SocialismToday           Socialist Party magazine

Issue 221 September 2018

Militant trade unionism: lessons from the 1960s

This year marks the 50th anniversary of the Donovan Commission Report. Produced at a time of working-class struggle against wage restraint, JIM HORTON examines its relevance today.

At the beginning of the summer of 1968, a Royal Commission chaired by Lord Donovan published its report into industrial relations in Britain. A couple of months ago, the PCS union was thwarted from taking industrial action despite 50,726 of its members voting to strike, 86% of those who voted. So what links a 50-year-old report, the contents of which have been largely forgotten save by a handful of trade union historians and academics, with a recent industrial action ballot vital to the living standards of thousands of civil servants?

The Donovan Commission was set up by Harold Wilson’s Labour government in 1965 to consider ways of tackling unofficial strikes. In attempting to manage the economy on behalf of the capitalists, Wilson became committed to removing any barrier to his key policy of imposing wage restraint. For the employers, that barrier was trade union militancy led by workplace shop stewards.

Although not within its remit, the Donovan Report was concerned with controlling so-called ‘wage drift’. In reality, as also in the past eight years, wage rises during the late 1960s actually fell below the rate of inflation, in effect, wage cuts for millions of workers. One of the central questions addressed by the Donovan Commission was whether the law should be deployed to order industrial relations and thereby limit the power of organised labour to resist the holding down of wages.

Fifty years on, it was the operation of the law – the onerous balloting requirements of the Trade Union Act 2016 – which assisted the Tory government with its wage restraint policy by undemocratically preventing PCS members from taking industrial action in pursuance of their pay claim.

Back in June 1968, the Royal Commission actually recommended against the use of the law to regulate trade union industrial action. Instead, it favoured a restructuring of the voluntary collective bargaining systems. Just months later, however, it would be Wilson’s government that made the first attempt to introduce statutory restrictions on industrial action in the post-second world war period. This would eventually lead in the 1980s to Margaret Thatcher’s Tory anti-union laws, which Tony Blair’s New Labour government boastfully retained and Theresa May’s current Tory administration has extended with its 2016 Trade Union Act.

Preparing to attack

It was right-wing members of the Inns of Court Conservative and Unionist Society who first argued, in a study published in 1958, that the law gave trade unions too much freedom of collective action. Harking back to a time when workers were expected to be subservient, their study referred to ‘master and man’, terminology borrowed from the beginning of the industrial revolution, an age before unions had gained full legal recognition. The power of trade unions was seen as a challenge to the whole political and constitutional ordering of society. That is, the right of employers to rule unhindered by the democracy trade unions bring to the workplace.

Their proposition was contrary to the prevailing view in the first decades after the war that trade unions had a positive role to play in the economy and wider society. At this time of political consensus between the main parties, the political establishment sought to incorporate the labour movement into the state. This was part of the democratic counter-revolution against the militant expectations of the working class at the end of the second world war.

Justifiably fearing a repeat of the revolutionary upheavals that swept across Europe in the aftermath of the first world war, and with capitalism being snuffed out in eastern Europe – replaced by Stalinist command economies rather than democratic socialist planning – huge concessions were made to the working class. These included the nationalisation of key industries and the foundation of the ‘welfare state’, including the National Health Service. Yet wartime austerity continued into the 1950s, and trade union membership grew alongside an extension of collective bargaining coverage.

Even during the economic upswing later in the decade, when it was claimed that workers had ‘never had it so good’, union membership rose as workers took industrial action to secure wage rises. At the time, employers were looking to increase profits at the expense of workers’ pay and workplace conditions. Significantly, the number of shop stewards started to rise as union power shifted to the shop floor, a process that even then provoked the ire of the political establishment.

Already by the early 1960s, in the absence of anti-union legislation, the law courts began to reinterpret the ‘abstentionist’ legal framework which had been in place since the 1906 Trades Disputes Act. That act had given trade unions immunity from civil legal action by employers, so long as unions were taking industrial action in pursuance of, or further to, a trades dispute. However, the judicial (as opposed to legislative) House of Lords – since 2009, called the Supreme Court – ruled in a 1963 case that a threat to strike amounted to intimidation and was outside the protective scope of the 1906 act. This ruling had the potential to make all union preparation for industrial action effectively unlawful. It threatened to take the legal position of trade unions back to the end of the 19th century.

