Tony Cliff & Donny Gluckstein

The Labour Party

15. The Labour Government of 1974–79

HEATH CALLED the general election of February 1974 in desperate circumstances. He had lost the 1972 miners’ strike and tried his best to defeat their second strike, which began earlier that month. The country was plunged into black-outs and a three-day working week. The Tories put a simple question to the electorate: ‘Who rules Britain?’ When the lights went out it was obvious that the working class had the potential to rule, but the parliamentary system does not work that way. In the polling booths the choice was whether to put a cross against the Labour or Tory candidates.

The Tory offensive had brought a political generalisation among workers. What the workers were against was clear: against incomes policy, against anti-union legislation, against the Tories. But what were the majority of them for? The answer was still Labour. Not that they were enthusiastic about it. Many illusions had evaporated under the 1964–70 Labour government. But the only positive answer that most workers were conscious of was the election of another Labour Government. Workers had blunted and driven off the Tory attack without breaking with their predominantly reformist politics.

The resultant Labour government disrupted the pattern of growing workers’ struggle:

In the years 1968–74 there was an unstable balance between the political generalisation on the employers' side – incomes policy and industrial relations legislation – and the industrial militancy on the workers' side. Such a situation cannot last for long. The unstable equilibrium can lead to one of two outcomes: to political generalisation of the industrial militancy, or to the decline of sectional militancy.

In fact the unstable equilibrium in the following few years was destroyed by the policies dominating the British working class – Labourism – the nature of which is summed up in the banner of the Kent NUM: a miner outlined against a pithead and looking towards the Houses of Parliament. This is the essence of what Labourism represents in the relations between industrial action and politics. The logic of this dichotomy between economics and politics is that if workers have a claim that brings them up against a Tory government, there is the alternative of a Labour government. But if the claim brings them headlong against a Labour government they have no alternative but to retreat. [1]

When the Attlee government dampened postwar militancy, at least this was bought off with reforms. The 1974–79 government did not even have these to offer.

The bankruptcy of Keynesianism

Keynes had formulated his theories in the 1930s, at a time of high unemployment and falling prices. He and his followers assumed a trade-off between inflation and unemployment: that cutting unemployment might to some extent push the level of prices upwards, while rising unemployment would push prices down again. The modest price rises associated with the thirty years of full employment between 1939 and 1969 seemed to justify this analysis. (This is not the place to discuss whether the post-war boom was mainly the result of the massive arms expenditure).

The trade-off between unemployment and inflation had been formulated arithmetically by Professors Phillips and Paish: when the unemployment rate was 2.5 per cent, wages would rise at about the same annual rate as productivity – 3 per cent or so – and the price level would therefore be stable. But the 1970s exploded the Phillips-Paish theorem. In the 1950s unemployment had been generally 1 per cent or lower. It began climbing in the 1960s and in most years since then has been far above the 2.5 per cent Phillips and Paish believed to be the level at which inflationary pressure would cease. Instead inflation accelerated from an average of only between 2 and 3 per cent in the 1950s to between 3 and 4 per cent m the 1960s and to annual rates of 10 per cent and often more in in the 1970s.

Taking the general level of prices in January 1974 as 100, then by December 1974 it had risen to 117.4; by December 1975 it had jumped to 146.1; and by December 1976 to 166.8. From the beginning of the 1970s there were short inflationary booms in which unemployment fell slightly, followed by deep, more protracted slumps in which inflation dropped only marginally, and unemployment hit the roof. This is what the economists call ‘stagflation’. A reflation of the economy will feed inflation more than it will cut unemployment.

Stagflation was generated by the massive arms spending of the Vietnam War, the ability of multinationals to offset the falling rate of profit by raising their prices, and the bailing out of large bankrupt companies by the national state for fear of economic and social instability.

This combination of recession and reflation swept the Labour leaders off their feet. Keynesianism gave way to monetarism. Butskellism was replaced – to use Stuart Holland’s word – by ‘Howleyism’: a combination of the monetarist policy common to the Labour chancellor Denis Healey and the Tory chancellor Geoffrey Howe. Thatcher's policies took shape before she was elected, for, in the words of Peter Riddell, political editor of the Financial Times: ‘If there has been a Thatcher experiment, it was launched by Denis Healey.’ [2]

Now Keynesianism was put on its head: the way to cut unemployment was to cut inflation. Prime minister Harold Wilson told the 1975 conference of the National Union of Mineworkers:

Inflation is causing unemployment ... The more inflation we have the more unemployment we have. And if we were to tolerate the rates of inflation reached in recent months, then no industry would be secure, no job safe ... Lose the battle against inflation and the battle for full employment is lost before you begin. [3]

Economic history had to be re-written. This is what Callaghan told the 1976 Labour Party conference just after he took over from Wilson as prime minister:

We used to think you could spend your way out of a recession, and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. [4]

Little freedom of manoeuvre for Labour government

The massive development of the multi-nationals, the enormous volume of mobile capital that can be switched from one country to another at the press of a button, has made nonsense of attempts by reformist governments to pursue national policies in isolation. ‘Keynesianism – or reformed capitalism – in one country’ is no more practical than socialism in one country.

Furthermore, British capitalism has been declining steadily relative to other capitalisms for a century. No government has managed to arrest the decline in Britain’s share of world trade which stood at 33.2 per cent in 1899, 22.9 per cent in 1929, 21.3 per cent m 1937, 25.5 per cent in 1950, 16.5 per cent in 1960,10.8 per cent in 1970 and 9.7 per cent in 1979.

