Comrades in conflict

Labour, the trade unions and 1969's In Place of Strife

Peter Dorey

• Publisher: Manchester University Press
• Year: 2019
• ISBN:
  9781526138309
• Edition: 1
• Topic: History
• Subtopic: British History
• Index: History

On the 50th anniversary of In Place of Strife, this scholarly study makes extensive use of previously unpublished archival and other primary sources to explain why Harold Wilson and Barbara Castle embarked on legislation to regulate the trade unions and curb strikes, and why this aroused such strong opposition, not just from the unions, but within the Cabinet and among backbench Labour MPs. This opposition transcended the orthodox ideological divisions, making temporary allies of traditional adversaries in the Party. Even Wilson's threats either to resign, or call a general election, if his MPs and Ministers failed to support him and Castle, were treated with derision. His colleagues called Wilson's bluff, and forced him to abandon the legislation, in return for a 'solemn and binding' pledge by the trade unions to 'put their own house in order' in tackling strikes.

1
Emergence and identification of the problem

It was during the 1960s that concern about industrial relations and trade unionism moved firmly on to the political agenda, whereupon many senior politicians and civil servants increasingly became convinced of the necessity of reform which entailed legislation. Since the end of the Second World War a voluntarist approach had prevailed, under which governments studiously sought to avoid being embroiled in industrial relations, and instead repeatedly insisted that relations between employers and employees, and management and trade unions, could only be improved through the conscious and concerted efforts of those directly involved. In effect, governments promoted a form of industrial self-government, with the State refraining from intervening so far as was deemed practicably possible.

There was, of course, an irony in this, namely that since 1945 successive governments had increasingly intervened in economic and social affairs, via regulation of the economy, Keynesianism, the promotion of full employment and the welfare state. Yet while often welcoming such intervention, due to its positive impact on jobs, standards of living (most notably via higher earnings) and the ‘social’ wage (child allowance/benefit, old-age pensions, unemployment benefit, etc.,), the trade unions still insisted that the State should not intervene in ‘collective bargaining’ between the so-called two sides of industry, nor in the internal affairs and governance of the unions themselves.

However, during the 1960s, four discrete factors fuelled growing concern about industrial relations in Britain, and the conduct of trade unions, namely: emerging evidence of Britain's relative economic decline; the changing structure of British industry; new data about the incidence of unofficial and unconstitutional strikes; the recourse to incomes policies in order to secure wage restraint aiming to curb inflation and the additional problems which accrued from these pay policies. In addition, the critical attention which was increasingly being directed towards the conduct of the trade unions was reinforced by a landmark judicial decision in 1964, which fuelled demands for a formal inquiry into the law pertaining to trade unionism.

Britain's relative economic decline

Although it is widely acknowledged that Britain's economy experienced relative decline during the twentieth century (Alford, 1996; Dintenfass, 1992: chapter one; Elbaum and Lazonick, 1986; Gamble, 1981: chapters one and two; Kirby, 1981; Robbins, 1983: chapter 33; Smith and Polsby, 1981: chapter one; Supple, 1994: 441–58),¹ it was during the 1960s that increasing – or increasingly evident – economic problems moved on to the political agenda: the genial confidence of the 1950s was replaced by genuine concern during the 1960s. A range of economic data and statistics seemingly illustrated the scale and scope of this economic deterioration. For example, whereas Britain had enjoyed 33 per cent of the global market in manufactured exports at the very end of the nineteenth century, its share had fallen to 25.5 per cent by 1950, and then to 16.5 per cent ten years later. By the end of the 1960s it had dwindled to barely 11 per cent. Throughout this time, Britain was being challenged and outperformed by several other advanced industrial countries, such as Japan and West Germany.²

Another clear manifestation of Britain's ailing economy was its low rate of growth, particularly when compared to its economic competitors. By 1960, it had become apparent that, during the previous decade, Britain's rate of economic growth had been lower than that attained by France, Italy, Sweden, the United States and West Germany, and there was little improvement during the 1960s. Indeed, towards the end of the 1960s, Britain's average annual rate of economic growth was just 2 per cent, whereas Japan achieved a remarkable 16.5 per cent, and the six-member European Economic Community (EEC), officially formed in 1957, was enjoying a 6.5 per cent economic growth rate. Incidentally, the relative economic decline of the British economy, and the parallel success of the fledging EEC, were major reasons why Britain subsequently applied to join the Community: economic pragmatism and financial calculation rather than genuine political principle and firm commitment.

In turn, Britain's declining share of world trade in exports, coupled with the domestic economy's low rates of economic growth, yielded a corresponding deterioration in the country's balance of payments during the early 1960s. Britain's overall current balance was in deficit for three out of the five years from 1960 to 1964 inclusive (we were importing more than we were exporting), whereas during the 1952–9 period the balance of payments had consistently been in surplus. What further fuelled concern was that the deficit on the ‘visible’ earnings account increased from an average of £377 million in the second half of the 1950s, to an average of £1,277 million during the first half of the 1960s. That Britain's overall balance of payments account was ever in credit was due entirely to the strength of her ‘invisible’ earnings (i.e. banking, financial services, etc.).

One other economic trend which fuelled growing political concern during the 1960s was steadily rising inflation, for whereas the average annual rate had been 3.5 per cent during the first half of the decade, it had risen to 5.4 per cent by 1969. It was largely to tackle inflation that Conservative and Labour governments alike resorted to a series of incomes policies in the 1960s: attempts to restrain annual pay increases in order to reduce the price increases which employers or companies often invoked to offset them. Yet incomes policies subsequently served to highlight problems of authority within the trade unions, for rank-and-file or local-level members and officials often secured higher wage increases – sometimes by pursuing unofficial strikes – which circumvented those formally agreed by their national-level leaders in London, an issue which we return to below.

