I FOLLOWED THE TERRIBLE story of the Winter of Discontent as a minister within the Department of Employment.

This bitter dispute over pay policy with the unions, fermented by the left, the terrible strikes and social disruption paved the way for eighteen years of Conservative rule. People still remember the images of rubbish piling up in the streets, hospital patients left stranded by strikers and the refusal of local authority staff to bury the dead. It was a horrific period that killed off for ever the concept of a Labour movement founded on humanity and care for one’s fellow man.

Labour’s strong appeal to the electors in 1974 was that it could get on with the unions. By 1978 and 1979 that claim appeared absurd, laughable even.

Of course, it should never have happened. We had weathered the difficult times and then fell apart just when things were picking up. The government was making economic progress against all the odds. The Chancellor, who had to deal with rampant inflation and massive increases in public spending against a background of oil-induced recession, was able to report that unemployment was falling and price rises were being brought under control.

If only we could hold on, we would soon reap the benefits of North Sea oil. But sadly, we never saw the promised land.

Ironically, in 1977/78 pay settlements were not expected to rise above a single figure. Then, for 1978/79, the Treasury calculated that there would be money available from economic growth in the coming year. Callaghan and Healey put a proposal to the six members of the TUC’s General Council who sat on the National Economic Development Council (the so-called Neddie Six) that tax thresholds be raised, giving a boost to the lower paid, on condition that the restrictions on pay continued.

Union leaders, however, simply would not wear this. They told ‘the politicians’ in no uncertain terms that they had borne the brunt of a wages policy for several years, that their members were becoming more and more restless, and that they simply could not hold the line any more.

Jack Jones, they were only too aware, had been defeated at the TGWU’s 1977 conference, which had voted for neither pay restraint nor limitations on free collective bargaining. Quite simply, the unions wanted to grab the benefit of any economic improvement themselves and to hell with politicians and the general election.

The government had also incidentally already added to their problems by the introduction of Child Benefit. This, in union officials’ minds, meant more for women and less for men – a most undesirable re-distribution! There was also great opposition to the government’s decision in 1978 to back the full implementation of massive increases recommended by the Top Salaries Review Body. Indeed, even right-wingers at the PLP told a peeved Callaghan that, on this, he was completely out of touch.

On 20 July 1978, the Cabinet discussed the White Paper on pay: ‘Winning the Battle on Inflation’. At its heart was the infamous 5 per cent pay norm, which, with the inevitability of some drift, would help keep inflation in single figures – and less than the 10 per cent inherited from Ted Heath, a key consideration for the forthcoming general election. The containment of inflation, too, was itself necessary to reduce unemployment.1

Unfortunately, Healey and Callaghan were blind to all the warnings. Healey has since said his biggest mistake was to support Callaghan, who at one time wanted a nil norm, and that they should instead have gone for a more flexible ‘single figures formula’. At the time, however, Healey recommended the 5 per cent norm, saying that although the unions would not endorse it, that was what they were expecting.

The Cabinet, too, was bitterly divided. Peter Shore had reservations about 5 per cent, while Stan Orme was opposed to any norm at all. Albert Booth put the strong Department of Employment point of view, to which I had contributed, that while a norm was required 5 per cent was too low, as would be 7 per cent. Booth, the Secretary of State, would have direct responsibility for handling the forthcoming Winter of Discontent and was deeply affected by it. Harold Walker, the Minister of State who handled pay policy, also gave sound advice but his expertise was too little used.

Supported by Owen and Hattersley, however, Callaghan came down strongly in favour of the 5 per cent, knowing full well that the unions could destroy the policy and with it the government, if they so wished.

Strange negotiations took place with the ‘Neddie Six’. While they suggested that increases be made, they never turned the 5 per cent down flat. In his influential book Prime Minister, Bernard Donoughue said ministers came to the view that the union leaders were acquiescing, without their actually ever saying so. In truth, rather than face a brutal diatribe from Healey, they kept quiet and waited for the general election, which would let them off the hook. There was certainly no understanding whatsoever between the two sides during these negotiations.