As these figures demonstrate, the decline accelerated in the three decades after 1945, a time of the longest and most rapid period of continuous expansion of world capitalism. True, at this time, in ‘absolute terms the British economy has never been so prosperous, nor has it ever expanded so fast’, [5] but its growth was significantly below all other major capitalist countries:

In terms of Gross Domestic Product per head Britain slipped from ninth in 1961 to thirteenth in 1966 and fifteenth in 1971. By 1976 Britain was eighteenth, having fallen behind not just the United States, Canada and Sweden, but Iceland, France, Finland, Austria and Japan as well. [6]

The underlying cause lay in ‘persistently low levels of investment’ which ran at half the levels in competing countries. In 1978 it was estimated:

that the fixed assets per worker in manufacturing in the United Kingdom were only £7,500, compared with £23,000 in West Germany and £30,000 in Japan. Whereas in 1870 Britain enjoyed the highest productivity level amongst the major capitalist economies, by 1970 Britain had one of the lowest. [7]

Labour took office at a time of world economic crisis in which unemployment and accelerated inflation went hand in hand. In Britain the rate of inflation rose from 10.2 per cent in 1973 to 24.6 per cent in 1975. The balance of payments deteriorated from a deficit of £923 million in 1973 to £3,565 million in 1974 on the current account. Unemployment, which had been half a million in 1974, reached a million in mid-1975 and 1.6 million a year later. Internally, British capitalism was weak. Externally it was constrained by those who controlled international credit – the Arab governments with massive petro-dollar surpluses, the central banks and the IMF.

To improve Britain’s competitiveness the government increased the exploitation of the workers. As Healey told the annual dinner of the CBI in 1974: ‘I can assure you that the Government has no intention of destroying the private sector or encouraging its decay.’ It was not the rich, after all, who were going to be squeezed ‘till the pips squeak’, to use Healey’s own oft-quoted phrase. On the contrary, the government wanted ‘a private sector which is vigorous, alert, imaginative and profitable.' [8]

Promises of radical measures ditched

In this situation, even if the right-wingers who controlled the government had been enthusiastic about the bold policies of the Alternative Economic Strategy, their implementation would have been blocked by the massive pressure of international capitalism. Big business and the City clamoured for the economy to be deflated. The Treasury collaborated with the International Monetary Fund to reshape the policies of the elected but ‘profligate Labour Government’. As Joel Barnett, chief secretary to the Treasury remembers:

there were some senior Treasury officials who felt more strongly than others that the IMF was needed to keep a check on this profligate Labour government ... There are some who suspect sabotage by at least one official, senior official ...

US Treasury secretary William Simon got the message – ‘be tough’:

The people in the Bank of England and the people in the UK Treasury knew what had to be done. While they would never say it, because they were fiercely loyal, I think that they were secretly rooting for us, that we would hold fast our ground. [9]

That fierce loyalty of civil servants was in the service of one master – the interests of capital.

The CBI intervened directly in government affairs on behalf of big business. Campbell Adamson, director-general of the Confederation of British Industry, the CBI, recounts:

I remember going through with the council at one meeting a whole list of actions that our side might have to take if Benn really got his way in a White Paper ... We certainly discussed an investment strike ... the possibility of industry withholding its investment. But we also discussed various things about not paying various taxes, and a list – I don’t know that I want to be very specific – but a list of things which in themselves would not have been legal. [10]

The CBI never had to act on its threat. What nationalisation measures were undertaken were few and not part of an overall nationalisation strategy. When British Leyland faced bankruptcy, the National Enterprise Board (NEB) took it over. The same happened to Ferranti, the machine tool company Alfred Herbert, and International Computers (ICL). Once Ferranti’s profitability had been restored it was handed back to private enterprise in 1978. To use Bernard Donoghue’s words: ‘The NEB became a convenient casualty ward for firms the Government wished to rescue from bankruptcy.’ [11]

Labour also bailed out the shipyards:

to the great relief of the private owners who, while remaining the staunchest supporters of the Tory party and denouncing public ownership in all its forms, were in nearly every case ready to take the Labour Government’s cash for their near bankrupt yards. [12]

What happened to the ‘planning agreements’? Draconian government measures by compulsory means were replaced by a voluntary system. In fact ‘system’ is an exaggeration. Just one company – Chrysler – actually signed a planning agreement. The insult was that the government gave Chrysler £162.5 million when the company threatened to close its factory. As Wilson said: ‘the Labour Government [had] been presented with a pistol at its head’. [13] This did not prevent Chrysler pursuing the traditional business practice of ‘take the money and run’. It sacked 8,000 workers, and at the end, in July 1978, sold Chrysler UK to the Peugeot-Citroen motor company, without even telling the government until the deal was signed. Some planning agreement!

Farce gave way to tragedy. Instead of economic reflation we got cuts in government spending, cuts and more cuts; cuts in the November 1975 budget; further cuts in April 1975, February 1976, and the most swingeing axe-blows in July and December 1976. Public spending levels were reduced in 1976-8 by an incredible 9.5 per cent in real terms after allowing for inflation. [14] No area of welfare was safe. Tens of hospitals closed and schools, houses and roads suffered. Nothing Thatcher did later matched the carnage wrought by Labour in 1977.

Incomes policy once more

Capitalist pressure did not cease with Labour’s spending cuts. These could only tamper with the economic problems facing Britain. A more important task for capitalism was the reduction of wages. Since the war this had been Labour’s special talent. The Tories were not nearly so adept, as the following graph shows:

Real wage settlements and incomes policies 1949–1981 [15]

Now the Social Contract came into its own, not only as a means of attacking wages, but also of stabilising British capitalism in its most dangerous period since the 1920s. The policy of collaboration between the union bureaucrats and the government was effective in restraining workers. All the union leaders’ talk about 'the national interest’ could mean only one thing – if Britain was to catch up in the international race, it would have to do so at the expense of the workers. Even when speeches were at their most radical, Labour’s Programme 1973 had left the door open to such a move.

The choice is either for a great contract between government, industry and the trade unions, with all three parties prepared to make sacrifices to achieve agreement on a strategy to deal with the problems of rising prices; or else an interminable debilitating inflation which will help nobody ...

Once more the idea that a Labour government could be a neutral agency straddling the class/nation divide was proved nonsense. Labour could not control the CBI, the IMF or even its own Treasury officials, but the Social Contrick (as it was called) gave it control over the workers.

On 1 July 1975 a fixed flat-rate wage increase of £6 (for those on incomes up to £8,500) was introduced, with a statutory twelve-month interval between awards. The £6 amounted to about 10 per cent of average wages at the time, while the rate of inflation was 24.2 per cent. The TUC General Council complied, and Healey gave it high praise:

the most impressive thing has been the speed with which members of the General Council have themselves reached a voluntary agreement on a limit to pay ... which will mean some reduction in real take home pay for the majority, though by no means all of its members.

