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International Socialism, May 1977


Notes of the Month

The Social Contract:
Far from dead


From International Socialism (1st series), No. 98, May 1977, pp. 4–5.
Transcribed by Christian Høgsbjerg, with thanks to Sally Kincaid.
Marked up by Einde O’Callaghan for ETOL.


RUMOURS of the Social Contract’s death have been much exaggerated. So far the trade union bureaucracy has been able to contain the shop-floor rebellion against wage restraint that was announced at the demonstration of carworkers at Longbridge in February. Both the Leyland toolroom workers and the Heathrow engineers returned to work without winning their demands.

The Communist Party’s zig-zag

ONE reason has been the ruthlessness of the response of the trade union leaders. At Leyland Scanlon was prepared to support the sacking of his own members. At Heathrow the other unions were prepared to sign the Blackleg’s Charter in order to break the engineers’ strike.

Another factor was the behaviour of the Communist Party. CP stewards like Longbridge convenor Derek Robinson were among the first to sound the charge against the Social Contract; they were also the first to sound the retreat. Elsewhere in this issue, Steve Jefferys, Sheila McGregor and John Rose show how the Communist Party’s left turn in February was followed almost as rapidly by a shift to the right: the CP denounced the Leyland and Heathrow strikes as ‘divisive’, and reduced to a token protest the one-day strike on April 20 that they were instrumental in calling in the first place.

The CP’s rapid zig-zag shows how heavily it depends upon the trade union leadership. The initial attack on the Social Contract took place in an atmosphere where ‘new left’ public sector union leaders like Alan Fisher were prepared to organise mass protests against the cuts. When the bureaucracy, ‘new left’, old ‘left’ and right alike united in opposition to the unofficial strike-wave, the CP retreated.

The effect of this retreat was to weaken the whole movement against the Social Contract. The Leyland combine committee represents 180,000 workers. Had Robinson and the other CP stewards worked all-out for the strike on April 20, the strikers could have numbered hundreds of thousands, rather than the 40,000 who actually came out. And the effect of such a strike could have swung the balance in the union conferences like the NUJ and the Scottish TUC where motions against wage restraint were narrowly defeated.

An ‘orderly return’?

WHAT was at stake in the movement against the Social Contract that developed between February and April was the ‘orderly return to free collective bargaining’ laid down at the 1976 TUC. This ‘orderly return’ advocated by Jones, Scanlon and the other trade union leaders is very far from a rejection of wage restraint.

Jones spelled out his strategy at the STUC: ‘It would be impossible to lay down centrally strict lines of operation to deal with the complex problem of pay differentials.’ In other words, the shop-floor rebellion by the toolmakers, engineers, etc., means that a tight pay limit along Phase One and Two lines cannot be held. This, as the Economist pointed out, ‘is precisely the thinking behind the government’s idea for kitty bargaining at shop-floor level’. (April 23 1977) Kitty bargaining means fixing a percentage increase for the total wage bill and leaving it up to collective bargaining to determine how the increase is shared between different sections of workers. It is a perfect recipe for divide-and-rule tactics on the employers’ part.

Jones promised that the trade union leadership would exercise a ‘moderating influence’ in ‘voluntary collective bargaining’. In other words, the bureaucracy would continue to police their members’ wage-claims. They showed their willingness to turn words into action at Leyland and Heathrow. The Economist commented recently: ‘Stage three is already looking more feasible.’ (April 30 1977)

Divide and rule

THIS is not good enough, however, for the employers. They remember that there was a Social Contract in 1974–5 and that it did not prevent the wage explosion after the collapse of the Tory incomes policy. A minority of the ruling class are pressing for tight control of the money supply, so that ‘excessive’ wage increases lead to bankruptcies and sackings. They will look to a Tory government under Thatcher to enforce this policy as part of a general offensive against the workers’ movement. This group will grow if the Social Contract does fall apart.

A majority of the bourgeoisie will, for the time being at least, stick to the idea of a wage limit agreed by the government and the trade union bureaucracy. They prefer a Labour government to a Tory government at present because Callaghan and Healey are more likely to get an agreement out of the TUC than Thatcher and Joseph.

Even if Healey does not get the firm agreement he wants from the TUC to limit the increase in average earnings under Phase Three to 10 percent, big business will expect the government to create an atmosphere in which wage increases are held down to something like this level.

One instrument in creating such an atmosphere is productivity bargaining. The most important section where this weapon is likely to be used is the NUM. Gormley and the right wing will try to trade a pit productivity deal in exchange for not smashing Labour’s incomes policy the way the miners did in 1972 and 1974 under the Tories.

Tucked away in the Treasury’s figures is what could be another crucial weapon for defending Phase Three. The cash-limits on government spending assume a pay rise of 5–6 per cent for public sector workers in the 1977–8 financial year. (Financial Times, April 12 1977) Groups of workers whose wage claims are affected by these cash-limits are council workers, nurses, hospital ancillary workers and teachers. These workers’ current wage agreements all run out between November and January. If the stronger sections of industrial workers are bought off with productivity deals and kitty bargaining, then the public sector workers could face a hammering.

The situation is not as bleak as the foregoing might suggest. Growing numbers of workers are prepared to fight the Social Contract. This is shown by the Leyland, Heathrow and Port Talbot strikes, by the dramatic rise in strike figures in the first three months of 1977 and by the excellent vote won by Tommy Riley of the Right to Work Campaign and other rank-and-file candidates in the TGWU elections.

This willingness to fight must be translated into action. The biggest blow to the Social Contract would be a wave of strikes in August and September after Phase Two expires.

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