Learning nothing, forgetting nothing, successive Labour leaderships since 1979 have trodden the same road to-failure, rejecting any defence of the working class showing the contrast between Tony Blair's stage-managed conference last year and Labour Healey, as Chancellor, was almost booed off the podium.
With Labour likely to form a government for the first time since 1979 it is important to look at what happened last time Ward round.
Labour fought the February Andrew 1974 clection on its most radical manifesto since 1945. The shift to the Left since it had lost power in 1970 was unlike any scen since 1931. This was caused by the traumatic effect on both parliaconflict between the Labour gorbour's attempt to introduce anti-union laws (In Place of Strife) in 1969 and the conflict between the unions and the Heath government of 1970-74.
Between 1970 and 1974 leading Labour MPs 'rediscovered' the wealth of society away from the rich. Shadow Chancellor Healey promised to 'squeeze the rich' through progressive taxation and Labour Leader Harold Wilson defended industrial militancy.
The parliamentary leadershin and the TUC General Council declopca wiacspread agreemcats. based on an understanding that compulsory incomes policy purcontinued by Heath. An agreemicht drawn up in 1985 aão no mention of incomes policy bur committed Labour to various proProgressive tax These included price controls, particularly on food and the large-scale redistribution of wealth Prescription charges were to end pensions to risc and taercarter Do linked to average carnings. Public "industrial democracy extended. ane tories industrial Aclauons Court was to be replaced by ACAS and the extension of trade union rights. A more far-reaching policy of the nationalisation of the top 25 companies had been reiected Yet by the time of the next election in May 1979 unemployment and inflation were rampant, and there were widespread strikes against the government's pay polThatcher won that election - as we bour government go so terribly Mainly because Labour's leaders were unwilling to reject the framework of the capitalist economy. They jettisoned their own promises of reformism in favour of squeezing the working class in an capitalist economy.
When Harold Wilson came to office in March 1974 the economic still on the three-day weck imposed by Ted Heath in response to a mincts stke. Innamon was ac celerating; unemployment was the highest since 1940 and the balance of payments in chronic deficit. The dominant (and determinant) issue throughout the 1974-79 gorsion.
The guiding principle for the Labour government was its 'Social Contract with the unions and working class, of which the agree. first version. Initially this was posca as action against tac exces sive dominant role of irresponsible private hands and crude market forces*.
But from the start this 'contract' was given a different emphases by different people. Union leaders insisted there could be no return to any incomes policy, while party Icaders said that future policy would require 'closer mutual understanding - the basis for talks on a voluntary incomes policy.
Coming into office in March 1974, despite being a minority government, with sincere aspirations for reforms, Wilson's government imposed a freeze on private and council rents, introduced tough price controls and brought in subsidies on basic foodstuffs.
They set out to re-negotiate Britain's terms for entry into the European Economic Community (now KU), and introduced a wealth tax on assets above £100,000. A new Industry Department (run by Eric Heffer and Tony Benn) was created.
A White Paper on changes guarantecing equality for women (which became the Sex Discrimination Act) was produced.
After the October election (with Labour having an overall majority of 3), with persistently high inflation, low investment rates, heavy foreign debt and periodic currency crises, the government steadily slipped away from its left commitBICHL Orthodox From November 1974 onwards, Denis Healey became an 'orthodox' chancellor - no more talk of an irreversible shift of wealth' to the working class, but instead the beanning of extensive cuts in lo. cal authority spending. Contract, at least in the minds of we tarty cadets, was that i tae government clamped down on price increases, improved the 'social wage' (pensions, benelits ete), then the working class would vol. untanty suomit lower pay ac mands.
This informal bargain became phase I of a formal Social Contract in July 1975, which introduced a voluntary limit of 56 a weck on pay rises. This received the overwhelming support of TUC Congress in September and of Labour Party conference in October (though against strong opposition from the CLPs, where the Left was then strong). £6 was in fact interpreted as the sorm for all increases While it appeared to contribute to Price Index stood at 30% in May 1975, but only 14% in June 1976), it also meant a 2.5% real cut in pay At the same time it was obvious that the other side of the bargain'equal sacrifices for all' was not happening either. In the July 1975 budget Healey took C1012 million off public expenditure after a run on the pound.