I do not think there has been any previous occasion in the history of this country, nor maybe any other country, in which the trade union movement of its own will has not only agreed to such a policy but has agreed it in very great detail. [16]

Not a single union challenged this phase of the incomes policy. On 1 August 1976 stage two of the incomes policy was introduced: a 4.5 per cent increase in wages – at a time that the rate of inflation was 16.5 per cent. Again this meant a serious cut in real wages. Yet again not a single union officially challenged it.

But there were limits to how much the rank and file would endure. By stage three, crucial union conferences – those of the AEU, TGWU, NUM and many others – decided to oppose any third year of wage restraint. From the summer of 1977 the government was obliged to police this phase on its own. However, the union leaders still tacitly collaborated. Only one union resisted stage three with strike action – the Fire Brigades Union which began an eight-week strike for a 30 per cent pay claim in November 1977. The Labour government mobilised all its forces against them – including the use of troops. Despite wide public support the firemen were defeated.

When the government tried to impose stage four in August 1978 – a 5 per cent pay limit, the floodgates broke. The result was the ‘winter of discontent’. Nevertheless, Wilson and Callaghan could still pat themselves on the back. They had achieved de facto union cooperation in incomes policy over a long and tough period, 1975–78.

Blunting workers’ militancy

To carry its policies, the government had above all to blunt the militancy that the working class had shown in 1968–74. By using the trade union bureaucracy it regained by stealth what the Heath government had lost in open battle.

Already under the Wilson government of 1964–70 a whole number of steps had been taken to undermine shop stewards’ organisation. The final fruits were garnered under the Labour government of 1974–79.

In 1964, Wilson had appointed the Donovan Commission to look into union affairs. In 1968 it delivered its report. The main target was clear: shop-floor organisation. To overcome this, Donovan suggested productivity deals, which would replace piecework, deprive the shop stewards of their basic role of negotiating bonus rates, make more convenors and senior stewards full-time so as to distance them from the shop floor, and tighten the links between the senior stewards of the factory and the union bureaucracy. By 1980 69 per cent of workplaces employing over 1,000 manual workers had full-time convenors. The speediest growth in the number of full-time senior stewards was in the years 1975–77. [17]

The pernicious effect of the rhetoric of ‘national interest’ in the mouths of Labour and trade union leaders can be seen if we look at three core sections of the organised working class which had shaken the Heath government to its foundations: Govan on the Clyde, British Leyland and mining.

The advantages of Labour’s carrot over the Tory stick were shown graphically with the introduction of the ‘workers’ participation’ which Donovan had argued for. Govan, the new name for three of the four former UCS yards (the fourth becoming Marathon), had been pioneers in the field. Stewards sat on a joint union-management committee monitoring a harsh productivity deal. They signed a 31-point agreement which contained elaborate no-strike pledges and massive concessions on work practices which gave management the right to impose compulsory overtime.

When shipyard workers at Swan Hunter on the Tyne refused a tough management package tied to a large Polish ship order, Govan scabbed on them. Jimmy Airlie, Govan’s Communist convenor, had led the UCS occupation in 1971 and asked at that lime, ‘Are the other shipyards going to accept our orders and let my men starve?’ But in 1978 he sang a new song. ‘If Newcastle are losing six ships through disputes, we will build them. If not us, then the Japs will.’

Participation also became the rage in the car industry. It led to blacklegging becoming respectable at Longbridge, British Leyland’s biggest factory, and for decades by far the most militant plant in the car industry.

In 1975 senior stewards accepted a three-tier system of participation accompanied by an announcement that 12,000 jobs had to go. Now, instead of seven full-time senior stewards, Longbridge had more than fifty. A gap was created between them and the members. The Financial Times gave fulsome praise of the Longbridge senior stewards. [18]

Derek Robinson, the Longbridge convenor, chairman of the British Leyland combine committee and a leading member of the Communist Party, was more profuse in his praise of ‘participation’ than anyone else. More and more he spoke as the partner of management: ‘we still haven’t won the conception amongst the broad masses of people on the shop floor that they’ve got a vested interest in efficiency no less than we have. It is one of our problems ... if we are able to ... make Leyland successful as a publicly-owned company, then it is self-evident that that will be a major political victory.’ [19]

Under Robinson the Longbridge works committee, instead of serving as a transmission belt for channelling workers’ demands upwards, came to serve the interests of the employers, transferring their orders downwards.

Participation weakened shop-floor organisation, increased sectionalism, and, finally, made scabbing an official tactic. In February 1977 2,365 toolmakers throughout British Leyland went on a one-month strike for separate bargaining rights and restoration of differentials. When the government threatened to sack them, AUEW president Hugh Scanlon declared that this decision ‘has the full backing of all the unions’. Robinson agreed and encouraged all workers to cross the toolroom workers’ picket. In August 1978 the toolroom in the company’s SU Carburettor plant came out on strike. Again both union officials and the leadership of the combine lined up with management. [1*]

The years of participation did terrible damage. The government appointed a tough new manager at British Leyland, Michael Edwardes, who proposed 12,500 redundancies in January 1978. Mass meetings were held in protest, but soon the majority of senior stewards and union officials decided to accept. In November a strike called by the Longbridge shop stewards’ committee against the government’s 5 per cent limit on wage rises petered out without a murmur. On 10 September 1979 Edwardes, with the support of the leadership of the Confederation of Shipbuilding and Engineering Unions, exploited the gap between the shop stewards and their members, and initiated a ballot over the heads of the stewards. This simply asked workers: ‘Are you in favour of the Leyland survival plan?’ without even pretending to spell out what that meant. The vote was ‘yes’ by 7 to 1.

Now Edwardes no longer needed participation. On 19 October he sacked Robinson. In spite of everything, Longbridge was solid, and 57,000 workers came out on strike in BL as a whole. But the picket was small, and little effort was made to spread the strike elsewhere. On 27 October the AUEW called it off, and Robinson himself backed down, leaving the shop floor terribly demoralised.

In short, the strength of the Longbridge workers’ organisation, which had played a key role in supporting the miners in 1972, had atrophied disastrously.

In the case of the miners, the measure used to undermine their ability to struggle was the incentive scheme, a sort of productivity deal giving widely differing incomes between coalfields, and even between individual pits. In September 1974 the National Coal Board and representatives of the miners’ union executive submitted details of a draft agreement. In a ballot 61.53 per cent of the NUM members rejected this.

