Austerity Britain

by David Kynaston

  The inevitable concomitant to greater prominence was increased exposure to criticism. ‘It takes some spirit,’ complained the Cambridge economist Sir Dennis Robertson in his presidential address in 1949 to the Royal Economic Society, ‘to state clearly and fairly the case for wage reduction as a cure for unemployment or an adverse balance of payments, or the case for the curtailment of subsidies and the overhauling of the social services as a solvent for inflationary pressure, without being prematurely silenced by the argument that nowadays the trade unions would never stand for such things. Perhaps they wouldn’t; but that is no reason for not following the argument whithersoever it leads.’ For the most part, though, there existed by the end of the 1940s a broad-based, bipartisan acceptance that, whether a welcome development or not, organised labour had permanently arrived as a major and unignorable force to be reckoned with.

  The high national standing of the unions by about 1950 – certainly compared with 20 or 30 years earlier or indeed later – owed much to their responsible behaviour during the difficult immediate post-war years. The key figure was the Transport and General Workers’ Union (TGWU) right-wing leader Arthur Deakin, memorably characterised by Michael Foot as ‘a fierce, breezy, irascible, stout-hearted bison of a man who genuinely believed that any proposition he could force through his union executive must be the will of the people and more especially the will of Ernest Bevin [the TGWU’s founder] whose requirements he had normally taken the precaution of finding out in advance’. In effect Deakin saw the unions as an integral part of the labour movement, engaged in a social contract with the Labour government: in return for policies aimed at full employment, extended welfare provision and a measure of wealth redistribution, he would do his formidable best to ensure that the government’s economic stability was not jeopardised by unrealistic wage demands.

  Deakin’s strong preference was for pay bargaining to be independent of any direct government involvement; eventually, faced by overwhelming evidence from Cripps about the extreme seriousness of the country’s economic position, he had led the way to the TUC agreeing in March 1948 to accept the government’s case for a more formal policy of wage restraint – a freeze that, albeit voluntary rather than statutory, lasted for two and a half often difficult years. The government was duly grateful. ‘There can be no doubt that the trade union leaders have been wise and courageous since the end of the war,’ a junior minister wrote in March 1950 to the TUC general secretary, the long-serving, self-effacing Vincent Tewson. ‘It takes a great deal to explain to your members the intricacies of the economic situation and the General Council [of the TUC] has, in my view, done a splendid job.’ Characteristically, the minister added that ‘you have the satisfaction of knowing that you have been acting throughout in the best interests of the Trade Unionists and their families.’18

  The minister was James Callaghan, his personal roots deep in white-collar trade unionism. Indeed, such were the historically intimate links between Labour and the unions – going back to the party’s founding in 1900 – that even in the 1945 parliament, notwithstanding the rise of the professional classes as candidates, almost a third of Labour MPs were directly sponsored by unions (well over a quarter of them by the National Union of Mineworkers (NUM)). These trade union MPs had several defining qualities: almost invariably male; usually sitting for a safe seat; politically unambitious, or anyway seldom promoted from the back benches; obedient to the leadership; and hostile to middle-class socialist intellectuals. As for the unions themselves, they adopted a range of political positions on the left–right spectrum within an overarching loyalty to the Labour Party; the only important union with a Communist executive was the Electrical Trades Union, though the TGWU, NUM and several others had Communists in leading posts. Predictably, it was Deakin who fought a particularly sturdy and effective campaign against Communist influence in the unions, including in 1949 persuading his own union to bar Communists from holding office in it; by about 1953 it was generally reckoned that Communist influence in the unions had dwindled significantly, though it was still far from extinct.19For the British Communist Party, however, the workplace was a crucial location in the larger struggle, given the party’s almost complete lack of success in conventional electoral politics, and it had in its ranks some very determined and motivated people more than willing to play the long industrial game.

  When agreeing in the late 1940s to go out on a limb for the Labour government, Deakin was adamant that a temporary wage freeze should in no way be taken as undermining the hallowed principle of free collective bargaining – a principle at the very heart of British trade unionism. Allan Flanders, the leading academic analyst of industrial relations in this period, explained in 1952 the all-important historical, largely nineteenth-century, context:

  The significance of collective bargaining to the workers might be summed up in the word, self-protection. It enabled them to protect their interests in relation to their employment in three ways. First of all, in the presence of a reserve army of unemployed, it eliminated the competition which would otherwise exist among them to offer their services at a lower price than their fellow-workers for the sake of securing employment. Secondly, by the application of their collective strength they could in favourable conditions compel employers to concede wage advances and other improvements in their terms of employment. Thirdly, collective bargaining by introducing something of ‘the rule of law’ into industrial relations protected individual employees against arbitrary treatment by management in the form of favouritism or victimization.

  Crucially, it was a voluntary system – which for the most part had developed outside the auspices of government or the law courts. ‘It is a form of self-government and as such promotes the democratic virtues of independence and responsibility,’ asserted Flanders. ‘Moreover it has the great merit of flexibility. It would be impossible for industry to operate with a sensitive regard for the varied human interests of all the equally varied categories of workers by means of regulations imposed by an outside authority.’ Such advantages, he was sure, had enabled ‘the voluntary system’ to achieve ‘so decided and widespread an acceptance today’.

