MIA > Archive > Cliff > Incomes policy
Several years ago two Fabians, writing in support of the idea of an incomes policy, pointed out very clearly the meaning of such a policy for the right to strike in Britain:
Acceptance of an incomes policy will also have implications for the right to strike. Clearly, to be operable, such a policy cannot have hanging over it the threat of a strike by a dissatisfied union. [1]
The Economist has made the same point strongly and plainly: “The price of securing an incomes policy in Britain will be a willingness to stand up to strikes”. [2] “Another weapon against unofficial strikes is that, quite bluntly, blacklegging must become respectable again”. [3]
And an economist recommended a vote for the Labour Party in the 1964 general election because he felt that Labour was more likely than the Tories to achieve success with an incomes policy. He explained his recommendation in the following way: “Paradoxically, one of the strongest economic arguments for a Labour government is that, beneath layers of velvet, it might be more prepared to face a showdown in dealing with the unions”. [4]
The same point was made by a number of other commentators.
Last year the TUC persuaded the unions to submit their wage claims to it voluntarily for “vetting”. This “voluntary early warning system” could only be the first step towards the introduction of legislation to provide a compulsory early warning system for pending wage claims. However much the trade union “leaders” may support the idea of an incomes policy, they cannot entirely ignore the pressure for higher wages from their own members, and under a voluntary system the government can’t rely on the union leaders to toe the line all the time. New legislation on trade unions is therefore necessary, first of all to make certain that the union brass play their part properly. Legislation is a must if the incomes policy is going to mean anything at all.
In this chapter we shall examine first of all George Brown’s new bill to enforce the early warning system, and then the suggestions for new legislation that have been put forward to the Royal Commission on Trade Unions.
On 24 February 1966 George Brown presented his new Prices and Incomes Bill to parliament. This bill is intended to give new teeth to the incomes policy.
The new law is to apply to all pay claims or any other claims relating to the terms and conditions of employment. [5] Within seven days of making a claim, the claim must be notified to the appropriate minister. If a union does not do this it will become liable to a fine of up to £50. It is made clear in the terms of the bill [6] that not only national wage claims but also all local claims for improved pay or changes in conditions are to be covered by the law.
When an award is made or a settlement reached the minister must be notified within seven days, or the employer will be fined £50. [7] It is difficult to see why any employer should resist this. Every employer will hope, of course, that the government will rule against a pay rise on the grounds that it is too high! We needn’t expect to see many prosecutions under this section.
No pay award may be implemented until 30 days after the minister has been notified. The minister has the power to refer all awards to the Prices and Incomes Board to be considered by Aubrey Jones. If he does decide to refer it, the award may not be implemented for up to three months, while the Prices and Incomes Board considers it. [8] Any employer who pays his workers the extra money they have won in the bargaining session before the government’s permission has been given can be fined up to £500 – a not very likely event! And any trade union or group of trade unionists who try to make their employer pay up immediately by taking any form of action – strike, go-slow, overtime ban, etc – will be liable to be fined £500. [9]
What the press described as a “concession to the TUC” has been introduced into the bill. No proceedings can be taken by the state without the consent of the Attorney-General. This is supposed to be a safeguard ...
There is one other point about this law that is worth noting. Union officials are only liable under the act if it can be proved that they consented to or connived at strike action, or if any “neglect” on their part can be proved. [10] There is thus an additional legal pressure on union officials to oppose unofficial strikes actively, and to fail to provide support for the members whose interests they are supposed to represent. The new law will therefore increase the separation between the full time officials and the rank and file of the unions. As the Observer commented, “What really matters is that the threat of legal action should be so designed as to press the unions themselves to put their own house in order – to give them a leverage in dealing with their own members which exhortation has so far failed to produce”. [11]
The new bill will give union officials yet another excuse for failing to support their members and refusing to call official strikes.
