From the Spectator, 24 April 1976, p.14.
Published here with kind permission of the Spectator.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
In that fine novel The Good Soldier Schweik, there is an episode, early on in the volume, where Schweik through no fault of his own is immured in a hospital ward for malingerers. There the sick and infirm are encouraged to volunteer for the front by liberal does of aspirin and vigorous applications of the stomach pump and the clyster. When it came to Schweik’s turn for the treatment he smiled sweetly and said, “Don’t spare me. it’s your duty to the Emperor ... Try hard to think that Austria rests on these clysters and victory will be ours”. And so it seems with a majority of trade union members, if the latest opinion polls are to be trusted. The three per cent, plus tax concessions, package has, apparently, the support of over two thirds of organised workers. A truly magnificent response for Mr Healey and a tribute, perhaps, to the complexity of the deal.
Consider: since last August wage increases have been running at a rate of ten per cent while inflation has been running at something in excess of twenty per cent. The budget policy will introduce a limit of three per cent for wage increases plus two per cent in tax concessions at a time when inflation, at the Chancellor’s best – and highly optimistic – estimate, will be running at ten per cent. Whichever way you write the figures, and the Treasury is developing a fine line in tortured dialectics on the subject, it represents two years of declining living standards.
Not only that the rates of inflation on such items as electricity, gas, public transport and food – all items bearing most heavily on working class budgets – will inevitably rise faster than average prices. Truly the average worker will have to close his eyes and think of England.
It does not end there either. A small item, not much noticed by the commentators or probably by all the trade unionists questioned, is that the present six pound limit is a supplement to wages not an addition to hourly rates. In consequence it is not calculated for overtime and other premium payments. It will also not be part of the calculation of any percentage increase in stage two. Which means that the man getting £66 per week now will have his next increase calculated on £60. Further to that, it is still unclear as to whether the increases under stage two will also be counted a supplement rather than an integral part of the hourly rate. This of course is particularly useful to those firms and industries who have a deal of overtime and shift working but it could be very dangerous in the future. At some stage it will become a part of trade union strategy to get consolidation of all the supplementary additions. When that becomes irresistible it will, at one fell swoop, add as much as fifteen per cent to certain companies’ wage bills, in additional premium payments.
But for all that a majority of trade unionists are showing an admirable degree of altruism about the budget proposals though there are still a number of obstacles to overcome. First of these is the problem of the TUC. To date the members of the General Council have been unnaturally quiet, apart from the ritual negotiating stance of saying: “it’s not enough”. But the apparent calm exterior and the evident desire to come to an accommodation with the Government mask a considerable disagreement between the leading trade union figures. Mr Jack Jones may have abandoned the flat rate scheme but there are still those who see the best interest of their members served in just such a scheme. Mr Scanlon takes the view that a much larger percentage-only scheme is the way to restore differentials and keep his skilled members quiet. All other things being equal he is probably right.
Mr Jones, eager to regain his position as the main architect of any agreement, has produced a plan for a five per cent increase, plus the tax concessions, that would be based on established bargaining units. The figure of five per cent would be calculated on the global wage bill and apportioned according to the priorities decided by the unions. Such a plan would have the advantage of introducing some flexibility into bargaining and allow regrading schemes with differential increases such as might have avoided the recent Leyland difficulties. I say, “might have avoided” because there would be considerable difficulty in persuading production workers to forgo part of their rise for the more highly skilled toolmakers. That is Mr Jones’s scheme and because it is his it must be taken seriously. Indeed, leading figures on the TUC’s Economic Committee were rather miffed to find that the only trade union leader permitted an audience, so far, with Mr Callaghan was Mr Jones. Leading to the suspicion that he was getting the inside track before an agreed policy had been hammered out within the TUC.
In some ways, though, these are marginal considerations. The TUC will arrive at a deal with Healey and Foot. It may be rather more inflationary than the ideal set out in the budget but not much more. The TUC, along with the overwhelming majority of their members, are now convinced that one man’s increase is another man’s price rise. It does not matter that this is an oversimplified view of economics: it is believed, and that is what counts.
The worry for the Government is not the achievement of some kind of deal; it is how long any deal will stick. In the unlikely event that all goes smoothly and phase two holds the line for a further twelve months from next August, it will be the longest period of wage restraint since Sir Stafford Cripps. Sir Stafford had all the advantage of a hangover of wartime controls and siege economy and a much lower level of expectation among the work force. Since then a great deal has changed and, as Mr James Prior sadly remarked in the Financial Times this week, “Public opinion is schizophrenic. It hates the abuse of power and yet does not support a government which stands up to the abuse of power by certain trade unions at the national and shop floor level.”
In this extremely truthful point Mr Prior gets to the heart of the problem and raises the fundamental question: how schizophrenic are the two thirds of trade unionists who accept the Healey package? That is a question that the TUC, Mr Healey and the rest would dearly like to know the answer to. On the estimation of how long the altruism will last must certainly depend the date of the next general election. With this in mind my money is on for October.
Last updated on 2.11.2003