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From: Labour Affairs: Editorials
Date: January, 2022
By: Editorial

Let's avoid a return to the 1970s

The TUC have called for a large demonstration in London on June 18th in the face of the cost of living crisis. “Working people have had enough. Everything’s going up but our wages. Join the trade union movement in London to tell this government: we DEMAND better!” reads the TUC blurb. They are right and a massive march on that day would be most welcome.

But ‘We Demand Better’ is somewhat vague. Does it mean that workers should receive wage increases that match inflation so that there is no reduction in their standard of living? It’s an important question. The situation today has many similarities with the situation in the 1970s. Then, two large increases in the cost of oil lead to a high inflation in prices. Workers demanded equivalent wage increases. In the 1970s the unionisation rate was some 40% and they were able to extract the wage increases that they demanded. However companies matched these wage increases with price increases to protect their profits. This led to the infamous wage-price spiral inflation of the 1970s. By 1979 Margaret Thatcher had become Prime Minister.

The election of the Thatcher government in 1979 is usually described as representing a move to the right by British society but that is an over-simplification that doesn’t really help us understand what Thatcher represented. It also avoids the culpability of the labour movement in creating the conditions in

which someone like Thatcher could thrive. A more accurate description would be that she represented the reaction of the electorate to the political and economic future that the labour movement had threatened to create through its irresponsible behaviour in the 1970s. At that time the trade union movement had shown by its actions that it was in control of most aspects of civil society from the disposal of the dead to the people’s access to energy and light. The question that dominated the concerns of civil society was how that power was to be used in the future. Up to then that power had been seen to assert itself as a disruptive power used in a sectional interest. What remained to be seen was whether it could be used responsibly by putting it to a more constructive use in the wider society.

In many ways the answer was given in the rejection of the 1977 Bullock Report on industrial democracy. That rejection came about through the dominant influence of a narrow sectional mindset among most of the trade union leadership and an ideologically constrained left-wing in politics. Those in the leadership of Labour politics who saw the problem in clear electoral terms, being unable to bring these elements into line, were then deemed to be an ineffective element in an evolving situation that could not be sustained indefinitely. The electorate was confronted with a Labour leadership that was unable to influence the way in which the enormous power of the trade union movement was No. 329 - June 2022

being used. Consequently, the Labour Party was seen to offer no alternative to the ongoing prospect of continued industrial strife and anarchy.

On the other hand, the Tory party under Thatcher was seen to represent the only escape from that unthinkable future. After winning the 1979 election and bedding in her administration, Thatcher set out, through a series of legislative actions, to meet the challenge that the trade union movement had laid down and although it fought back the trade union movement now found themselves no longer able to rely on the support, or even the passive acquiescence, of civil society. She also embarked on economic policies that had the effect of diminishing the importance of that sector of the economy that had provided the main centre of trade union power – policies that witnessed the acceleration of the move of the British economy away from manufacturing

in favour of the service and financial sectors.

The TUC and the unions must avoid fighting the cost of living crisis we have today in the same way that they fought it in the 1970s. They need to make much more explicit the distributional nature of this struggle if they are to fight it effectively. It may have to be accepted that some drop in the standard of living will be unavoidable if the current disruption in the supply of goods and energy continues. The TUC and unions must demand that they be active participants in determining how any drop in the standard living is distributed through society. The TUC had an active input into the design of the Furlough scheme to deal with the pandemic. They should insist on an equally active role in designing a response to the cost of living crisis. A simple call for an increase in wages to match price increases is not enough.