By April, the National Board for Prices and Incomes was established under the chairmanship of former Tory MP, Aubrey Jones, which required voluntary wage restraint as a first stage. Wilson, however, was able to sell the incomes policy to a sceptical trade union membership as “a planned growth of wages”. There was much talk of economic planning and George Brown, the Minister for Economic Affairs, came forward with his short-lived National Plan. It failed, of course, because it is not possible to plan within the anarchy of capitalist production, where the blind forces of the market decide, underpinned by the profit motive. Under capitalism, it is not the government that decides economic policy, but the boardrooms of the major monopolies.
The TUC, while opposed to any statutory enforcement, backed Labour’s voluntary approach to wages. But, as with all incomes policies under capitalism, the Prices and Incomes Policy was simply a means of boosting profits at the expense of wages, to the particular disadvantage of the low paid. As Marx explained, profit comes from the unpaid labour of the working class. All else being equal, wages and profits rise and fall in proportion to one another. If wages are forced down, then profits will rise, and vice versa. The class struggle itself is nothing more than a struggle for the division of the surplus value produced by the workers.
In April 1966, given Labour’s slim parliamentary majority, Wilson called another general election and won a landslide victory. After 13 years of Toryism, people were keen to give the Labour government a chance to work. Under these circumstances, the trade union leaders put their full weight behind the government’s Prices and Incomes Policy, which was supposed to be in the interests of the low paid. This went hand in hand with a remorseless drive by employers and government to push up profit levels through the introduction of so-called productivity (more accurately, “profitability”) deals.
The second stage of the incomes policy, which lasted six months from July 1966, took the form of a government-imposed wage freeze, followed by harsh deflationary measures. This then gave way to a ceiling on wages of 3.5 per cent, coupled with further increases in productivity. Frank Cousins, the general secretary of the TGWU, had joined the Labour government in 1965, but when Wilson introduced statutory enforcement powers into the Prices and Incomes Act, he resigned in protest, signifying an underlying discontent with the drift of the government.
In the years since 1960, productivity deals, according to the Prices and Incomes Board, probably affected no more than half a million workers. By June 1969, they covered some six million workers, or 25 per cent of the total workforce. This constituted a relentless drive to increase the intensity of labour and boost the rate of profit.
In spite of his huge majority, Wilson remained within the parameters of capitalism and in effect attempted to run the system better than the Tories. Socialism was regarded as suitable for May Day speeches, but totally inappropriate for the here and now. At the Labour Party Conference, Wilson told delegates
“we cannot afford to fight the problems of the Sixties with the attitudes of the Social Democratic Federation, nor, in looking for a solution to these problems, seek vainly to find the answers in Highgate cemetery.”[2]
A month after the 1966 general election, the government was faced with a seafarers’ strike against poor wages and conditions. Men were expected to work a 56-hour week for less than £16 a week. This was the first official strike of seafarers since 1911. It was an important reflection of the changes taking place in the trade unions generally. This was especially the case in the National Union of Seamen (NUS), which, as we have seen, was previously a company union and its leadership had scabbed on the 1926 General Strike.
In the seafarers’ strike, the union’s main demand was for a 40-hour week, a monthly wage of £60 and direct overtime rates for anything above the 40 hours. The right-wing Economist made the bosses’ position crystal clear: “The price of securing an incomes policy in Britain will be a willingness to stand up to strikes.”[3] Wilson, who certainly was not looking in the direction of Highgate, but rather Threadneedle Street, came out promptly against the strike on the grounds that “this would be a strike against the state – against the community. But this isn’t all. What is at issue here is our national Prices and Incomes Policy”.
To underline its determination to defeat the seafarers, and while appealing to the “national interest”, the government announced a state of emergency on 23 May. Wilson went so far as to use the “red scare” card against the strikers, accusing the NUS executive of being in the control of a “tightly knit group of politically-motivated men” who, for their own nefarious reasons, were “forcing great hardship on the members of the union and their families, and endangering the security of the industry and the economic welfare of the nation.”
John Prescott, then a leading left-wing official in the NUS, attacked the Wilson Labour government for its stand: “There is a wealth of evidence we could produce to show that behind the government, in its resistance to our just demands, stand the international banks, the financial powers which really direct the government’s anti-wages policy…” thundered Prescott.