But the government, represented by energy secretary Tony Benn, and the Coal Board kept the pressure up. NUM president Joe Gormley obliged them by breaking the union’s constitution and balloting again. He hoped to overrule the previous decision but once more the majority (55.6 per cent) rejected the scheme. Now the NUM executive allowed separate areas to negotiate their own local incentive schemes, which Nottinghamshire and others rapidly proceeded to do. This, more than anything, created the deep divisions that were to take such a heavy toll in 1984–85. The needs of the scabbing in that strike were sown by the Labour government in 1977.

The Callaghan government went further than just encouraging scabbing. When the Glasgow dustcart drivers came out on strike in March 1975, the government sent in troops to break the strike – and the army was used again against the firemen in the winter if 1977–78.

The differing roles of the political and trade union wings of the labour bureaucracy were underlined by these events. When In Place of Strife had been proposed back in 1969, mass pressure had forced the TUC to lean on the Labour Party. Now, however, Labour exploited the Achilles heel of do-it-yourself reformism – its openness to generalised reformist politics in the shape of appeals on behalf of the ‘national interest’. Labour’s link with the trade unions now meant that it could use union bureaucracy to police the working class far more effectively than could Heath’s industrial relations courts and all the paraphernalia of the state.

A Chamber of Horrors: The Labour government’s economic record

Despite its efforts, the five years of the 1974–79 Labour government saw the lowest economic growth since the war. The sickness of capital was beyond the cure of its doctors. Britain’s industrial output in 1978 barely recovered to the 1973 level. Between 1953–66 the average annual real growth was 2.9 per cent. In the years 1967–73 it was 3.4 per cent; during 1974–78 it was only 0.9 per cent. [20]

While in office, the government turned the average 2 per cent annual wage rises between 1948 and 1973 into a 1.6 per cent average annual fall. [21] Even after the breakdown of incomes policy in 1978, real wages were still below 1973. [22]

When in the winter of 1971–72 unemployment had mounted to nearly a million – at that time an unprecedented post-war figure, panic had gripped the Tory government and it quickly resorted to a whole number of reflationary measures. Under Labour the loyalty of the trade unions and their members abated the outcry. In January 1975 there were 678,000 people out of work; by December 1975, this figure had risen to 1,129,000, by December 1976 to 1,273,000, and by September 1977 to 1,609,000. Despite a moderate fall 1,300,000 people were still unemployed in December 1978.

The February 1974 Labour manifesto had promised to ‘strike at the roots of the worst poverty.’ Actually the numbers living below the official poverty line rose from 1,410,000 in 1974 to 2,280,000 in 1976. There were 5,260,000 people with income levels no more than 40 per cent above the Supplementary Benefit poverty line in 1974. Two years later there were 8,500,000. [23]

An economist wrote in The Observer of Labour’s wage restraint:

The past twelve months have almost certainly seen the sharpest fall in the real living standards of Britain’s working population in any year for at least a century, including the wars. Indeed, to find a comparable fall, it will probably be necessary to go back to the eighteenth and early nineteenth centuries. [24]

And a Financial Times columnist commented:

I cannot for the life of me think of any reason why anyone should consider voting Conservative at the next general election ... we are already served by about as good a conservative government as we are likely to get. For a start Mr Callaghan’s government has sat out a level of unemployment that no Conservative government would have dared to accept. [25]

Reformism is the product of left ideas generated by class struggle but contained. Upon this soil the labour bureaucracy grows up. But the crisis forced the bureaucracy to go much further than before. It moved from containment to actually attacking the very basis of the movement upon which it rested.

Fortunately, as we shall see in the next chapter, basic workers’ organisation has proved more resilient than pessimists such as Eric Hobsbawm believe. Nevertheless, in the five years between 1974 and 1979 Labour turned the greatest advance in workers’ struggle for fifty years into a retreat. By demoralising the working class Labour positively assisted an ideological advance of the right.

One example will demonstrate.

The National Front: Ugly child of government policies [26]

Mass unemployment, government spending cuts, a decline in i real wages and increasing general social deprivation in the years 1975–78 created conditions for the neo-fascist National Front to nourish. Spring 1976 saw a set of unfortunate Asians kicked out of Malawi, a tragic legacy of British imperialism in Africa. Media hysteria mounted, with the Sun screaming: ‘Scandal of £600 a week immigrants’ (the money went to a racketeering hotelier), the Daily Mirror: ‘New Flood of Asians to Britain’, and the Daily Telegraph: ‘Invasion of Asians Forces Borough to Call for Help’. [27]

The National Front made substantial electoral gains in 1976. In local elections at Blackburn the National Front and National Party together got an average of 38 per cent of the vote; in Leicester the NF got 18.5 per cent. In Deptford (Lewisham), in a council by-election in July 1976 the two parties together won 44 per cent (possibly over half the white vote) – more than the winning Labour candidate, who got 43 per cent. [28]

Instead of campaigning against racism, the Labour Party leadership at the time was pandering to it. On 18 May 1976 Bob Mellish, Labour’s chief whip and MP for Bermondsey, spoke on the ‘influx’ of Malawi Asians: ‘This nation has done all it should have done. Its record is one of great honour and integrity, but I say “enough is enough”.’ It was perfectly natural that the very next speaker should be Enoch Powell, who whipped up further hysteria round Mellish’s catchphrase: ‘Measures were needed: the first was that they should terminate net immigration and say “Enough is enough”.’ [29] The chorus was then taken up by the press and racists far and wide. With Labour spouting racism the cockroaches began emerging from under the stones. They had plenty to feed on.

1977 saw a massive deterioration in working people’s living standards. It is no wonder that the year saw even greater electoral successes for the NF. In the May elections for the Greater London Council (GLC) they stood candidates in 85 out of the 92 constituencies, getting 119,063 votes or 5 per cent of the poll, and beating the Liberals into third place in 33 constituencies. In 1973 they had received only 0.5 per cent.

The Labour Party was paralysed before the fascist menace which by its nature stood outside the rules of the parliamentary game. By contrast, the Socialist Workers Party organised repeated demonstrations against the National Front. The most important was in Lewisham on 13 August 1977, when 5,000 anti-fascists broke through police lines twice and dispersed an NF march. The police then violently attacked the anti-fascists in a battle that raged for hours.

