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International Socialism, November 1977



Productivity: The New Offensive


From International Socialism (1st series), No.103, November 1977, pp.19-21.
Transcribed & marked up by Einde O’Callaghan for ETOL.


Since August 1st there has been no formal limit on wage increases agreed between the Government and the trade unions. Despite the vote at the TUC on the ‘12 months between settlments’ rule the issue of a 10 per cent limit hardly got a hearing. This fact has of course not prevented certain top leaders from refusing to back strikes for more than 10 per cent. The AUEW’s performance over the two week strike at the Leyland bus factories in Lancashire is an obvious case: Scanlon did not even have the excuse of lack of money in the company – Leyland’s truck and bus division has been consistently profitable for years.

Instead of winning considerable increases, the Leyland shop stewards called off the action hurriedly at a mass meeting which was notable for the anger expressed at the executive’s refusal to make the strike official. The settlement was for 10 per cent, with some ‘restructuring’, and a proposed productivity deal, said to be worth up to 15 per cent.

Almost as if it had never departed, productivity bargaining is back. Aprt from a minor interlude during Heath’s Phase 3, it is more than five years since productivity played anything but a marginal role in pay negotiations, but suddenly virtually every union official in the country is looking for a deal somewhere.

The attractions are obvious. ‘Self-financing productivity deals’, in the Government’s words, are outside the 10 per cent limit. They are even outside the 12 months rule. They are a heaven-sent opportunity for the hard-pressed negotiator to preserve credibility with the rank and file, at least in the short term.


And to be fair many of the deals so far done are purely cosmetic and provide a way in which workers can break the Government’s limit without taking the political consequences of doing so. Such deals are entirely different in impact from the ‘genuine deals’ which Labour leaders and the CBI want to see.

‘Real’ productivity deals, as witnessed in the late 1960s are characterised by the fact that they entail a total change in work conditions – changes that, over time, while the relatively large initial wage increases are eroded by inflation, mean a serious threat to job security, earnings, and above all trade union organisation. The aim is to divide the workforce and undermine work-place organisation, either by muzzling stewards, or by incorporating them into a union-management machine which acts as a disciplinary force.

Far from reducing the confidence and organisation of the rank and file, some of today’s deals can even increase it. One example is the productivity bonus which 4,000 Chloride workers recently fought over for eight weeks. Their scheme dates from the era of ‘fake deals’ and has given shop stewards considerable control over output and working arrangements, which management is now attacking.

The first scheme introduced after the end of Stage Two – at the non-union IBM – is a classic example of what Department of Employment officials don’t want. They have even managed to stop all publicity for the 10 per cent increases involved. These are based on anticipated output, as well as that already achieved and are on top of the IBM ‘merit pay plan’ which, to quote the company, ‘traditionally recognises individual productivity’. IBM even consolidated the productivity payment backdated into their earlier 5 per cent increase.

A fake deal of rather more significance to the trade union movement was concluded about the same time for engineering workers at Davy Loewy in Sheffield. This was in fact a simple pay increase (breaking the 12 months rule as well as the pay limit) and clearly part of a wider strategy by the AUEW district committee in Sheffield. The convenor – a Communist Party member – courageously insisted that the deal was not productivity based as the company claimed. A number of other claims were put in at the same time in Sheffield. The Morning Star announced them as part of the lead up to the one-day stoppage by Sheffield engineers against the AUEW’s backing of the 12 months rule. But unfortunately the CP’s ability to lead a district-wide movement, even in Sheffield, now appears to be very limited. Davy Loewy and its sister company Davy International seem so far to have been the only successes.

Such deals do however show the scope for fake schemes, and groups of workers with little muscle, on the staff side for example, may well use them effectively in the months to come. But the Government and the employers are very keen to show they mean something else by productivity. It is this offensive, renewed now under vastly different circumstances to those of 10 years ago, which could prove decisive to workers’ organisation over a very large area of industry.

One need only look at the deals which are on the cards in the mines and in Leyland Cars to see the nature of this offensive. It invokes in part the long-term aims of forcing through higher output per worker, through rationalisation, increased speeds, worsening conditions and new technology. But to achieve what would be a substantial revolution in two of Britain’s major industries inevitably involves breaking down workers’ organisational strength.

In the mines, since 1970, this has shown itself in the aggressiveness of the miners’ national wage demands, with two massive unofficial disputes, and the two national strikes which destroyed the Heath government. In Leyland, despite the corrosive effect of participation and Measured Day Work on shop stewards’ organisation and credibility, an important degree of plant autonomy still exists. With 117 manual pay agreements in Leyland’s 34 car plants, the scope for local advance is still great; things could have rapidly got out of hand if, for example, the recent abortive strike for £20 by Jaguar workers had been successful.

The Government’s strategy here is crucial – for it is of course the employer as well as the policymaker. In the mines the erosion of national strength depends on pit-based-even seam based – bonus schemes. At Leyland the reverse process has been proposed: a deal worth ‘up to £10 a week’ for national bargaining, a common negotiating date, and parity.

