Report recognised this by offering more than the government would have liked. It aimed to prevent any renewed struggle with a solution that got the union leaders off the hook, while not costing the employers too much. Central here was the re-employment of the concept of productivity. A reconciliation was possible once again between the national union bureaucrats (who could not have felt too happy using the language of class warfare in any case) and the employing class.
However, the very nature of this kind of settlement was such that it could not bring the more general upsurge of militancy to an end. The government felt that only decisive defeat for a large section of workers could do so. It picked on the postmen as the sacrificial victim. What resulted was the largest single industrial conflict since the war.
The government approached the dispute with the clear intention of forcing a substantial section of workers back to work after a long strike with no gains to show for their efforts. It hoped in this way to teach a lesson to others and so to dampen the pressures below pushing the union bureaucracy generally into action.
Fundamental to the government’s strategy was its belief that the rest of the economy could survive undamaged without postal services longer than the postal workers could without strike pay. For some months previous to the dispute preparations were made within the post office to ensure that it did not give in (planning for ‘emergencies’, the sacking of Lord Hall and so on).
However, the government did not get things its own way during the early weeks of the strike. The mass of UPW members were solid in their support for the strike, although a fair proportion of telephonists scabbed. Further, there was considerable popular support for the postal workers case among other workers. So even after six weeks of the strike there were few signs of it cracking.
But the length of the strike faced the UPW leaders with one major problem. Forty thousand members were dependent on the union’s hardship fund for their sole source of income. But the union just did not have the money in its funds to pay out the sums required. It could only keep the strike going if other unions helped out. Yet the leaders of these unions, even the ‘left’ leaders of the Engineering and Transport Workers’ unions, were only prepared to give (as opposed to loan) the UPW quite derisory sums. As the strike entered its seventh week, the UPW leaders found their hardship fund had run out, appealed in vain of the General Council of the TUC for aid, and then called the strike off.
The government had worked on the assumption that the backing given to the UPW by other union leaders would be merely verbal. Its calculation proved correct. No section of the trade union bureaucracy was prepared to give the aid the postal workers needed.
The national union leaders, ‘left’ as well as ‘right’, seem to have understood, and feared, what a postal workers victory would have meant within their own unions. Once again the efficacy of militancy would have been proved. The pressures from other sections of workers for industrial action would have been irresistible. The ability of even the ‘lefts’ to hold the forces released in check would have been threatened.
Success in defeating the postal workers was not only important for the government’s policy on wages. It was also important in relation to the fight over the Industrial Relations Bill.
The basic premise underlying the government’s strategy over the Bill has been that the union leaders would not oppose it seriously. Noisy verbal condemnation by the union leaders has been expected to subside once the law is enacted and give way to de facto acquiescence. The whole success of the legislation depends upon the large unions accepting that the law is the law and cannot be defied. Were the national leaders of the large unions to deliberately defy the law, the government would face considerable difficulties, for it does not want the massive class confrontations that might follow the jailing of a Jones or a Scanlon.
Indeed, for the government, the ideal situation would be one in which it did not have to jail anybody. The existence of the law would serve to intimidate rank-and-file militants, but the ability of the government to enforce it against the whole trade union movement would never be put to the test. Like the criminal who robs a bank by waving an empty gun, the Tories hope that they are never called upon to pull the trigger.
Shrieks of protest from union leaders do not represent any real problem for such a strategy, providing they are not translated into action. Indeed, they can even strengthen the government’s position: they make the law seem much more imposing and the threat it poses much more intimidating than would otherwise be the case.
The union bureaucracy has felt compelled to organise certain sorts of protests against the Bill. The whole standing of national union leaders within present society depends on the ability to balance between the powers that be and the organised working class. They have prestige and a comfortable life – but only in so far as they can control the mobilisation of workers around class goals, carefully confining such mobilisation to safe, restricted channels. The present government measures are intended in the long term to strengthen the hold of the bureaucrats over the unions, but the introduction of them has threatened to upset the delicate mechanisms by which the bureaucracy performs its current balancing act. Hence the protests.
The new wages insurgency among the rank and file further strengthened the pressures leading to protest. The union leaders needed more than ever before at least to seem to be fighting the Bill. That is why the government’s success with the postal workers has been so important for the fight against the Bill. The pressure pushing for militant deeds from the national union leaders has been weakened, if only temporarily. The TUC Special Conference could vote for a policy of effective acquiescence to the legislation. And the ‘left’ union leaders could in turn acquiesce in the TUC decision.
For the present the postal workers defeat can be expected to produce a slight abatement of the wages struggle, while the victory for the right-wing at the TUC will mean a curtailment of ‘official’ actions against the legislation. The government clearly hopes that in the lull it will be able to put the law into effect, and further dampen down shopfloor militancy.
However, this certainly does not mean that the struggle against the government’s measures is over. It is likely to enter a new phase, perhaps of more significance hi the long term than the previous one.
Firstly, it will no longer be possible for militants to delude themselves that the struggle can be confined to in-fighting on the TUC General Council. Local committees for fighting the Bill ‘unofficially’ – local ‘liaison committees’, ‘action committees’ and the like – will receive a new impetus. They will become the natural focus for the growing number of workers who see the need for a continued struggle.
Secondly, the fight within individual unions at the rank-and-file level will take on an added importance. The key issue here will be whether unions can be forced to defy the law. The TUC has come out formally against unions registering – but has carefully inserted an easy escape clause enabling unions to register if they so wish. Over the coming months government pressure for them to do so will grow Bureaucrats of all shades will search desperately for ways of not coming into collision with the government, even if they do not go as far as to register. This means that a campaign among the rank and file for defiance of the law – above all for unions officially to take responsibility for ‘unfair’ strikes, for the continued blacking of goods, and so on – is essential to counter the government’s ‘divide and rule’ strategy.
One thing is certain. The struggle within the official union structure will become more important than ever once the law comes into effect. Precisely because of the intimidating effect of the law on rank and file activists, the demand for official union sanction for any action will grow. In the short term this is likely to mean a decline in the intensity of industrial struggle. But hi the long term it can only mean a growing pressure on the union machine from below for it to defy the law. The task of revolutionary socialists in this situation is to attempt to bring together the newly militant forces developing below, and to provide them with the cohesion and guidance necessary if they are to break through. The key here will be the ability to produce concrete programs for particular unions and industries, relating the necessity for official defiance of the laws to demands for democratisation of the unions. If this can be done, it will be possible to build up effective resistance to the government’s strategy and provide revolutionary ideas with a lasting influence where it really matters, in the working class movement.
1. Profits rates should not, however, be confused with total profits, which have continued their endless upward trend. For 242 companies reporting in the last quarter of 1970, trading profits rose 10.7 per cent. What is causing concern is that the ratio of profits to investment is not sufficient to finance necessary new, enlarged investments at costs continually being pushed up by inflation, or in extreme cases, even to pay off existing debts. Thus while profits can rise by over the year 10.7 per cent, as a proportion of net assets they can fall (from 9.6 to 9.5 per cent). Put another way, the dynamo which drives the system forward demands more power just to keep it where it is. And, in the last resort, sweat on the shopfloor is the only source of that power.
Last updated on 18 November 2009