The bill does not give the Prices and Incomes Board statutory powers to enforce the judgments contained in its report. Not yet. But as the Economist put it, “It does represent a plausible thin end of a wedge to test whether legislation can prevent the more flagrant cases where a policy of expansion without inflation has been made impossible by the unions’ high degree of monopoly power”. [12]
The Economist urges that the government should apply the act in particular to what we described in Chapter Five as “keynote settlements”, or what they call “the genuine, annual front-running wage claims in the economy”. [13] And no doubt it is to these national claims that the act will apply first of all. But it can easily be applied to all local negotiations on any matter concerning wages and conditions.
The Labour government set up a Royal Commission on Trade Unions and Employers’ Associations, which has been receiving evidence from “interested bodies”. There has been a spate of suggestions to the Royal Commission on the form that new trade union legislation should take. All sorts of ideas have been put forward, from the Ministry of Labour, the Confederation of British Industries, the Engineering Employers Federation, the AEU, the Tories, etc, etc. These suggestions need to be understood.
The Tories’ proposals are contained in their election pamphlet, Putting Britain Right Ahead:
Certain types of collective agreements, notably those on procedure, should be enforced ...
We also suggest that a new range of industrial courts are required. These would concentrate on the settlement of industrial disputes ...
Our suggestion is to establish a new and powerful Registrar of Trade Unions and Employers’ Associations. [14]
The Economist spelled out, for those who might have any doubts in the matter, what the role of this “new and powerful Registrar” would be: “The fact that only registered unions would have rights under the Trades Disputes Act would mean that people who called lightning unofficial strikes, without due notice and in breach of contract, would be liable for suits for damages”. [15]
In other words, the legal immunity for strike action, won after decades of agitation through the 19th and early 20th centuries, would be lost to any group of trade unionists who asserted their rights by taking strike action, etc, in breach of procedure. This would mean that car workers, for instance, because they would have to follow procedure or face heavy damages in the courts, would have to put up with at least three months’ speed-up in the factories before their cases were judged by the central negotiating body at York.
The Engineering Employers’ Federation also used tough language in its written evidence to the Royal Commission:
The Engineering Employers’ Federation, representing 4,500 firms throughout Britain and Northern Ireland with over 2 million workers, has suggested that unofficial strikers should be fined. They should be subject to a monetary penalty for every day they take part in a strike or other action in breach of procedure, the federation says ...
The engineering employers, in their evidence to the commission, supported the proposals of the Confederation of British Industry for tightening the law so far as trade unions were concerned. They agreed with the appointment of a registrar for the unions to see that the rules were properly applied and in cases of any breach to instruct them to take action. The registrar would have power to strike unions off the register and to impose penalties.
The federation thought that the prohibition of benefits in respect of strikes in breach of agreement might assist unions in resisting pressure from their members for such payments, and it was felt that the unions’ hands might be strengthened if they were required to impose penalties on their members in respect of unofficial strikes. [16]
The motor industry employers are equally anxious to have unofficial strikes prohibited. In the autumn of 1965 they asked Ray Gunter to introduce legislation to enable a panel of employers and union officials to impose fines on workers who broke procedural agreements, and to establish a closed shop in the motor industry so that the trade unions would help to discipline the workers. But Ray Gunter told them it would be difficult to apply only to the strike-prone motor industry, and so in February 1966 they told the Royal Commission they wanted labour courts with statutory powers to fine trade unionists (or employers!) who failed to observe agreed procedures. Their written evidence to the Royal Commission asserted baldly that “legal sanctions will be required if unofficial strikes are to be effectively curbed”. [17]
Unlike the Engineering Employers’ Federation, the motor industry employers are in favour of closed shop agreements provided that they lead to the union officials exercising greater discipline over their members.
The motor industry employers were asked, when they presented their evidence, what would happen if unofficial strikers were fined, with deductions from their pay, and the men then went on strike against the deductions:
“Then we would be in trouble,” agreed Mr R.R. Hopkins, the personnel director of Vauxhall. But he and other employer representatives went on to argue that the fines would have a deterrent effect. [18]
Other employers have had doubts about the idea of fines by the courts, and have suggested alternatives. Thus Mr Stanley Raymond, chairman of the British Railways Board, argued in his evidence to the Royal Commission that:
... it would not be practicable to introduce sanctions enforceable at law against people who took part in unofficial disputes. A method which he would prefer for making a man “think twice” would be to include provisions in agreements with unions so that a man who went on unofficial strike might suffer a suspension of some of his fringe benefits, such as the withdrawal of travel privileges, sick pay and annual leave. He thought there would have to be some form of industrial court – though it would not be a court of law – to determine what the appropriate penalty should be.