Afterwards, just as had happened in the 1930s, the Labour Party and press treated the fascists and anti-fascists to exactly equal abuse.

Michael Foot, then deputy prime minister, said: ‘The most ineffective way of fighting the Fascists is to behave like them.’ [30] Ron Hayward, general secretary of the Labour Party, ‘saw little difference between the violent demonstrators [by whom he meant the Socialist Workers Party members] and “NF Fascists” [31] The Labour Party West Midland organiser went on in the same vein about the Socialist Workers Party: ‘They are just red Fascists. They besmirch the good name of democratic socialism.’ [32]

At the 1977 Labour Party Conference Sid Bidwell MP described the anti-fascists as ‘hooligans ... who have yet to take their part in responsibility in the real Labour movement’. [33] At the same conference, the delegate from Lewisham East Constituency Labour Party declared: ‘Certainly the answer is not in violent confrontation with the National Front. Who won on 13 August in Lewisham? Only the National Front.’ [34]

On the contrary. The battle of Lewisham was a springboard for launching the immensely popular Anti Nazi League (ANL) in November 1977, in which the Socialist Workers Party played an important role.

Mainly to give a focus for youth against the National Front – the age group where they drew most of their support – the ANL organised its first Carnival in London at the end of April 1978. Its success was beyond everyone’s expectations, bringing 100,000 on a march from Trafalgar Square to a music festival six miles away.

Rock Against Racism (RAR) then grew up alongside the ANL. Huge Carnivals took place in Manchester (35,000), Cardiff (5,000), Edinburgh (8,000), Harwich (2,000), Southampton (5,000), Bradford (2,000) and London again (80,000). In the ensuing weeks and months there was a rash of ANL groups springing up all over the country. [2*]

The NF vote in subsequent elections collapsed. In Leeds it declined by 54 per cent, in Bradford by 77 per cent, even in its East End heartland it dropped by 40 per cent. The ANL did this by taking a hard-hitting campaign on to the streets, into the factories and council estates, and undid some of the political damage wrought by government policies.

Despite all the taunts about ‘red fascists’ and that the ANL was outside the labour movement, it was in fact rooted there. As early as mid-April 1978, before the Carnival, it was sponsored by thirty AUEW branches and districts, twenty-five trades councils, eleven NUM areas and lodges, more than five branches from each of the unions TGWU, CPSA, TASS, NUJ, NUT and NUPE, and thirteen shop stewards’ committees in major factories. [35]

The Labour leadership played no role in the ANL. However the ANL did not ignore the value of winning the support of individual MPs where this was possible. Thus Neil Kinnock, Audrey Wise and Martin Flannery were asked to sponsor and did so. They were joined by fifty local Labour Parties.

In a small way, the SWP was applying the Comintern tactic of the united front. In fighting the NF the SWP did not fall into t he ultra-left trap of writing off reformist organisations. As a revolutionary body its starting point was absolute political and organisational independence from the reformist Labour Party. Membership or commitment to the latter would have strangled the ANL at birth with the cord of electoralism. But this was not enough. As Trotsky put it in relation to revolutionaries in the 1920s:

If the Communist Party did not seek for organizational avenues [to] coordinated action between Communist and non-Communist (including Social-Democratic) working masses ... it would have thereby laid bare its own incapacity to win over – on the basis of mass action – the majority of the working class. It would degenerate into a Communist propaganda society but never develop into a party for the conquest of power. [36]

Obviously fighting the NF was a long way from conquering power, and calling on certain Labour MPs to make a stand would not change the world. Nevertheless it bore out the truth of Trotsky’s assertion that:

The reformists dread the revolutionary potential of the mass movement; their beloved arena is the parliamentary tribune, the trade-union bureaus, the arbitration boards, the ministerial ante-chambers.

[But] we are, apart from all other considerations, interested in dragging the reformists from their asylums and placing them alongside ourselves before the eyes of the struggling masses. [37]

The ANL was one bright spark in a gloomy period. Alas there were precious few others.

The Labour government and the bomb

In the case of unilateral disarmament the Labour government did not ‘fight, fight and fight again’ as Gaitskell had done to win the party conference away from its unilateralism. It simply ignored it.

The 1972 Labour Party conference had carried a unilateralist motion demanding ‘the removal of all nuclear bases in this country.’ [38] The resolution was passed on a show of hands with support from the party executive. The executive’s spokesman was right-winger Joe Gormley!

The 1973 conference had gone further, insisting that the unilateralist pledge ‘be included in the general election manifesto ...’ This time, perhaps with a view to the approaching election, the executive had opposed the motion. Nevertheless it was carried on a card vote by 3,166,000 to 2,462,000. [39]

But on coming to office, Wilson, and later Callaghan, went behind the back of the Commons and spent £1,000 million on the Polaris submarine nuclear missile improvement programme, code-named Chevaline. The Labour Government also entered into an agreement with NATO to increase defence spending by 3 per cent in real terms for the six years from 1979.

Labour and Northern Ireland

As Britain’s oldest imperialist possession, the question of Northern Ireland has been an important touchstone for socialists. Labour’s commitment to the British state has meant that since the Attlee government, the three tenets, of Labour policy on Ireland had been: support for partition; bipartisanship at Westminster – in other words the mutual support by Labour and the Tories of each other’s policies towards Northern Ireland whichever is in government; and the upholding of the right of the Unionists in Northern Ireland to veto any constitutional change. It was Attlee, who in May 1949 enacted the Ireland Act, which stated ‘that in no event will Northern Ireland or any part thereof cease to be part of His Majesty’s Dominions and of the United Kingdom without the consent of the Parliament of Northern Ireland.’ [40]

Wilson was the prime minister who, in August 1969, had sent the troops into Northern Ireland, whence they have not yet withdrawn. When the internment of Republicans without trial had been introduced by Stormont, the Northern Ireland parliament, in August 1971, an emergency debate took place in the House of Commons. By now the Tories were back in office, and Labour officially abstained, although numbers of Labour MPs voted against the government.