Like many, the unions were totally confident that there would be an autumn general election in 1978 and, indeed, believed Callaghan had confirmed this to them privately during a visit to his farm immediately prior to the TUC Annual Congress.

At the TUC, however, Callaghan gave a bizarre rendering of ‘Waiting at the Church’, indicating that the event had been postponed, but no one took the hint. When Jim put an end to the possibility of an autumn election in his broadcast on 7 September, there was great bitterness among union leaders. They now faced a very difficult situation. They could no longer hide the fact that they could not deliver a 5 per cent deal.

I was one of those who advised strongly against an autumn election, believing that we would be beaten in the West Midlands, which was crucial to victory. The reason was that many workers had come to resent our incomes policy, particularly the skilled and those in the profitable car industry.

Not only were the polls against us, but the workers would have voted against the 5 per cent wage restriction in any case. On top of this, other issues such as immigration and the sale of council houses would have sunk us. Those who believe that we could have won then in the autumn are the sort that make their judgements from reading The Guardian, rather than getting out onto the streets.

Had we gone before the Winter of Discontent, however, we would not have been so heavily thrashed as we were. Those of us who advocated waiting did not foresee the way in which the kamikaze left-wing union leaderships would set out on their voyage of self-destruction. We would be beaten by left-wing unions who, in setting out to give Callaghan and Healey a lesson, not only destroyed the wages policy, but also the Labour government and, indeed, the Labour movement.

In his Diaries, Benn records conversations in September with both Jack Jones, who had retired as TGWU General Secretary, and his successor Moss Evans. Jones thought they could get through on pay, using productivity and local bargaining as tools, although he foresaw that cash limits would be a problem for the public sector. Evans was less positive. Turning to the tough situation at Ford, he pointed out that the boss, Terry Beckett, had himself received an 80 per cent increase and the company had made a £264 million profit.

Evans, Alf Allan from USDAW and Len Murray from the TUC tried to persuade Healey, Booth and Hattersley that a fourth year wasn’t on, something that they should have worked out for themselves from Jones’s defeat at the TGWU conference. Evans wanted flexibility and disagreed with Callaghan, who thought ‘the people’ were behind him. The reality is that people are always in support of wage restraint – for other people. They will happily support national wage policies, so long as they are the exceptions. Many of us did our best to support Jim, knowing we were bound to be defeated. The arguments that took place in smoked-filled rooms over beer and sandwiches were echoed in trades union branches, union executives and conferences. They culminated in debates at the TUC and our own conference, which led to decisions critical of the government.

At conference, while Foot sought a ‘fudge’, the hard left – including Militant and Skinner – worked to ensure that the NEC itself would recommend rejection of 5 per cent. Barbara Castle, still smarting a decade on from her humiliation over In Place of Strife at the hands of Callaghan and the unions, was also prepared to stir things up.

The issue facing the NEC was what recommendation to make to conference on Composite Motion 37, which attacked the 5 per cent wage policy and called for a national campaign against wage restraint.

At the NEC, Heffer moved in support of the motion. Callaghan, however, laid down the gauntlet, saying ‘we cannot govern if this is accepted’. Benn, who couldn’t support the left without losing his Cabinet job, cleverly proposed remittance to a special meeting of the TUC–Labour Party Liaison Committee. Finally, the NEC decided to call for remittance of the proposition attacking the 5 per cent policy.

Not that conference took any notice. After a call for loyalty from Foot, delegates chose disloyalty and the motion was carried massively. A loyalist motion, thanking the government and calling on the movement to support it, was narrowly defeated. Too many unions had already been mandated at their conferences, where the issue had been exploited by the left.

The left, immediately after the general election and for many years to come, attacked Callaghan for ignoring these resolutions. This lie was given great credence by Frank Allaun and Ron Hayward at the 1979 conference.

The truth, however, was very different – and this was put on the record by both Foot and Callaghan. After the defeat at conference, the government did see the light and beat a retreat. Indeed, talks to recover the situation began the very next week.

By 15 October 1978, Benn himself reveals in his Diaries,

An agreement was reached, which was approved at Cabinet on 9 November. Sadly, owing to a number of cock-ups, the TUC did not ratify the unanimous recommendation of its own Economic Committee. Two members were absent, including Moss Evans. And he did not brief his two other members, one of whom voted against.