  Flanders himself, who had fled from Nazi Germany in the 1930s, was a passionate social democrat and anti-Communist. In 1949 he began a class at Nuffield College, Oxford, on industrial relations, and the fruits appeared five years later in his authoritative The System of Industrial Relations in Great Britain, co-edited with another, younger Oxford academic, Hugh Clegg. The latter, many years later, recalled the very ‘1945’ assumptions behind the ‘Oxford group’:

  We were pluralists, believing that a free society consists of a large number of overlapping groups, each with its own interests and objectives which its members are entitled to pursue so long as they do so with reasonable regard to the rights and interests of others. But we were also egalitarians, wishing to see a shift in the distribution of wealth towards those with lower incomes, and a shift of power over the conduct of their working lives and environment towards working men and women; and, for both these reasons, emphasising the importance of trade unions in industry, in the economy, and in society. We therefore attached special importance to collective bargaining as the means whereby trade unions pursue their objectives.

  The book itself was imbued with the assumption that enhanced trade union power was, if exercised in the appropriate way, an almost unequivocal social and economic good. The appropriate way included moderation in recourse to the strike weapon; the use wherever possible of industry-wide collective bargaining; and such bargaining to be reliant upon long-nurtured codes rather than externally imposed legal contracts.20Altogether, it was in its way a noble vision.

  Unfortunately for its long-term implementation, however, the fact was that British trade unionism, as it had evolved by the early 1950s, had three fateful Achilles heels. The first was the large and growing gap between the leadership and the rank and file. It was not, broadly speaking, an ideological gap. For all the socialist
rhetoric over the years (applicable also to the Labour Party) about the led being well to the left of those leading them, there is little supporting empirical evidence – certainly not for the immediate post-war period. Indeed, in the case of the Electrical Trades Union it was the mass of members who for many years reluctantly put up with a Communist executive. In general, although the process of political consultation with members may have been far from perfect (exacerbated by the block-vote system at conferences), the determinants of the relationship lay elsewhere. ‘The large unions have a great many advantages,’ observed Ferdynand Zweig in his largely positive reading of the trade unions’ role in the lives of the British male workforce, at a time when the 17 biggest unions accounted for some two-thirds of all members. ‘They can give a more skilful and varied service to their members, and they have a greater power of bargaining for improved wages and working conditions, but their service is by their very nature more impersonal and the touch between the leaders and members less direct. From being local in scope they have become national, and so more remote from an individual centre of trouble.’

  There was an inevitable consequence. ‘“The unions are just taken for granted by the younger generation,” is an opinion one often hears,’ Zweig also noted. ‘There is no doubt that the active trade unionist who attends the meetings and takes an interest in the affairs of his branch is less frequent now than previously, and he is less frequent among the young men than he is among the older generation.’ No union was bigger than Deakin’s TGWU (some 1.3 million members by the mid-1950s, the biggest trade union in the Western world), whose governance was subjected in the late 1940s to a devastating scrutiny (not published until 1953) by a young American called Joseph Goldstein. Examining in particular its branch in Battersea, Goldstein found such overwhelming apathy on the part of rank-and-file members that the result was ‘an oligarchy parading in democracy’s trappings’. Deakin himself contributed a pained foreword (‘He has, I feel, misunderstood what he has seen’), but the cumulative evidence was irrefutable. In practice, the growing gap between leaders and officials on the one hand, rank and file on the other, was creating a dangerous vacuum – dangerous anyway from the point of view of the rather Whiggish certainties of the Flanders vision, which trusted to an enlightened leadership being able in negotiations to ‘deliver’ its members.

  Into this vacuum stepped the often unelected and only quasi-official figure of the shop steward, in these immediate post-war years an increasingly powerful presence in the workplace, especially in the engineering and allied industries. ‘I’m not educated enough, it’s like a puff of wind for me to say something,’ one inactive member of the Battersea branch rather forlornly explained to Goldstein when asked if he thought that he as an individual could help to settle the union’s policy. ‘I leave it to the Steward,’ he went on. ‘He’s doing a good job. I speak my mind to him.’ Union leaders were for a long time reluctant even to admit the fact of the shop stewards movement, partly but not only because of its associations with the Communist Party. ‘The opinion still prevails,’ noted Flanders in 1952, ‘that the strengthening of workshop organization might undermine agreements arrived at nationally or on a district basis or otherwise weaken the authority of the trade unions.’ But, he astutely added, ‘the risks involved in the growth of any kind of “factory patriotism” have to be weighed against the need for the unions to make their influence felt in the daily lives of the workers.’21It was not a challenge that most union leaderships – deeply bureaucratic, deeply conservative, deeply grounded in the verities of the past – were well equipped to meet at this point where British society stood on the cusp of major change, above all precisely in the sphere of ‘daily lives’.