On 30 January 1972 in Derry, the British army shot and killed 13 anti-internment demonstrators in what became known as 'Bloody Sunday’. When Lord Widgery, the high court judge, whitewashed the army’s action, Jim Callaghan, for the Labour opposition, declared: ‘The Prime Minister asks for the combined support of the House. He has it.’ [41]

In 1974 it was the Labour government which rushed through the Prevention of Terrorism Act, allowing arrest without charge, as well as deportation and exclusion of suspects from Britain without trial.

In 1976 the political ‘special category status’ for Republican prisoners, which had been won from the Tory administration in 1972, was taken away by Merlyn Rees, Labour’s Northern Ireland secretary. Republican hunger strikes followed in the H-blocks of Long Kesh. This culminated with the death in prison of Bobby Sands in 1981. When news of his death reached the Commons:

There were loud cheers from all parts of the Commons yesterday as Mr Michael Foot, leader of the Labour Party, placed himself squarely behind Mrs Margaret Thatcher in her firm rejection of the demands of the IRA hunger strikers’. [42]

Nine other hunger strikers died without any change of position by Labour.

In the meantime, the Labour leadership was not even ashamed to forge a parliamentary alliance with the Official Unionists in July 1977. Its pact with the Liberals had ended and Labour no longer had an overall Commons majority. In payment for the Orange vote, six extra parliamentary seats were given to Northern Ireland.

Deep divisions between government and party

Relations between the Labour government and the rest of the party had been strained between 1966 and 1970. Likewise under the Labour government of 1974–79, but on a much grander scale. During these years Labour Party Conference was to overrule the executive no less than twenty-three times. [3*]

The executive’s policy recommendations were often critical of the government. Geoff Bish, secretary of the Labour Party Research Department, reviewing relations between the executive and the government, described the vast input of the executive into Labour’s policy process:

Over the past five years, working through a network of subcommittees and study groups, the Home Policy Committee has been responsible for the publication of no less than 70 major NEC statements of one kind or another, including statements to Conference, the 60,000 word Labour’s Programme 1976, evidence to Royal Commissions and direct submissions to the Labour Govern­ment itself. Over 2,000 research papers have been prepared, either within the Research Department or by outside experts. [44]

The result? Nil. The government paid scant attention to resolutions from the executive or conference. By a majority of two to one the Labour Party Special Conference in April 1975 strongly endorsed a ‘No’ vote in the referendum to be held on whether Britain should remain a member of the Common Market. No matter. Prime minister Jim Callaghan went his own way, joining Tories and Liberals in campaigning for Britain to stay in.

The 1977 conference decided by 6,248,000 votes to 91,000 to include abolition of the House of Lords in Labour’s election manifesto. Constitutionally any conference resolution that received two-thirds of the vote had to be included in the manifesto. But Callaghan didn’t give a damn: abolition of the Lords did not go into the manifesto.

The same conference deplored ‘the continuing disqualification from public office of the twenty-one Clay Cross Labour Party members [4*] and demands that the Government introduce a Bill to remove the disqualifications forthwith. [45] This resolution had no more impact on the government than water off a duck’s back.

In 1978 the Labour Party conference rejected the government’s 5 per cent pay rise guideline by 4,077,000 votes to 194,000 – to no avail. The sort of methods used were described by Wilson’s press secretary: ‘His tactic for dealing with the NEC was simply not to turn up at its meetings, and ignoring any decisions it took with which he disagreed.’ [46]

Innumerable times Labour Party conferences went against government policy. While the Attlee government suffered only a few defeats, and on largely marginal issues, in 1974-79 defeat was common.

An unprecedented number of rebellions also took place in the parliamentary party against the government, and this at a time when the government had little or no majority. Although the rebellions could do little to change the course of events, the betrayals had at last become too disgusting for even the most cast-iron reformist constitution to stomach. As P Norton writes: ‘the Parliamentary Labour Party witnessed the most serious division lobby dissent of us post-war history, indeed of its whole history.’

Divisions Witnessing Dissenting Votes of Labour MPs [47]





















Under the Attlee government, in only one case did fifty or more Labour MPs vote against the government; in 1964–66 there were no such votes and in 1966–70 it happened six times; but in 1974-79 it happened forty-five times. [48] The situation deteriorated as each year passed. In the 1974–75 parliamentary session, Labour MPs dissented in 14.5 per cent of all divisions. This rose steadily to reach 45 per cent in 1978. [49] The average number of Labour MPs voting against the 1974–79 government was three times that of 1964–70 and four times the level under Attlee. [50] Norton concludes:

there were more divisions witnessing dissenting votes in the one Parliament returned in October 1974 than there were in the whole of the period, covering seven Parliaments, from 1945 to 1970. [51]

The Labour dissidents were largely organised in the Tribune Group. This met once and sometimes twice a week, principally to debate current parliamentary business. In Neil Kinnock’s words:

ideals must, like any other motive force, be organized if they are to be effective and the Tribune Group’s most frequent and telling activity is to give an organized lead to opinion in the PLP. [52]

Kinnock consistently opposed the 1974–79 government’s right-wing policies, voting 84 times in dissent. The total ineffectiveness of this activity can be measured by the government’s appalling record in all spheres.

The impression may be gathered that even if the PLP, the party executive or conference could not control events, at least the cabinet, perhaps, had some influence. Nothing could be further from the truth. One need only read the cabinet diaries of Richard Crossman and Barbara Castle to see that the prime minister and the chancellor of the exchequer, who hold the key posts in any government, paid little heed to the rest.

Joe Haines, Wilson’s press secretary, was amazed by what he learnt of the way government actually functions:

I find it astonishing that a Labour Cabinet can still tolerate a situation where the Chancellor of the Exchequer only acquaints them with the content of his Budget some twenty-eight hours before he presents it to Parliament. [53]

This could lead to the sort of farcical situation that occurred with the budget of 6 April 1976. The previous day Callaghan had been chosen as the new prime minister. He had no clue as to the budget’s contents! Even more pathetic is this story from the same year:

When the announcement about further cuts in public expenditure were [sic] made on Thursday, July 22, the Cabinet were only told on the previous day ... The Secretary of State for Employment, Albert Booth, was forced to do his own calculations, on the back of an envelope while the Cabinet meeting progressed, about its likely effect upon jobs. [54]

The apparent freedom of the chancellor is illusory. The very secrecy of the budget disguises the real influence of outside forces. This secrecy is, in Haines’ words:

not only absurd and anti-democratic, it is a powerful buttress to the supremacy of the Treasury mind over that of the elected Government’s. [55]

The Treasury for its part reflects the power of capital: business, finance, industry, foreign exchange and commodity markets, economists, monetarists, shareholders, stockbrokers, the City of London and the Governor of the Bank of England, not to mention the speculative pressure of the financiers, whose ability to engineer a sterling crisis always puts Labour government on the defensive. From the inside Haines witnessed what outsiders had suspected all along, that top civil servants were willing to sabotage or cripple a government that did not comply in every detail with the needs of capital as they understood it.