As Callaghan said: ‘It was a great blow to me personally and to the government, when the news reached us on 14 November – six weeks after conference – that opinion was equally divided in the TUC and so the agreement could not come into effect.’

Following the meeting Tom Jackson, the chairman of the TUC General Council and a staunch government ally, was furious. ‘How do you square socialism with the prize going to the strong and the weak to the wall?’ he scorned.

I do not believe that each trades union is an island, that each trades union has a God-given right to get 30, 40 or 50 per cent. Rapacious prosecution of self-interest is nothing to do with trades unionism. The British trades union movement, as expressed in the decision yesterday, has begun to forget where it came from and where it is going.

Tom, a larger-than-life character with his great drooping moustache, went on to attack the alliance between the left, Keith Joseph and Margaret Thatcher. He slated NUPE in particular for scuppering an agreement that would have given so much to their members. Unfortunately, his comments were undermined when it was revealed that his own union, the Union of Communication Workers (UCW), had itself decided to submit a 25 per cent wage increase to the Post Office. This was entirely typical of the situation at the time.

Callaghan himself later claimed that he knew that, with the failure to reach agreement, the government could not survive and he was right. Before that time, however, the whole sorry, sordid tale had still to unfold.

It began on 3 November, when workers at Ford went on strike, disregarding Terry Beckett’s leaflet pointing out that the 5 per cent was government policy! They were more interested in Ford’s profits, better pay and Moss Evans’s certainty that the union could afford a strike. From then on it was all downhill, with claims and settlements spiralling out of control.

The Cabinet in early December bowed to the inevitable and abandoned its 5 per cent limit, moving to 8 per cent without making any statement. But, by now, this was irrelevant. In December, Ford settled for 17 per cent and British Oxygen for 10 per cent. To make matters worse, the oil tanker drivers wanted 30 per cent, road hauliers 25–30 per cent, local authority manual workers 40 per cent and British Leyland production workers 37 per cent. It was impossible to settle at these figures and strikes became the order of the day.

The government had to act: it was time to use one of the sanctions set up to operate against private employers to enforce the incomes policy. Except suddenly there were no sanctions any more. The penalties had to be withdrawn after a left-wing revolt led to a defeat in the House of Commons. Nine Labour members had abstained, including John Prescott. Although they voted the following night with the government on a motion of confidence, they had effectively destroyed it.

By Christmas, the going rate was 15 per cent and there seemed nothing the government could do, except take deep breaths. A new pay code was botched together during the parliamentary recess, which provided for the public abandonment of the 5 per cent limit, strong pay controls in the private sector and comparability in the public sector, together with low pay supplements, and a TUC code against violent picketing.

Jim then headed off to an international conference in Guadeloupe and, worse still, extended his absence by popping off to Barbados for a few days where the press photographers had a field day. The comments of those suffering at home, while ‘Sunny Jim’ was basking abroad, were barely repeatable. Callaghan’s press conference on his return was a total disaster. Asked about the deteriorating situation, Jim dismissed the question as parochial. ‘Crisis? What crisis?’ ran the headlines and enormous damage was done.

The crisis was there for all to suffer and see. As Bernard Donoughue, Callaghan’s adviser, summed it up so well: the country was virtually paralysed and the pickets were ensuring a future victory for Thatcher.3

While the oil-tanker drivers settled for 12 to 15 per cent, by then an official strike of road hauliers led to another 100,000 workers being laid off. When Jim appealed to the TUC, they had to tell him they could not help.

The Cabinet was urged to introduce a State of Emergency and call in the troops. Callaghan, however, a trades unionist through and through, could not bring himself to go so far and we in the Department of Employment strongly supported him.

On 16 January 1979, Callaghan, who was punch-drunk by this time, surfaced to announce the introduction of exemptions for the low paid, comparability for public servants and, on 29 January, he met the full TUC General Council – all forty of them – at 10 Downing Street. The bill for beer and sandwiches must have been enormous! At the end of January, the lorry drivers went back with wage increases of up to 20 per cent and the water workers finally settled for 14 per cent. It reminded Callaghan of Munich.

