Michael Kidron

The Rail Settlement

(February 1955)

From Socialist Review, Vol. 4 No. 6, February 1955, pp. 1–2 & 8.
Transcribed by Ian Birchall, Nina Kidron & Richard Kuper.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

Where There’s a Strike, There’s a Way

The victory of the railwaymen teaches us one thing: nothing can be gained by merely talking with the bosses; unless negotiations are backed with mass strike action or the threat of mass strike action, the bosses, whether they are Boards of nationalised industries or private capitalists, will spin out conferences interminably.

The history of the N.U.R. wage claim for a 15 per cent, increase in basic rates bears this out clearly. The claim was first made in August, 1953 – fully eighteen months ago. Four months later an arbitration award gave a miserable 4s., which was immediately met by unofficial stoppages and the threat of an official strike just before Christmas. The British Transport Commission panicked and, in January, 1954, just one month later, a six per cent, increase (including the 4s.) was doled out. Further negotiations throughout the year brought increases of only from 2s. 6d. to 4s. 6d. for the majority of grades in October, and with it such widespread dissatisfaction amongst the rank and file that the N.U.R. Executive, having already accepted the award, was forced to re-submit its original claim for a wages structure ranging from £6 15s. To £9 15s. Negotiations then broke down. B.T.C. could not find the money and the Government kept aloof. “The Minister of Transport told representatives of the N.U.R. who saw him in mid-December – before the railway strike was threatened (my emphasis – M.K.), – that the Government could not contemplate anything in the nature of a subsidy to enable wages to be increased ” (Times, 10/1/55).

Then, the threat of strike cleared the air. The Minister of Transport appointed a Court of Inquiry with wide terms of reference; the Court of Inquiry quickly justified the N.U.R. claim; the Minister of Transport “found that he “could contemplate something in the nature of a subsidy to enable wages to be increased,” and so, B.T.C. could find the money.

The lesson has been drawn by the capitalist press. We need only take note and learn:

“Ever since the negotiations began, everybody has been aware of an invisible presence at the various conferences. Mr. Campbell (General Secretary of the N.U.R – editor) must always have been conscious of it. So must Sir Brian Robertson (Chairman B.T.C.). And so, too, we may be sure, was Sir Walter Monckton (Minister of Labour).

“It was the ghostly presence of the watching, almost hostile, rank and file of the union, many of whom would have preferred a strike to any settlement that gave them less than the 15 per cent, they were asking. Thus, to talk of this as a victory for Mr. Campbell is not strictly, accurate, if triumph there be, it belongs to the rank and file who were prepared in some parts of the country to stage an unofficial strike if their leaders compromised.” (Observer, 9/1/55)

This view is supported by that of a member of the N.U.R. Executive who, when asked about rumours of strike action to be taken in the near future, said (last December): “The (bureaucracy of the) Union does not want a strike. But, like the proverbial wheelbarrow, we go only as far and as fast as we are pushed.” The man behind the barrow is the rank and file.

Workers Made to Pay

The wage increases are estimated at about £10 million a year and are going to be covered, at least in the short run, by a subsidy from the Exchequer. Of course, as soon as the settlement had been reached, the perennial Tory cry for harder work from the railwaymen was heard. E.H. Leather, M.P., called for the transfer of 50,000 railwaymen to other jobs; the Observer (9/1/55) adds the news that “Informed opinion believes that with reorganisation the railways might be able to dispense with as many as 10,000 men.”

The method of rationalisation at the worker’s expense, through “redundancy” and “increased productivity ” or, to put it differently, by sacking some and making the others work harder, is nothing new on the railways. The cost of all wage increases given between January, 1948, and December, 1952, as listed in the Annual Reports of the British Transport Commission, was £39.2 million a year. But the total railway wage bill in 1952 was only £29.5 million higher than in 1945 (Railway Executive, Facts and Figures about British Railways, 1953). The wage bill has thus risen £9.7 million less than it ought to have done. The reason – labour speed-up! Between 1948 and September, 1954, the total staff fell by over 60,000, or 8½ per cent., while net ton miles of traffic rose by six per cent. In other words, the average railwayman was putting one-seventh more effort into his job in 1954 than he was in 1948.