At times the determination of the Treasury to compel the Government of the day to accept the policies in which it honestly believes is ruthless, even to the point where it seeks to create the conditions which make it impossible for the Government to spurn its advice ...

The fall in the sterling exchange rate to below two dollars, which occurred in March 1976, was welcomed by the Treasury and the Bank of England though it came to the surprise and dismay of the politicians. The cuts in public expenditure of over £1,000 million ... following upon cuts of more than £3,000 million which had been decided upon only five months earlier, were a direct consequence ... The pattern then, you can be certain, was exactly the same as it was on countless previous occasions. [56]

Imagine for a moment that the impossible happened – that MPs really controlled the cabinet which in turn controlled the chancellor of the exchequer and the prime minister. This still would not mean that the House of Commons had the power to initiate real changes in the economy and society. Much larger forces than the House of Commons face any government. The fate of every Labour government has shown that any reform which the establishment disliked came up against the undemocratic House of Lords and the monarchy, as well as the top layers of the Civil Service. Behind these are the forces of the police, army and judiciary, the ‘bodies of armed men’ which guarantee the power of the state whichever government is nominally in office.

The contortions of Tony Benn

The position of Tony Benn under the Wilson/Callaghan administration was awkward. He wanted to be the star of the left on the executive and at party conferences, while retaining membership of the most right-wing cabinet Labour has ever had. Even his talents as a political acrobat could not stave off an occasional fall from the tightrope. A couple of cases will illustrate this.

On 30 October 1974 the party executive censured the government for the Royal Navy’s joint exercises with the South African navy at Simonstown, which were ‘directly contrary both to party policy and to clear assurances given by the government itself.’ [57] Benn was one of three ministers on the executive who voted for the censure. Wilson wrote to each saying they had broken collective cabinet responsibility and demanded a promise it would not happen again. If this was not forthcoming, he would interpret this as resignation from the cabinet. [58] Barbara Castle tells the rest of the story:

The three Ministers concerned in the row had got together to draft a letter which Harold had not found satisfactory. Then, before they could meet again, Wedgie [Benn] had written to Harold again off his own bat, capitulating and leaving the other two high and dry. Joan Lestor was furious with him. ‘He’s a very odd chap’, said Mike [Foot] in his typically tolerant way. [59]

Wilson commented with glee: ‘I insisted on the exact words of my demand, which in each of the three cases was finally met.’ [60]

Benn’s behaviour was no more heroic when it came to the 1976 government spending cuts. Donoghue records a phone conversation in the prime minister’s study. Benn rang to say he was under pressure from his constituency activists in Bristol over the cuts. The prime minister replied:

‘Tony, why don’t you make up your own mind? And if you do stay in the Cabinet but continued campaigning against a collective Cabinet decision, you will be sacked immediately.’ I do not know what the small elite group of Bristol activists advised, but Tony Benn remained, and relatively quietly. [61]

Benn was the energy minister who, while speaking left in support of the miners, did not baulk at imposing the incentive scheme-even though it was repeatedly rejected in miners’ ballots. Moreover, between October 1976 and March 1977, in the biggest ever closure programme, Benn totally or partially shut forty-eight power stations, thirty-nine of which were coal-fired. This contrasted with his eager support for the nuclear industry. In his former role minister of technology he encouraged the processing and processing of nuclear fuels and later went as far as arming the police at the Windscale nuclear reprocessing plant. [62] He also shut his eyes to the fact that Windscale ran on uranium fromSouth African-ruled Namibia – despite Labour’s officialopposition to mule with South Africa and the United Nations ban onthe importing of Namibian uranium.

Throughout the years 1974–79 Benn was torn between his executiveand government roles, but let the second dominate. He had been amember of every Labour government since 1964 despite theiranti-working class actions.

Benn’s equivocation followed not only from his position asleader of the left on the executive and also a ‘responsible’minister, but also from the moderate political stance he took in the1950s mid 1960s. Only during the Heath government did he movepolitically to the left. Thus he had not been a member of the TribuneGroup, the Keep Left Group or the Victory for Socialism Group, he wasnot a Bevanite nor a supporter of CND.

At the 1959 Labour conference, Benn followed Gaitskell’s muck onClause Four and, mounting the platform, declared: ‘You cannotattract and keep the loyalty of younger people, if the majority ofthe movement are still thinking too much about the past as they seemto be.’ [63]

When Frank Cousins resigned from Wilson’s cabinet in 1966 as minister of technology in protest at incomes policy, it was Benn who took over his office.

The denouement

The Callaghan government collapsed under the massive pressure of industrial discontent in the winter of 1978–79. In September 1978 the TUC opposed the 5 per cent pay norm; in October the Labour Party rejected it by 4,017,000 votes to 1,924,000. Strikes swept through Fords, the bakeries and provincial journalism. In January it was the turn of railwaymen followed by a two week strikes of petrol tanker and road haulage drivers. The transport and public sectors were drawn into a vast range of disputes.

Disruption was compounded by widespread secondary picketing and an extremely severe winter exacerbated by a local authority dispute which meant roads were not gritted. On 22 January 1,250,000 local authority workers engaged in a one-day national strike, followed by widespread disruption. The tanker drivers settled for a 15 per cent pay rise and the haulage drivers for between 15 and 20 per cent; the local authority workers accepted 9 per cent. [64]

Labour’s pay policies had once more broken down under pressure from below. Labour had failed to fulfil its promises to those who had elected it. But for the ruling class it had achieved a great deal.