After the cave-in to the lorry drivers, all hell broke out in the public sector. A million and a half public-service workers went on strike in pursuit of crazy wage demands, shutting schools, hospitals and vital public services across the country. In the grip of one of the worst winters in memory, those ambulances still operating were stopped at the gates by pickets. Members of NUPE and COHSE (the Confederation of Health Service Employees) decided which patients to admit to hospital. In Liverpool the dead remained unburied and the fire service went on strike.4

While Jim was asking how the Cabinet would was survive, Thatcher was taking full advantage. Union-bashing pushed her personal popularity ahead of Jim in the polls and by the beginning of February, the Tories enjoyed a whopping 19 per cent lead. Then, to pile on the agony, on the very same day as the poll, NUPE announced it was going to dump rubbish in the constituencies of members of the Cabinet.

At this time, I recall canvassing with Llin in Newcastle and the reaction was horrific. One man who had been a union branch secretary told us he would never vote Labour again because the wild men had taken over. The reaction was typical.

On 14 February, in a meeting at 10 Downing Street, the government capitulated completely, shunting the 5 per cent inflation target off into the distant future. The TUC’s love token on that Valentine’s Day was a commitment to try to control strike tactics, which were being described as ‘bully boy’ methods even by life-long members appalled at what was being done in the name of trades unionism.

Is it any wonder that, by 15 February, the Tories were 20 per cent ahead? What was surprising to many of us was that we had any support left at all. Our depression deepened even further that day when we learned that, to top it all, Len Murray, the TUC General Secretary, had told Jim that NUPE’s union executive had flatly rejected a deal he had made with the public-sector workers, giving them an 8.8 per cent increase plus productivity and comparability.

This outrageous decision, designed – I thought – to destroy the government rather than protect NUPE’s members, completely demoralised Callaghan. He was also upset by the way that Cabinet ministers themselves did not hold the line. And, to the disgust of those of us in the Department of Employment, he now put Hattersley in general charge of pay.

Slowly, the pay storm of the Winter of Discontent blew itself out, but not until vast increases had been given to civil servants and the teachers had claimed an additional 36 per cent.

There was only one victor from the Winter of Discontent – Margaret Thatcher. Without the industrial disruption caused by militant trades unionism, despite the antics of Benn & Co. we could have won the general election.

While the government had to share responsibility with the Neddie Six and the TUC General Council for the failure to reach satisfactory agreements, the responsibility for the traumatic TV images that led to terrible defeat in the general election of 1979 rests solely with unions such as NUPE and the TGWU.

While Moss Evans and the Ford workers have long since been forgotten, many of us will never forget the damage done by NUPE led by Alan Fisher, Bernard Dix, Reg Race and Tom (now Lord) Sawyer, which through its aggressive tactics destroyed the Labour government and ended, indeed, for ever more the substantial influence of the trades union movement in the Labour Party.

Notes

1. The thinking behind this policy is well set out in Bernard Donoughue’s Prime Minister.

2. Benn, Conflicts of Interest: Diaries 1977–80, 15 October 1978, p. 367. Here Benn also recounts a conversation with Foot about Callaghan possibly resigning over the issue.

3. Bernard Donoughue, Prime Minister, p. 174. The country was

virtually paralysed … The unofficial strike of road haulage drivers was made official, flying pickets were blocking the ports and there was shortage of food and medical supplies … Ministers considered sending tanks into the ICI medical headquarters to retrieve drugs and essential equipment. The strike of water workers had deprived many places in the north west of England of fresh water since the New Year. The sewage workers were threatening to join the water workers. The lorry drivers had turned down a 15 per cent offer and were demanding over 20 per cent. The railwaymen had called a national strike because they wanted a 10 per cent bonus on top of their 20 per cent wage demand. The nightly television pictures of violence and the brutal face of trades unionism were doing terrible damage to the government and to the trades union movement itself. The pickets were ensuring a future victory for Mrs Thatcher.

4. See Donoughue again, pp 167–192.