The board’s evidence also put forward the view that the unions might accept responsibility for disciplining workers who took part in unofficial actions. [19]
Enter Ray Gunter, minister of labour, with wide experience in the difficulties of being a trade union leader:
Workers in the car industry who are responsible for unofficial strikes might be expelled from the industry, it is suggested in a memorandum sent to trade union leaders and employers by Mr Gunter, minister of labour.
The proposal is intended to work with another, which the employers are considering, that all workers in the industry should be members of a trade union. The suggested 100 percent membership is aimed at enabling unions to discipline men who ignore union policy and instigate unofficial action. [20]
Unfortunately Ray Gunter’s suggestion of a closed shop in the motor industry, and the expulsion of “troublemakers” by union officials acting as unpaid foremen, has met with a number of snags:
Preliminary reactions from confederation leaders suggest that there is little hope of the closed shop scheme being put into effect. With such a conglomeration of competing unions in the motor industry, there would probably be open warfare between them over the sharing out of “compulsory” trade unionists, and there is no sign of the car unions being ready to take the form of drastic action against their members which a closed shop would require. [21]
Ray Gunter did get support, however, from Sir William Carron, director of the Bank of England and president of the AEU. Indeed, Sir William went even further than Gunter. He suggested a closed shop, not just for the motor industry, but for the whole of the engineering industry, with the right of unions to expel troublemakers everywhere. In a memorandum to the Royal Commission, the AEU executive:
... states that if legislation were introduced to enforce the closed shop and the check-off (deduction of a man’s union contribution from his pay packet by his employer), unions “would probably agree also to outlaw forever unofficial strikes”.
In these circumstances, the unions would have far more power to discipline their members, for with expulsion the ultimate sanction leading to the loss of a worker’s job it would be more than a sufficient deterrent to an individual thinking of ignoring his union’s advice. [22]
But again there are snags in this suggestion of Sir William’s. With 32 trade unions in the Confederation of Shipbuilding and Engineering Unions, who is going to guarantee that all the unions would march in step? Above all, is the leadership of any union powerful enough to kick out a mass of workers on strike? As the Times, commenting on the AEU executive’s offer to act as a special disciplinarian in unofficial strikes, put it:
A union agreement to outlaw unofficial strikes would represent only good intentions. Some unofficial strikes are directed as much against the unions as against the employers, and it would be hardly less difficult for the unions to expel a majority of workers in an undertaking than it would be for the government to put them in jail. [23]
The Ministry of Labour, in its evidence to the Royal Commission, was very much more cautious in its recommendations. Very usefully, it considered the various suggestions that might be put forward, pointing out the absurdities of some of the more extreme proposals for curbing strikes. A first suggestion dealt with is the one that unofficial strikes should be open to criminal prosecution:
There is one body of opinion which holds that the answer to this problem is in some way or another to make unofficial strikes illegal. In its ultramontane form this view would seem to be self-defeating, on the simple ground that it would be impracticable. Wartime experience would certainly seem to support this conclusion. Quite simply, in the last resort, it is not practicable, nor would it be conducive to good industrial relations, to try and put a large number of people in jail. [24]
Another suggestion, that “unofficial strikes should be penalised by the loss of entitlement of rights based on continuity of employment” such as pension rights, sickness benefits and so on – Stanley Raymond’s suggestion – also has its unfortunate snags:
Apart from the difficulty of defining an unofficial strike ... and the danger of introducing an inflexible element into the situation, the most serious defect of provisions of this kind is that the penalty is not an immediate one. All that happens is that if and when the worker is dismissed or becomes redundant he does not get the benefits of certain rights he would otherwise have had. It is to be doubted if this would be an effective deterrent. [25]
And there are snags too in yet another suggestion, that instead of banning damaging strikes by law, the law should demand a “cooling-off” period between the date on which the union gives notice of its intention to strike and the actual start of the strike:
In the United States, when a strike threatens to cause a national emergency, the president has the power to invoke a procedure, involving independent inquiry and a vote by the workers on the employer’s last offer, which must be completed before the strike may proceed. Experience of this procedure has not been encouraging. It has been found that the attitudes of the two sides are at least as likely to harden as the reverse during the cooling-off period, and every vote that has been held on the employer’s final offer has, in practice, gone against acceptance. [26]
And:
It would not seem practicable to require a cooling-off period or a secret ballot in the case of unofficial strikes because such requirements could not be enforced. For this reason the suggestions have been considered only in relation to official strikes. [27]
So in the end, as the Ministry of Labour sees it, the only proposal that remains at all viable is that of using the trade unions themselves to discipline their members: “The most promising may be to attempt to induce the trade unions to take more action than at present against unofficial strikes by making procedure agreements for the settlement of disputes legally enforceable”. [28]
It was in a similar vein that the Devlin report wrote on the Transport and General Workers’ Union in the docks:
When its officers negotiate with the employers on the dockers’ behalf, the employers lack reasonable assurance that any agreement which emerges will be accepted by the dockers ... To start with, the T&G must re-establish its power and authority in the three major ports ... It must fight the dissidents on their own ground. This will entail a great campaign in which the union concentrates all its available resources on the docks. [29]
In order to encourage the union officials to be more active in disciplining the rank and file of the unions whenever they show any independence of activity, labour courts will have to be established to enforce the collective agreements that the officials negotiate with the employers:
Collective agreements are not, in the United Kingdom, enforceable in the courts. Collective disputes are settled through the voluntary machinery set up by collective agreements, usually known as “procedure.” A statutorily established arbitration tribunal, the Industrial Court, is available for those who wish to make use of it. If labour courts were to be given jurisdiction over collective agreements, so that disputes could be taken there at the instance of either party, and the court’s decisions were legally binding, this would be the same as making such agreements legally enforceable. [30]
And to guarantee that trade union officials wouldn’t hesitate in disciplining their members, fines should be imposed on them if they couldn’t prove that they did their utmost in this direction:
The argument would then be that it is desirable in the national interest that pressure should be exerted in trade unions to give more attention to the activities of shop stewards and other subordinate bodies. The proposition to which this argument leads would be that in the case of unofficial strikes (or strikes in breach of procedure which in practice are much the same thing) the trade union concerned should be subject to defined penalties, according to the length of time the unofficial strike lasted, unless they could show to some independent tribunal that they had taken all steps open to them to prevent the unofficial strike taking place, or to bring it to an end as soon as possible. [31]
The pattern of labour legislation that is to be has not yet completely crystallised, although its main characteristics are already very clear – the main enemy is the unofficial strike, and to fight the unofficial strike the courts and the trade union officials must join hands.
As the tide of criticism of the unions from the employers, their government and their press has mounted over the last year or so, many union leaders have been hastening to show that they are quite as respectable in their outlooks as the next man, whether the next man is an engineering employer or a press baron.
Thus, for instance, Sir William Carron reacting to an unofficial strike of BEA workers:
I would like to see a most searching examination of the activities at London airport, whether under the auspices of the Ministry of Labour or some other body.
For all I know, MI5 might be as appropriate as any other.
An inquiry is imperative. [32]
In several industries agreements have been signed between unions and employers that lead to penalties for unofficial strikers. Thus in the municipal bus industry, which employs 77,000 people, a provisional agreement has been reached between management and union officials that means that fines will be imposed on unofficial strikers. [33] The unions involved in this were the TGWU, NUGMW, AEU, ETU, NUVB and NUR.
And the NUGMW signed a closed shop agreement with Ilford Limited (a company part-owned by ICI) that guarantees the company freedom from unofficial strikes and unofficial wage demands. The union will police the agreement, expelling any “troublemakers” from the union and the factory in one blow. The union will act as a foreman for Ilford Limited, helping with a drive for “greater productivity.” As the Guardian commented on this agreement, the result will be:
... a much more authoritarian industrial situation with the union wielding greater power over its members ... But the benefit to the individual production worker is less obvious. [34]
One thing is very clear about all the proposals for changes in the labour laws, including George Brown’s new bill – employers and workers are not going to suffer the same sanctions. Thus George Brown makes it clear that only claims by workers for changes in their pay or their conditions are to be referred to the government. There is no suggestion that an employer who wants to introduce speed-up, or who wants to cut a piece-rate, has to ask for the government’s permission first. [35] But workers who want to reduce their speed of work, or who want to raise piece-rates, are supposed to inform George Brown first.