Unlike 1969, the ‘winter of discontent’ of 1979 was not part of a rising tide of struggle or class consciousness, but a receding one. The Labour Party had broken the tendency which had been growing under the Heath government, when workers were beginning to challenge capitalist society in action. Though this had been insufficient in 1974 to pose an alternative to electoral politics, it had been a developing force. The high level of strikes in 1979, however, did not break out of the cycle of sectionalism and scabbing which Labour had helped make respectable. The element of growing political generalisation had been lost.

Labour’s success in holding back the workers’ movement provided the background to the general election of May 1979, which the party lost badly.


1*. Labour government deserve mention. During the March 1977 strike for higher pay by 535 electricians, members of the EETPU in BSC’s Port Talbot steel plant, the other 6,500 trade unionists in the plant, members of the AUEW, TGWU and other unions, were instructed by their leadership to cross the picket line. This strike went on for more than two months. The second example is the strike of 5,000 maintenance engineers at London’s Heathrow Airport (1 April to 27 April 1977) when 54,000 other trade unionists, members of the TGWU, GMWU, EETPU, among others, were instructed to cross the picket line.

2*. From 22 April to 9 December 1978 the following ANL groups declared themselves: School Kids, Students, Fordworkers, Longbridge, Civil Servants, Rail (ten branches), Firemen, Busworkers, Teachers – which held a rally of 1,000, Miners – which held a conference of 200 delegates, Engineers, NUPE, Two Halifax Night Spots, Football, Spurs, Everton, Women on one housing estate), Christians, Bikers, Vegetarians, Skateboarders, Skins, Disabled Students, and Art Against Racism and Fascism.

3*. In 1974 there was one defeat over the Common Market. 1975 saw seven, on issues ranging from housing, new towns, import controls, education and NHS to pensions. 1976 saw seven more, on things such as cars for the disabled, housing, the NHS, child benefit and public spending. There were three defeats in 1977 on housing, Zimbabwe and the disqualified Clay Cross councillors. 1978’s four defeats were on the NHS, incomes policy, economic strategy and education. 1979 saw the executive overruled on the election of the party leader. [43]

4*. The Clay Cross councillors had carried out Labour's policy of refusing to implement the Tory government's Housing Finance Act, which forced councils to raise council house rents, and had been surcharged and debarred from holding public office.


1. T. Cliff, Patterns of Mass Strike, in International Socialism 2 : 29, Summer 1985, p. 48.

2. P. Riddell, The Thatcher Government (London 1983) p. 59.

3. H. Wilson, Final Term: The Labour Government 1974–1976 (London 1979), pp. 267–8.

4. Labour Conference 1976, p. 188.

5. A. Gamble, Britain in Decline (London 1981) p. 7.

6. Gamble, Britain in Decline, pp. 19–20.

7. Gamble, Britain in Decline, p. 21.

8. The Times, 15 May 1974.

9. P. Whitehead, The Writing on the Wall (London 1985), p. 193.

10. Quoted in Whitehead, p. 131.

11. B. Donoghue, Prime Minister: The Conduct of Policy under Harold Wilson and James Callaghan (London 1987), p. 149.

12. Donoghue, pp. 148–9.

13. The Times, 7 November 1975.

14. J. Hughes, Public Expenditure: The Retreat from Keynes, in K. Coates (ed.), What Went Wrong (Nottingham 1979), p. 105.

15. This section is based on Chanie Rosenberg’s article, Labour and the Fight against Fascism, in International Socialism 2 : 39 (Summer 1988).

16. R. Eatwell, Whatever Happened to Britain? (London 1982), p. 119

17. The Times, 12 July 1975.

18. W.W. Daniel and N. Millward, Workplace Industrial Relations in Britain (London 1983), p. 37.

19. Financial Times, 7 May 1975.

20. Comment, 5 August 1978 (emphasis added).

21. National Income and Expenditure, May 1979.

22. Calculated from D. Jackson, H.A. Turner and F. Wilkinson, Do Trade Unions Cause Inflation? (second edition, Cambridge 1975), p. 66.

23. L. Panitch, Working Class Politics in Crisis (London 1986), pp. 118–9.

24. F. Field, How the Poor Fared, in Coates (ed.), What Went Wrong.

25. The Observer, 1 May 1977.

26. Financial Times, 29 November 1977.

27. Labour Research, no. 9, 1976.

28. M. Walker, The National Front (London 1977), p. 196.

29. The Times, 19 May 1976.

30. Socialist Worker, 4 October 1986.

31. The Times, 17 August 1977.

32. Morning Star, 17 August 1977, quoted in International Socialism 1 : 101, September 1977.

33. Labour Conference 1977, p. 314.

34. Labour Conference 1977, pp. 310–11.

35. Socialist Review, 2 May 1978.

36. L. Trotsky, The First Five Years of the Communist International, volume 2 (London 1974), p. 93.

37. Trotsky, First Five Years, pp. 94–5.

38. Labour Conference 1972, p. 221.

39. Labour Conference 1973, pp. 301, 312.

40. G. Bell, Troublesome Business: The Labour Party and the Irish Question (London 1982), p. 82.

41. Quoted in Bell, p. 119.

42. The Times, 6 May 1981, quoted in Bell, p. 145.

43. Minkin, pp. 349 and 359.

44. G. Bish, Working Relations Between Government and Party, in Coates (ed.), What went wrong, p. 163.

45. Labour Conference 1977, p. 347.

46. J. Haines, The Politics of Power (London 1977), p. 13.

47. P. Norton, Dissension in the House of Commons (Oxford 1980), p. 428.

48. Norton, pp. 438–440.

49. Norton, p. 437.

50. Norton, p. 431.

51. Norton, p. 428.

52. Tribune, 29 March 1974.

53. Haines, p. 66.

54. Haines, p. 28.

55. Haines, p. 31.

56. Haines, p. 27.

57. B. Castle, The Castle Diaries 1974–76 (London 1980), p. 205.

58. Wilson, Final Term, pp. 60–1.

59. Castle, p. 222.

60. Castle, p. 61.

61. Donoghue, p. 92.

62. See R. Jenkins, Tony Benn, A Political Biography (London 1980), pp. 245–6.

63. Labour Conference 1959, p. 116.

64. A. Taylor, The Trade Unions and the Labour Party (London 1987), pp. 104–5.

Last updated on 25 November 2017