All of these statistics and trends prompted rapidly growing political concern about the economic problems facing Britain. Yet crucial though they were, other developments during the 1960s also contributed significantly to the emerging ‘trade union problem’.

The changing structure of British industry

By the 1960s the British economy was increasingly dominated by large firms and industries, due to two factors. First, much of the private sector was characterised by semi-monopolies and oligopolies, as a consequence of corporate amalgamations, mergers and take-overs. These often accrued from the pursuit of ‘economies of scale’ which derived from a conception of economic rationality and industrial efficiency via large-scale production.

Second, alongside these private sector oligopolies were several industries and utilities which had been nationalised by the 1945–50 Labour government led by Clement Attlee, such as coal, electricity, gas, the railways and water. With the subsequent 1951–64 Conservative governments pursuing only very limited de-nationalisation (the term ‘privatisation’ was not deployed at that time), most of these industries remained as State-owned entities throughout the 1960s.

This trend towards private sector oligopolies and State-owned monopolies had four particular consequences which served to push industrial relations reform on to the political agenda during the 1960s. First, industrial concentration mean that there were correspondingly fewer trade unions than had hitherto been the case, but they were larger (in terms of membership). As noted by the 1965–8 Royal Commission on Trade Unions and Employers’ Associations – hereafter referred to simply as the Royal Commission, and discussed fully in chapter 2 – whereas at the start of the twentieth century there had been 1,323 trade unions, with a combined membership of 2,022,000 workers, by the mid-1960s the number of unions had fallen to 574 but their total membership had risen to 10,111,000, with more than half of these members belonging to just nine trade unions. Furthermore, almost 9,000,000 of the total membership belonged to 170 trade unions (Royal Commission, 1968: 7, para. 28). The trend to fewer, but larger, trade unions had also been facilitated by the 1964 Trade Union (Amalgamations, etc.) Act, which streamlined the procedures and requirements which had to be met or adhered to before two (or more) unions joined together.

The second reason why the trends towards industrial oligopolies and monopolies pushed industrial relations and trade unionism on to the political agenda was that, because of the increased size and scope of many industrial enterprises and companies, senior management was increasingly remote from the workers at factory level or on the shop-floor. This served to weaken both the sense of corporate allegiance among employees, and comprehension of why particular decisions were being taken: the larger the firm or organisation, the more likely it is that workers will view senior management as being out-of-touch, especially in the absence of effective consultation or channels of communication.

Crucially, this trend was replicated inside many trade unions themselves, as their increased size resulted in a similar centralisation, and the concomitant upwards transfer of power,³ so that trade union leaders similarly appeared remote to their grass-roots members; negotiations over terms and conditions of employment were increasingly conducted in London, far away from the workplace. This meant that senior or national-level trade union officials also appeared increasingly out-of-touch with their members’ concerns and grievances in the workplace. A major consequence of this was an increase in the de facto authority and factory-floor activism of shop stewards and other local-level trade union officials. These were often able to secure the respect and trust of their rank-and-file members by virtue of their proximity and visibility, and thus their ability to respond immediately to grievances. According to Davies and Freedland (1999: 242) ‘the number of shop stewards was estimated at 90,000 in 1961, and at 175,000 in 1968’.

One study attributed four closely connected characteristics to shop stewards, namely: their identification with the workplace itself and thus the workers employed there; the relative organisational and operational autonomy of shop stewards from their official trade union leadership; their parallel autonomy from senior management control systems when negotiating with local-level managers and factory foremen; the relatively strong influence of shop stewards over local-level pay bargaining (Terry, 1983: 67–8).

The third reason why the trend towards industrial concentration and economies of scale fuelled growing political concern about the character and conduct of Britain's trade unions was that larger companies and industries were more prone to inter-union or demarcation disputes. These occurred when unions competed with each other in claiming that a particular task was part of their jurisdiction, so that it could, or should, be performed exclusively by their members, rather than by any worker(s) belonging to another trade union. As we will note in subsequent chapters, these demarcation disputes were to become a key concern of politicians seeking to reform industrial relations in the late 1960s, most notably the Labour Prime Minister Harold Wilson and his Secretary of State for Employment and Productivity Barbara Castle.

However, there was a fourth reason why the growth of industrial oligopolies and monopolies fuelled political concern about industrial relations and trade unionism, namely that these trends were also rendering the British economy increasingly inter-connected and inter-dependent: a strike in one company or industry was highly likely to have a negative impact on other companies and industries with whom there were trading relationships. As such, even an ostensibly small or local industrial dispute could have much wider repercussions, and cause disruption far beyond the original source.

The incidence and impact of unofficial strikes

As their name clearly implies, unofficial strikes are those which are not called or endorsed by the union leadership. Indeed, such strikes might well be contrary to the advice or instructions of trade union leaders. In such instances, unofficial strike activity would be pursued by ordinary union members acting independently of their union leaders, quite possibly in defiance of them. Political concern over unofficial strikes increased during the 1960s, both because of the afore-mentioned size of many companies and the general inter-dependence of British industry, and becau...

Table of contents

• Cover
• Half-title page
• Title page
• Copyright page
• Contents
• List of tables
• Acknowledgements
• List of abbreviations
• Introduction
• 1 Emergence and identification of the problem
• 2 The Donovan Commission and its Report
• 3 The initial political response
• 4 Cabinet demurrals and diminishing Ministerial support
• 5 Increasing antipathy in the Parliamentary Labour Party
• 6 The trade unions’ implacable hostility
• 7 A ‘solemn and binding’ agreement
• Conclusion
• Bibliography
• Index