Wilson’s Labour government

When, after thirteen years, Labour returned to power in 1964, it acceded to union demands to enact legislation reversing the anti-union judicial decisions. The quid pro quo, though, was the setting up of a Royal Commission to look at industrial relations following years of hostile government and media propaganda against shop stewards and unofficial strike action.

The context of these developments was the parlous state of the British economy relative to its international rivals. Since the early 1960s, successive governments had attempted to hold down wages at a time when, after years of underinvestment, the feeble economy was struggling to keep pace with the more productive economies of Germany, the United States, Japan and France.

British capitalism sought to compete by means of cheap labour, long working hours and an intensification of the work process. Like today, the problems in the British economy were to be offloaded onto the working class if the capitalists could get away with it. This required clipping the power of the unions which had grown more powerful in the two decades since the end of the war, partly because of virtual full employment which had strengthened their bargaining position.

The 1964 Labour government inherited a huge £800 million balance of payments deficit. With a slim parliamentary majority of just four, Wilson’s administration came under sustained pressure from the international money markets to devalue the pound. For a period, Wilson resisted the pressure but, rather than break with capitalism, he opted for wage restraint – in effect, continuing the policy of the previous Tory administration.

Eventually succumbing to pressure in 1967, Wilson devalued the pound. Even so, international finance capitalism stepped up its demands for a sustained period of wage restraint. With today’s economic malaise even more deep-seated than the 1960s, it is clear that a future Labour government led by Jeremy Corbyn would face relentless attempts by British and global capital to sabotage the implementation of radical reforms beneficial to the working class.

The Trades Union Congress (TUC) dutifully agreed a Joint Statement of Intent on Productivity, Prices and Incomes with the government and employers’ associations, on the basis of Wilson’s promise that the curb on wage increases would be voluntary. Yet an essential aspect of the statement was to reduce the number, extent and intensity of strikes, particularly unofficial strikes – those not endorsed by the national union leaderships, referred to in the media as wildcat strikes. The Ministry of Labour had estimated that 95% of all strikes were unofficial, led by shop stewards or local branch officials.

The British economy continued to deteriorate during the spring and early summer of 1966. Labour was re-elected in April that year, winning a 97-seat parliamentary majority. Just four months later, the government moved towards a statutory incomes policy with the Prices and Incomes Act. This allowed it to enforce a total freeze on wages and prices for six months, with penal sanctions for any transgression.

New wave of militancy

The TUC General Council gave limited support to the government’s measures, despite strong opposition to statutory wage controls by many affiliated unions, led by the Transport and General Workers Union (TGWU – which merged with Amicus in 2007 to form Unite). While the right-wing trade union leaders stood back with folded arms, the shop stewards led the resistance against the government’s onslaught on workers’ living standards. The government came into direct collision with the ranks of organised labour, whose high hopes of better times under Labour had been dashed so emphatically.

The seamen’s strike epitomised the new wave of militancy among lower-paid workers. The government soon revealed on which side of the class conflict it stood, and the measures it would be prepared to take in defence of capital. Wilson correctly identified the significance of the strike: "What is at issue here is our national prices and incomes policy". He described the seamen’s action as "a strike against the state" – in reality, a strike against the interests of capital.

The government declared a state of emergency, and a court of inquiry was set up. The seamen refused to accept its report as the basis of negotiations. Wilson hinted at a "communist conspiracy", declaring that the seamen’s union Executive Committee – including John Prescott, who went on to become deputy prime minister in Tony Blair’s 1997 government – was under the control of a "tightly-knit group of politically motivated men". But it was the militant ranks of the National Union of Seamen, now a component part of the Rail Maritime and Transport union, who determinedly pursued the strike. The action was 100% solid and pushed the right-wing dominated executive to demand the nationalisation of the shipping industry.