  The second fundamental flaw in mid-century trade unionism concerned gender. ‘I believe the majority opinion of women working in factories and mills, especially in large-scale factories and mills, is on the whole favourable to unions, but in a lukewarm way, as expressed in such phrases as: “Unions are useful”, or “helpful”, or “sometimes useful sometimes not”,’ noted Zweig in his survey Women’s Life and Labour. Even so, the stark fact (of which he was well aware) remained that in these post-war years only about a quarter of the female workforce was unionised – a proportion that hardly shifted until well into the 1960s. Zweig emphasised two particularly formidable stumbling blocks to female unionisation. One was the attitude of employers, who ‘more often object to women joining the unions than to men doing so’, and indeed ‘many non-unionist employers give preference to female labour for the very reason that they can more easily keep women out of the unions than men’. The other obstacle, even more important, was the covertly (sometimes overtly) hostile attitude of male trade unionists. Zweig explained how it was an attitude with deep roots:

  Women were historically the great competitors of men on the labour market, often in the past condemned as blacklegs who undermined wages and fair standards and trade union controls, so trade unions were always concerned with keeping women out of the labour market by various restrictions on female labour. When finally trade unions came to see that they have to organise women to get them under control, the organisation took place not for the interest of women but for that of men.

  Accordingly, not only were women’s own unions ‘rarely strong’, but mixed unions were ‘dominated by the interests of the males’.

  Would women fight back, or would they simply keep their distance from the whole alienating, very male world of trade unionism? In terms of both membership and active participation, Pearl Jephcott’s mid-1940s sample of adolescent working girls strongly suggested the latter:

  Their general attitude to trade unions both in London and the North is disheartening. One girl who at 18 was in the Ladies’ Garment Workers’ Union and was prepared to argue with other boys and girls that a union was a good institution, by 20 had lost heart about her cause (when it did not get her what she wanted) and belongs to none now. Another, who was a union member as young as 14, has no use for any union at 18 because ‘they promised they would get us a rise in six months and they never did’. Even the telephonist [aged 19, working at a government office] asks, ‘Why pay your money to keep some man in a job?’22

  In their smoke-filled rooms, few of the invariably male trade-union leaders concerned themselves overmuch if at all. But if these girls represented the future, it was a poor look-out for the vitality of the movement – especially once husbands and wives began to live less in separate designated spheres.

  The third Achilles heel, and ultimately the most serious, was the economic dimension of trade unionism. Although Flanders himself in The System of Industrial Relations strongly attacked free-market economists who were demanding greater flexibility than that provided by industry-wide pay agreements – ‘There is not the slightest possibility of the clock being turned back to individual or to works bargaining over wage rates . . . Only the breaking up of trade unions by a political dictatorship could conceivably accomplish this result.’ – another of the book’s contributors, the young historian Asa Briggs, looked to the future health of the British economy and argued that among employees as well as employers there still remained ‘serious psychological obstacles’ to ‘a sizeable expansion of output in the future’. Briggs added that ‘whether or not the challenge of difficult times is met depends upon a new attitude to productivity and a new willingness to experiment’.

  Put another way, would organised labour be part of the economic problem or part of the economic solution? Written by someone as close to the industrial coalface as anyone, Zweig’s words earlier in the 1950s had a special and ominous resonance:

  Every union has its own character derived from the past; and has crystallized its past experience into rules and customs. The union is the greatest bulwark of industrial conservatism. ‘That has been the practice of our union and it must continue.’ ‘That is our custom, and always has been.’ ‘That goes against our practice and we can’t tolerate it.’ These are the statements on
e hears time and again and reads in the union reports; and the first duty of the union officials is to defend the past against any changes put forward by employers or by their own members. These practices are looked upon as the wisdom entrusted to them by the founders, and they are ensuring that what was won with great difficulty and sacrifice in the past shall not be lost.23

  8

  Too High a Price

  The term ‘supply-side economics’ was not coined until 1976, and it is often claimed that over the previous three decades the fatal flaw of economic policy – characterised as broadly Keynesian macro-economic demand management, in other words fine-tuning from the centre the levels of demand – had been its unwillingness to grapple with the microeconomic supply side. What follows is a brief look at how five key elements on that side of the economy were faring by the early 1950s: transport and telecommunications, training and education, incentives, competition, and restrictive practices.

  In March 1951 the panel on radio’s main current-affairs discussion programme, Any Questions?, was asked if the finances of British Railways would be improved if fares were reduced. ‘Nobody’s going to pay anything to go on the railways as they’re getting now,’ replied the novelist and farmer Robert Henriques bluntly:

  They’re getting worse and worse and worse, and in fact, this country in communications and transport – that’s to say, telephones and everything else as well as roads and railways – is rapidly becoming worse than almost any other in the whole of Europe. The roads are appalling; you get more accidents because the roads are so narrow. You get slower and slower times on the roads because they’re so congested . . . You get your trains that are going at a slower time than they were half a century ago and that is absolutely true . . .