“The goodwill of the bankers, the ill-will of the working class”, he continued. “How familiar a story that is of Labour governments, when we cast our minds back to Ramsay MacDonald and the 1929-31 government. It was the trade unions then that stiffened the Labour Party against the attacks on unemployment pay. They must rally to the cause in the different circumstances of today.”[4]
Today, an older and mellower John Prescott, serves as deputy PM in the Blair government. He could do worse than to reread his former speeches before attacking striking firefighters and others. Unfortunately, some memories are short. Despite the attacks of the Wilson government, the seafarers were successful in getting a wage rise above the norm and a 42-hour week.
The Labour government had set up the Devlin Inquiry into the docks, which recommended fewer companies and more job security – but linked to a much scaled-down workforce. While it recommended some favourable changes, such as higher guaranteed pay, sick and accident pay, and a shop stewards system, the control of labour was to a considerable extent to be handed back to the employers. The disease in Britain’s ports would not be cured through further exploitation of dock labour, but only through reorganisation based upon nationalisation under democratic workers’ control.
The report met widespread opposition among the rank-and-file dockers, who engaged in protest strikes against the proposals. “Don’t Devlinise – Nationalise!” read the London Liaison Committee posters. Unfortunately the action was not sufficient to defeat Devlin’s reorganisation plans, which was eventually to lead to containerisation on the docks and mass redundancies.
Of course, workers are not against modernisation. New methods should be used to shorten hours, lighten the burden of work, and improve working conditions. But under capitalism, new techniques are used to make fewer workers work harder, while the remainder are thrown on the scrap heap. Modernisation under capitalism is used not to ease work, but to maximise profits. “I’m not opposed to mechanisation as such”, stated London dockers’ leader Jack Dash. “I am opposed to mechanisation when it puts men on the dole. Progress measures by the degree of automation you can get without considering the plight of the displaced worker is not progress at all.”[5]
Containerisation on the docks was to provide the employers with greater flexibility and the power to redirect work from the more militant ports to those less well organised. The struggle against containerisation was to end up with the jailing of five dockers (the “Pentonville Five”) in July 1972 and the threat of a general strike. The policy of wage restraint pursued by the Wilson government became deeply unpopular. The docks’ strike in 1967 was quickly followed by the TGWU coming into opposition to the government’s pay policy. At this time, a bitter strike at Roberts Arundel in Stockport over union recognition drew national attention. These events were symptomatic of a deep-seated discontent in the working class, still hoping against hope that the Labour government would deliver on its promises.
On 7 November 1967 a dramatic shake-up took place at the top of one of Britain’s biggest unions, the Amalgamated Engineering Workers’ Union. In the fight to succeed arch right-winger, Lord Carron, the left-wing candidate Hugh Scanlon was elected as President. This represented a major shift, and not only in the AEWU. The result reflected a new mood in the union membership after years of right-wing domination. It was time for a change in the unions. Within a year, a further left victory took place in the massive TGWU, when left-winger Jack Jones was elected the union’s general secretary. These changes in Britain’s most powerful unions were to have a profound effect throughout the Labour movement in the next few years.
Jack Jones had already been elected to the NEC of the Labour Party. In his memoirs, he gave a glimpse of the real state of affairs at the top of the movement: “On the NEC criticism of the government came mainly from Ian Mikardo, Tom Driberg and myself,” he recalled, “with occasional support from Danny McGarvey of the Boilermakers Union. Some of the Ministers shared our disquiet but they were muted in debate and never risked voting against the government.”[6]
In 1967 the Wilson government nationalised the steel industry, not out of any socialist perspective, but in an attempt to provide cheap steel to big business. Of course, as was customary the former owners were well compensated for the loss: “This change, which had for so long been a major issue of controversy between parties, took place without fuss, and appeared to make little difference”, noted Henry Pelling.[7] In these years, the capitalists had grown accustomed to being bailed out by the state in times of difficulty. However the British Steel Corporation was to face bitter competition from abroad that was to see its share of the market shrink. Given the lack of investment in new plant, this was to result in massive lay-offs. In particular, the failure of the steel unions, especially the ISTC, to make a stand saw the butchering of the industry a further haemorrhage of jobs throughout the 1970s and 1980s.
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Labour Party Annual Report, 1966, p. 163
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The Economist, 5 June 1965
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Not Wanted on Voyage: The Seamen’s Reply by John Prescott and Charlie Hodgins, June 1966, published by the National Union of Seamen Hull Dispute Committee
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Jack Dash, op. cit, p. 164, London 1970
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Jack Jones, op.cit, p. 175
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Pelling, A Short History of the Labour Party, p. 147, London 1972