If the early warning system is not followed by workers they will break the law, and they will be liable to fines. Of course, any law that doesn’t have sanctions is useless. The proposed sanctions are financial, but what if strikers or union officials refused to pay the fines? Then of course their property would be seized and they would suffer imprisonment. But nothing like this faces employers who reject wage demands, who increase speed-up, sack workers or make working conditions so abominable that they provoke workers to go on strike.
Also all the suggestions for making workers stick to procedure are very biased, because the agreements on procedure are biased in favour of the employers, as we showed at the beginning of Chapter Seven.
There can be no doubt that all the proposed legislation is a direct attack on working class organisations. This is necessary if the incomes policy is going to work at all. And it is equally clear that if it is to be effective it must lead inevitably to the further joining together of the forces of the trade union bureaucracies and the state on the side of the employers. They need the help of the law to enforce their will on the workers. If at the beginning the new laws seem to be fairly weak and faltering, it is also certain that they will have to be made tougher and tougher.
1. M. Stewart and R. Winsbury, An Incomes Policy, p.18.
2. Economist, 5 June 1965.
3. Economist, 4 September 1965.
4. S. Brittan, The Treasury Under the Tories, 1951-1964 (Harmondsworth, 1965), p.276.
5. Prices and Incomes Bill, 24 February 1966, para.11.
6. See especially Prices and Incomes Bill, para.11, subsection 4.
7. Prices and Incomes Bill, para.12, subsection 2.
8. Prices and Incomes Bill, para.12, subsection 6.
9. Prices and Incomes Bill, para.14.
10. Prices and Incomes Bill, para.20, subsection 3.
11. Observer, 27 February 1966.
12. Economist, 26 February 1966, p.773.
13. Economist, 26 February 1966, p.773.
14. Times, 7 October 1965.
15. Economist, 4 September 1965.
16. Times, 25 January 1966.
17. Guardian, 16 February 1966.
18. Guardian, 16 February 1966.
19. Times, 5 January 1966.
20. Times, 16 September 1965.
21. Financial Times, 16 September 1965.
22. Financial Times, 9 November 1965. The practice of the check-off and the closed shop is well known in the US, where its main effect has been to remove the shop stewards from direct pressure from their members, since they don’t have to go around collecting dues any more. In the US it is also common for the stewards to be paid by management – as Jim Conway of the AEU suggested, they should be paid by the union in Britain. As an American trade unionist commented, “Freed from their regular jobs and from direct contact with the workers, stewards have become indistinguishable from foremen in their appearance, except that they are much harder to find when needed.” See M. Glaberman, The American Working Class in the Sixties, International Socialism 21 (Summer 1965).
23. Times, 9 November 1965.
24. Royal Commission on Trade Unions and Employers’ Associations, Written Evidence of the Ministry of Labour (London, 1965), p.7.
25. Royal Commission on Trade Unions and Employers’ Associations, Written Evidence, p.79.
26. Royal Commission on Trade Unions and Employers’ Associations, Written Evidence, p.79.
27. Royal Commission on Trade Unions and Employers’ Associations, Written Evidence, p.80.
28. Royal Commission on Trade Unions and Employers’ Associations, Written Evidence, p.43.
29. Final Report, Cmnd 2734, August 1965, p.105.
30. Royal Commission on Trade Unions and Employers’ Associations, Written Evidence, p.93.
31. Royal Commission on Trade Unions and Employers’ Associations, Written Evidence, p.7.
32. Sunday Mirror, 13 June 1965.
33. Financial Times, 4 November 1965.
34. Guardian, 29 October 1965.
35. Prices and Incomes Bill, para.11, subsection 1.
Last updated on 6.6.2003