The Leyland proposals are no fake. Parity alone would cost some £50 million a year, paid for out of ‘agreed productivity increases embodied in the National Enterprise Board’s 10-year plan’ – so the incentive schemes so eagerly sought by TGWU officials and convenors will have to be paid for by far-reaching changes in work organisation. What the company has in mind is evident from a discussion paper on ‘incentives’ given to union negotiators but, needless to say, not very widely ‘discussed’ among Leyland workers.


The main principles include:

  1. bonus to be on plant-based measurements;
  2. measurement ‘based on plant begetted efficiency and output targets which are linked to the company’s business plans’;
  3. bonus to be paid ‘slightly below budgetted plant targets up to a maximum which will be slightly above the budget’;
  4. budget targets are to ‘adjusted from time to time’ in line with the 10-year plan;
  5. bonus not to be used for calculation of shift, overtime holiday or ‘any other wage or benefit purposes’;
  6. payment only if it is accepted that ‘no claims will be pursued when bonus is not earned – whatever the reasons’;
  7. ‘understanding that the scheme could be withdrawn if it causes industrial action or causes quality problems or is being abused’;
  8. ‘acceptance of efficiency tasks in Leyland Cars Business Plan’; and
  9. acceptance of ‘freedom for the application of industrial engineering techniques and results, and the introduction of new technologies.

With this catalogue of company control under serious discussion clearly all past talk (and agreements) about mutuality (I.e. shop stewards’ veto) on targets, manning speeds etc is in danger of rapidly being ditched – to be replaced by overall ‘agreement’ with senior officials and convenors, some light years away from shopfloor control. While the document detailed here may not be accepted as such, these are the terms on which discussions is proceeding and any public criticism so far has been of the method of payment rather than of principles which will deal a severe blow to plant-level organisation in Leyland cars.


The central problem for the National Coal Board is how to reward miners in the high output pits – such as in the Midlands and South Yorkshire – without a corresponding spin-off in the older pits which are anyway scheduled for closure in the long term. Associated with this is the fact that there is still a pool of experienced mining labour outside the pits that the NCB would like to attract again: while the mineworkers in an area such as South Wales are ageing as fast as the coalfield itself. The NCB is talking of schemes which could yield £20 a week for the most productive Notts miners – but there is no way for a large proportion of the workforce to increase productivity: there is a set amount of time they are at the face with machinery adapted to set conditions. The only way to increase output per manshift (OMS) is to increase the length of the shift.

As we go to press the ballot on the miners’ productivity proposals is proceeding with almost-indecent haste. About a week was allowed for NUM members to consider the proposals, published with four separate recommendations to vote ‘Yes’ in the union’s paper.

The narrow vote on the union’s executive to override the (narrow) vote at the union’s conference meant that miners once again were voting on a coalface-based productivity deal, thrown out in 1974. There are some similarities between new and old. In 1974 the NCB produced as an example a ‘standard task’ of 15 square yards, and a ‘basic task (from which bonus would be achieved) of 11.25 square yards (75 per cent). In 1977 the examples were 20 lineal years ‘standard’ and 15 lineal years ‘basic’. The chief difference was the carrot if the deal was accepted: if 120 per cent performance was reached in 1974 the payment was to be £4.50 a shift (£22.50 a week) – the equivalent under the new scheme would be £42.30 a week – on top of the basic. Of course it is highly unlikely that even the much-canvassed figure of £23.50 would be reached by very many miners. But the larger carrot is significant: an 88 per cent rise as opposed to the 57 per cent rise in the cost of living over the period.

This variation stems partly from the change in calculation: now 94p for each percentage point above basic achieved, as opposed to 67p per square yard in 1974. But the real significance in the new proposals was not the calculation, of course, but how standards are to be set. Here the ballot issue of the Miner, though inadequate, reveals the rotten core of the deal.

A basic ‘model installation agreement’ – not part of the proposals put to ballot – would be agreed nationally. Based on this model, local talks would take place. Standards ‘will be decided by the people best equipped to arrive at them – OUR OWN MEMBERS’ announced Lawrence Daly in the ballot publicity. But the small print did not bear this out. The colliery deals – for each coalface or for the whole the pit – would be based on

‘an assessment... made by method study engineers of the standard task and standard manning ... within 4 weeks of the start of normal operation. NUM observers may be involved. On the basis of this, an installation agreement will be negotiated at local level within 2 further weeks’ (emphasis added).

Subsequently the proposals refer to agreed manning and tasks with disputes being referred by joint committees to area panels. But crucially the initial assessment is in effect a management exercise, and it measure the ‘standard’ task not the basic one: the local deal to be agreed a bare fortnight after the assessment. This process of negotiation was described by Daly as a ‘necessary development of democracy.’