There was widespread support for the seamen, including solidarity action by dockers who refused to handle ships boycotted by local strike committees. Notwithstanding the government using all the propaganda weapons at its disposal, the strike ended with a pay increase above the norm and a 42-hour week. The anger of workers towards the government’s wage freeze was felt at the TUC congress in autumn 1966, where the General Council’s recommendation to support the government policy was carried by a wafer-thin majority of 240,000 votes in a card vote of 4.56 million for and 4.32 million against.

Labour’s six-month pay freeze was followed by wage restraint, which only served to spread militancy among other manual labourers and white-collar workers. Accepting the capitalist mantra that wages were responsible for Britain’s economic problems, the TUC had agreed voluntarily to vet the outcomes of pay negotiations, in opposition to left unions like the TGWU. Workers, however, had had enough of wage cuts. In 1967, teachers began preparing for industrial action. In September that year more than 200,000 dockers struck for a higher minimum wage and better conditions. Airline pilots began a series of 48-hour strikes, while manning disputes sparked off the ASLEF train drivers’ work-to-rule.

Unions shift left

Nonetheless, Labour’s incomes policy had succeeded in stemming overall wage rises. In 1968, wages rose by just 2.4%, compared to a 3.4% average from 1957-1966. Meanwhile, productivity per worker increased rapidly, by 4% in 1968, compared to the 2.2% average during the 1957-1966 period. This was achieved by intensifying working conditions, not by capital investment.

While Britain’s economy continued to decline, the capitalists amassed huge profits through the super-exploitation of the working class. One giant monopoly, ICI, increased profits by 50% on the previous year, while the working class faced an accelerated rise in the cost of living. The Amalgamated Engineering Union (AEU) revealed that there had been a substantial increase in overtime as workers extended their working hours to make ends meet.

It was to redress the balance that workers engaged in industrial struggles in 1968, particularly in the key docks, engineering and motor vehicle industries. Women workers, who made up nearly 40% of the workforce but earned only half the average male wage, took action on pay inequality. The magnificent strike at Ford Dagenham resulted in the 1970 Equal Pay Act. Widespread industrial action carried over to 1969. By the end of the decade, the government’s pay policy was dead in the water.

The militancy at shop-floor level was reflected in a leftward shift in trade union elections at national and district level. The TGWU had previously been alone among the big unions in its opposition to the government’s pay policy, first under Frank Cousins, then Jack Jones. In 1967 this changed when the AEU also shifted to the left with the election of Hugh Scanlon as its president. As did the National Union of Mineworkers the following year under Laurence Daly.

At the 1968 congress, the right-wing leaders of the General Council sought to downplay the TUC’s role in seeking pay restraint among its affiliated union members. Congress voted by a massive 7.746 million votes to 1.022 million for a composite motion moved by the TGWU and AEU rejecting all legislation that restricted wage bargaining. A motion reaffirming congress’s support for the TUC’s own voluntary incomes policy was carried, but only by a tiny majority.

Shop-floor workers’ movement

It was during the industrial maelstrom of 1968 that the Donovan Commission published its report. Unsurprisingly, it agreed with ‘official’ opinion that unofficial strikes were a cause for concern. Nonetheless, it argued that they were only a symptom of the underlying ills afflicting British industrial relations. According to Donovan, these included poor productivity, restrictive labour practices, and wage drift regarded as inflationary. These were familiar themes.

Donovan failed to attribute poor productivity to insufficient investment by the British capitalists. Donovan was also wrong to blame wage rises for inflation. It was wage rises cutting into their profits that irked the capitalists. In addition, when Harold Wilson devalued the pound he explicitly warned the unions not to pursue wage claims to compensate for the inevitable attendant rise in prices.

Donovan’s reference to restrictive labour practices was also a common refrain, reflecting employers’ opposition to workers increasingly encroaching on the ‘divine rights’ of management. On the shop floor of major manufacturing companies in particular, shop stewards committees challenged the arbitrary rule of managers, determined overtime ratios and, significantly, in some cases, the use and deployment of the labour force in the factory. These so-called ‘restrictive practices’ helped to protect workers from the excesses of super-exploitation.