It looks as if this process is going to be pushed further, and that speed-ups and raised rents (4s.–5s. a week; in British Transport property, will go some way to cover the bigger wage bill.

But this won’t solve British Transport’s problem. The railway’s. financial position is, at the moment, very poor. Why?

The Dead Weight – Compensation

In nationalising the railways, the Labour Government placed a burden on the industry which no capitalist firm could ever carry. The Transport (and Electricity) Act lays down that the Board shall make “proper provision for depreciation and renewal of assets and for redemption of capital.” A normal company does not have repay most of its capital, it provides for depreciation, and that’s that.

Redemption of the £1,174 million compensation stock handed over to the ex-owners, and the interest paid out on the unredeemed stock, added up to £39 million in 1953 and £38½ million the year before. Another £10–£15 million a year goes on interest on new loans. Altogether, by the time all the compensation stock is finally bought out, interest payments will have multiplied the original £1,174 million by three.

At the time of nationalisation, railway property was grossly overvalued. In its 1950 Report (p. 208), the British Transport Commission admits that it was forced to increase provisions made for depreciation “in order to take care of assets which do not in practice stay in service for the full life assumed,” and paid for on that assumption.

Four times the aggregate increase in railway workers’ wages is thus spent every year on compensating the ex-owners for the loss of property which was sold at inflated prices. A steady rentier income is provided to the ex-owners of an industry which, in the last two years before nationalisation lost £11½ million (1946) and £59 ½ million (1947). No wonder there’s nothing left when it comes to satisfying demands for a wage increase.

The Dead Loss – Denationalisation

Where the Labour Government feared to tread on capitalist susceptibilities, or profits, the Tories rushed in and grabbed whatever they could find to their advantage in the nationalised industry. Road transport, which had been making a profit consistently since nationalisation, and whose net profit in 1952 – the year before denationalisation took effect – was £8.9 million, was dismantled and partly sold to private capitalists at an estimated loss of £20 million (Labour Research, December 1954).

Were it not for compensation payments and the denationalisation of road transport, the B.T.C. would have had no excuse to hold off a real increase in wage rates for eighteen months. Compensation and denationalisation are the causes of its insolvency. But compensation and denationalisation are sacrosanct, they cannot be touched, certainly not by a Tory Government, not even by a Labour Government. What is the solution?

Tory Solution

A Tory Government cannot abolish compensation payments, nor renationalise road transport. It is not yet prepared for a showdown with the Labour Movement, with full employment at home and a struggle for markets overseas, there can be no “all or none” battle. While it’s trying to gain “all” at home, it may be forced to accept “none” in foreign markets. No, this is the time for compromise.

And the compromise takes two forms: first, the subsidy, which will eventually be paid for by the taxpayer; second, freedom for the B.T.C. in adjusting fares and tariffs on the railways to “competitive conditions.”

The net result of such a solution is that it is largely the working class that foots the bill, the same amount of marge being spread more evenly, while the division of income between capitalists and workers remains pretty much the same. The second result of such a solution is to discredit nationalisation as much as possible. British Railways will be held up as a symbol of inefficiency, of the failure to make ends meet, of rotten labour-relations, in short, of the utter uselessness of nationalisation.

Socialist Solution

Better pay by itself is not enough. Now that industry is so integrated with the State, and so “centrally planned” that a concession to the workers here can always be recovered by the capitalists many times over somewhere else, the demand for improved working conditions cannot stand alone. It must be coupled with other, wider demands, to form a complete transitional programme to Socialism.

In the case of the railways, it means that wage demands must be coupled with the demand for the re-nationalisation, without compensation, of the denationalised road transport industry, with the demand for the abolition of interest payments on compensation stock, with the demand for the freezing of rail fares, with the demand for workers’ control of “rationalisation” as a preliminary to full workers’ control of the railways.

Last updated on 16 February 2017