Stage I of the Social Contract became phase II, with a 4.5% norm (again "voluntary') for pay in. 8% gap between prices and earnings.
During these first two years of the formal Social Contract unemployment increased above 1 million. Ministers and union leaders paid lip service to the 'unaccept. ability of this, but did nothing Union leaders has been able to keep under control what limited opposition there was to Stages I and il of the Social Contract. However growing awareness that the government was setting out to talism at the expense of working tlement and a rise in industrial unThere had been no major industrial oppositon to tae December 1976 round of cuts, falling living standards or rising unemploy. ment, but as the effects hit home workers were less and less willing to put up with this.
The pay policy began crumbling with unofficial strike action, often to restore differentials croded by restraint.
Skilled workers
In March and April 1977 skilled workers in Leyland cars struck for eight weeks, with parallel strikes by skilled workers at British Steel's Port Talbot works and neers defied their union to fight for better shift pay.
More than 1700 shop stewards from car plants, docks, mines, engincering works, building sites and offices met in April to reject a third year of restraint. In the first two months of the year alone over one million days were "lost through industrial action, and opinion polls showed a significant fall in support for pay restraint.
Althoush Levland workers rejected a call by their stewards for an all-out strike for a pay claim of £31 in August, union leaders were in no doubt by the summer that they could not deliver another pay deal of the Stage 1 or Stage 2 type, and any Stage 3 would have to be implemented by the government But this did not prevent union government's imposed 10% limit. ancy managca to persuade lub Congress to accept that there would be a twelve-month gap between wage settlements, and the willingness of the majority of trade union leaders to respect this was responsible for delaying large the spring and summer of 1978. take official action against Stage III lasted for eight weeks from mid-November 1977, over a 30% pay claim. The TUC, despite their supposed opposition to the 10% limit, refused to support them, even when the Labour government used troops in 'Green Goddess' fire engines to break the strike. ceded defeated, accepting a staged offer, and the pay policy remained intact.
Permanent pay limit The lahour leaders had by now effectively decided that pay restraint should be permanent and mored to impose a 5% limit and sanctions against employers who paid more - Stage 4 - from July 19/8.
By now even many national leaders of unions were rejecting the idea of another stage of pay restraint. Both TUC Congress and Labour Party conference (by 2:1) rejected stage 4. Parliament eventually threw out the sanctions element of the policy.
The first Challenge came from the Ford workers in August 1978. After a nine-week oflicial strike they won a 15% increase. They were followca by petrol tanker and road haulage drivers, an unofficial strike by water workers in the North West and the train drivers.
The height of opposition to the pay policy came with the public sector low pay strikes which began at the end of January 1979. NUPE continued this after the other unself eventually settling for the until the end of March. The two servants struck from February 22.
Concordat
Despite this clear rejection of pay restraint by workers, in the run up to the General Election Labour Party and TUC leaders drew up a 'Concordat' in carly 1979, tions on picketing and secondary The cause of Labour's failure polls) was that they operated solely within the confines of capitalist economics. Faced with a recession, their 'solution' was to ditch any insist that the working class pay ing standards, unemployment and cuts in public spending.
Healey went cap in hand to the cause of that booing in 1976) for loans, accepting their terms. This in turn meant even greater cuts because of the interest which needed to be paid.
An electorate whose living standards in late 197% were no better than in 1973, and who needed a 14.5% increase in pay to keep pace with inflation was not enthusiastic at une thougat or re-ciecting Labour. On top of this, Labour had tract betweenthe government and ine working class.
While union leaders, under pressure from their rank and file, eventually rejected the Labour government's solutions, they had no alternative of their own. Lightcen years of Tory devastation were
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