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International Socialism, June 1975


Notes of the Month

The Deluge


From International Socialism, No.79, June 1975, p.3.
Transcribed & marked up by by Einde O’Callaghan for ETOL.


’AFTER JUNE 5th, the deluge’; this headline to a political correspondent’s thinkpiece in the Guardian sums up the general expectation of big changes ahead. Once the referendum is out of the way – with a substantial YES majority if the opinion polls are even remotely reliable – a sharp turn even further to the right in government policy is on the order paper. Wedgwood Benn will be removed as Industry Secretary, public spending cuts brought forward and the trend to rising unemployment speeded up. And maybe by the autumn a wage freeze plus some kind of indexation scheme, perhaps along the lines of Jack Jones’ flat-rate plan.

These expectations are certainly realistic, but the timing and political methods to be used are more uncertain. Some of the pressure for an immediate ‘1931’ type package has relaxed because of the quite big improvement in the balance of trade position. Counting invisible exports, the trade deficit which was running at £3,188 million (annually projected) in the last quarter of 1974 has fallen to £1,476 million (annually projected) for the first four months of 1975.

Of course, a great deal of this is due to the combined effects of recession, internal inflation and the sinking pound.

The recession accounts for a run down in stocks (industrial output was down from March ’74 to March ’75 by 2.7 per cent). The differentially higher internal inflation combined with the further devaluation of the pound produced a situation in which export prices rose by 10 per cent (on average) in the first quarter of 1975 over the previous six months, compared with 5.6 per cent for average import prices.

According to various financial commentators the decline in sterling to a low of 25 per cent devaluation on December ’71 value was probably ‘managed’ by the Treasury, and the Economist is calling for further (but unspecified) devaluation. And there has been no outflow of oil money.

All of which adds up to a greater degree of leeway for the government than seemed probable a little while ago. But it cannot last very long. Inflation figures are affected by all kinds of statistical quirks because of different base lines. The latest issued give 21.7 per cent annually for prices and 31.7 per cent annually for wage rates – which is certainly an unrepresentative figure. Nonetheless the ‘Social Contract’ has manifestly failed to do what the employers and the government require of it. New attacks on working class living standards cannot be long delayed.

The question is, will the speeding up of cuts in public spending, the driving up of unemployment and a probable wage stop lead to the perpetuation of the pro-EEC ‘coalition’ – a Labour government dependent on Tory votes in parliament? Or will the Tribune left collapse yet again into support for Wilson as ‘the lesser evil’?

Of course the decisive field of struggle is not in parliament. The struggle between left and right in the unions is vastly more important and the industrial struggle proper is more important still. The Chrysler workers are causing the right wing more pain than a whole bench of Benns. And most of all because they demonstrate that unemployment is not having the intimidatory effect that government strategists are hoping for. The NUPE claim for a 33 per cent increase is another signal. The government – this one or a successor – still has to rely on the trade union bureaucracies as a ‘moderating’ force and this is an ever-present constraint on its freedom of action.

What happens on the ‘official’ political front is of significance mainly in this connection. A tacit ‘coalition’ with a Tribunite opposition, however feeble and confused, would alter the temperature in the unions in a fashion adverse to the right wing. So, still more, would an actual ‘national government’. If, on the other hand, the parliamentary lefts grovel once more, the development may be slower. But no less certain. The employer-government offensive is going to sharply intensify the class struggle in Britain.

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Last updated on 16.2.2008