The schemes would directly apply to faceworkers. Others would get from 65 to 40 per cent of bonus, averaged out over a colliery or an NUM or NCB area. The key division between miners’ earnings would thus be at the point of production. Taking some recent output statistics for the South Midlands (a highly productive area). Output per Man Shift (OMS) in hundredweight can be seen to range very widely on a colliery basis: for example, on 3 to 4 foot faces, from 31 cwts. at Donisthorpe to 211 at Rawdon. On the bigger faces there are greater extremes: 59 cwt OMS at Newdigate and 544 at Daw Mill (on over 83 inch faces). And looking at the most productive faces nationally there is also major variation: the extremes in July were 125 cwt OMS at North Gawber pit (Yorkshire) and 922 cwt OMS at Solsgirth in Scotland.


With such variations there is only one option for the Coal Board: every local deal must be different. And if the seams in difficult areas are to carry any incentive bonus then the cumulations will be vastly different from seam to seam, colliery to colliery and area to area.

A more divisive scheme could scarcely be imagined. And division of the NUM’s strength is the key to the whole operation.

Of the two arguments used by the left in the NUM against local incentive schemes – safety and bargaining strength – the latter is by far the stronger. It is unlikely that the Coal Board is seeking to double OMS on 24 inch faces where there are heavy dust problems. Rather it is looking to curtail the possibility of annual claims appealing to all areas at once and to ease the way to a further round of pit closures while maintaining overall output.

Loss of jobs – if not actual redundancies – is thus one aim of the mining incentive scheme, and this is the case at Leyland as well. Another area where such an effect is immediately visible is in printing – though admittedly at a high cost to the employer in the form of redundancy money. The first major productivity deal based on new technology has just been agreed in Fleet Street, after 2 years of talks between the Mirror and the NGA, and the effect is quite plain. Very high rates of pay – over £200 a week – have been bought out with lump sums and manning is being reduced from 455 to 359 through natural wastage and voluntary redundancy. The deal guarantees 10 per cent a year pay increase for three years. With Fleet Street employers clearly shaping up for a battle in the wake of disputes at the Times, Financial Times and Daily Express, productivity deals of this sort may be grabbed by printers looking for an easy way out.

Productivity bargaining ‘for real’ is also being used again as a negotiating tactic. Once more the Government as employer is to the fore. In the air trafffic control dispute – which stemmed from a productivity improvement – the later ‘offers’ involved reducing staffing. In the newly nationalised British Shipbuilders the management is using delaying tactics – avoiding local deals until a framework is proposed at national level for the ‘rationalisation’ of the industry.

A recent pay offer to computer operators at Smiths Industries in London proposed a Stage Two 5 per cent rise from 1st August – with the carrot of a one-year productivity scheme as well, based on increases in output over the average already achieved. The company was in effect offering a productivity-based rise instead of the 10 per cent (or more) that was due.

These are merely examples of a more widespread phenomenon: the fact that companies are still looking to buy out conditions in return for an erosion of effective union organisation. The ploy takes varied forms – Leyland and the mines being the obvious extremes. Despite the selling of numerous working practices, breaks, allowances etc in the late 1960s, the period since 1970-71 has seen a new generation of dodges arise. One example: TGWU baggage porters at Heathrow have a ban on working underground, which in effect is a ban on the new London Transport tube link. This is a restriction which has ‘For Sale’ written all over it. Equally its retention is not of great importance in terms of organisation. But in cases where new demarcations have arisen – say with new welding equipment or printing technology – the sale of a very similar sort of practice could be of enormous advantage to an employer.

Given that managements are already worried about the number of non-genuine, non-self-financing bargains that have been struck and that the Government has now issued statements that productivity deals should not add to unit costs, should not have spin-off effects and should pay for themselves before any money is paid out (an old Heath tactic) how is the fight against such schemes to be organised?


Circumstances now are very different to the late 1960s. Then, the rewards from productivity deals seemed so generous as compared with cost-of-living rises that there was a tendency to jump at them. This is not so today. On the other hand, the attraction of going for productivity-based rises when the alternative is a 10 per cent deal could be very important. Clearly pay claims must be pitched very high to avoid this trap. As always, an alternative must be given to a productivity proposal. Previously mutuality was a favourite way to draw the sting – either it exposed the deal for what it was and led to its withdrawal, or it rendered it much less dangerous. But the issue now is pay above all else, and simply to counterpose mutuality, shop stewards’ right of veto over changes in the status quo on the shopfloor, to productivity proposals, as was done recently in the Morning Star (and by Moss Evans), would be extremely dangerous.

Ideologically the employers have created a favourable climate for pushing through damaging deals. The overall lack of competitiveness of the British economy means that they easily claim that productivity is ‘in the national interest’. On the other hand the level of unemployment is such that any attempt to reduce jobs (which in all but the short term means any productivity deal) can be resisted.

It should now be clear that the new productivity offensive is directed above all at bargaining power, and is closely linked to such concepts as participation, such figures as worker directors and such institutions as planning agreements. The argument against such propositions depends overwhelmingly on the existence of strong and well-informed rank and file organisation. The causes of the recent fiasco at Longbridge – the virtual disappearance of shopfloor organisation and concurrent absorption of senior stewards into management structures – are a timely reminder of what could happen in dozens of ‘militant’ factories up and down the country if ‘real’ productivity deals become the norm.

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