During a period of high trade union membership and low unemployment, employers were compelled to tolerate these elements of dual power the shop stewards committees represented in the factories. The ruling class, however, was determined to break the workers’ resistance to wage restraint and more intensive work practices. This required dealing with the power of the unions or, more accurately, given the compliance of the right-wing trade union leaders, the power of shop stewards and rank-and-file members on the shop floor.

The Donovan Commission followed this lead, citing the increased power of unions at a workshop level at a time of low unemployment as an underlying problem. According to the commission, there were 175,000 shop stewards, nearly double that of seven years earlier, and compared to just 3,000 full-time trade union officers.

Donovan identified two collective bargaining systems. There was the ‘formal’ system of the old, industry-wide, multi-employer negotiating institutions, where collective bargaining was conducted by the tops of the unions with senior managers at a national level. Donovan argued that this was ill-equipped to handle the pressures arising from the ‘informal’ system. That is, the reality of shop-floor collective bargaining conducted by shop stewards and individual managers, which was scuppering the ‘acceptable’ deals reached by senior managers and union leaders.

The commission opined that the trade union tops had little or no say over the actions of the shop stewards. Therefore, they had lost control of the collective bargaining process. According to Donovan, the two systems were in conflict. Power had moved to the shop-floor combine committees that cut across traditional trade union membership lines. The bringing together of stewards from different unions to bargain in cooperation with each other was a concern for both the employers and national trade union leaders.

Balance of class forces

Employers had only reluctantly begun bargaining with trade unions at the end of the 19th century because this took place outside the factories and workplaces, with union leaders more open to compromise than the militant shop-floor workers. It was after the first world war that national bargaining structures were established, partly in response to the flowering of the militant shop stewards movement during the war. By supporting the war, the union leaders had, in effect, abdicated responsibility for defending workers’ conditions (see: War On the Home Front, Socialism Today No.180, July/August 2014).

These post-war ‘Whitley’ committees were also a response to the mass industrial militancy that broke out at the end of hostilities, surpassing that of the great industrial unrest of the pre-war period. By the 1930s, following the avoidable defeats in a succession of industrial and political struggles, most notably the 1926 general strike, much of the collective bargaining structures were abandoned by the employers. They were only resurrected during and after the second world war.

Endorsing the government’s position that incomes policies were necessary, the Donovan Commission was concerned to see a return to ‘effective and orderly collective bargaining’. It proposed both decentralisation and centralisation. Decentralisation away from industry-wide negotiations and towards single-employer deals. Centralisation from the shop floor to company, plant or factory level negotiations through joint negotiating committees.

It argued that, by shifting bargaining power away from shop stewards to senior managers and full-time trade union officers, increased productivity and effective incomes policy would be easier to sustain. Proposals for more direct industrial democracy were dismissed almost contemptuously in the report.

For socialists, whether local, national, single or multi-employer collective bargaining is in the best interests of workers depends on the balance of class forces at all levels. Of particular relevance is the quality of and democratic control over national trade union leaders and full-time officers, and the relative power of unions locally, particularly the shop stewards and branch officials.

While limiting the bargaining role of the shop stewards, the commission was keen to see the incorporation of shop stewards into the formal structures and discipline of the unions, with their rights and obligations clearly defined by agreement between unions and employers. These measures were partly designed to assist the unions to control their stewards. They included the introduction of union facility time, which has recently been reduced in the public sector and remains under general threat with the Trade Union Act 2016.

While the commission viewed the use of the law as irrelevant to the structural problems underlying unofficial strikes, and unnecessary if its recommendations were adopted, it did not completely rule out legislative intervention if unofficial strikes continued to occur under its new collective bargaining structures. Many of Donovan’s proposals were accepted by trade union leaders and some employers. However, under growing pressure from union activists, the TUC rejected those proposals most related to incomes policy.

The choice for Labour and the unions

The Donovan Report was highly influenced by academics from the pluralist school of industrial relations whose views reflected the period of political consensus in the first couple of decades after the war. However, by the late 1960s this consensus was starting to break down. British capitalism was demanding more urgent and decisive action than merely reconstructing the industrial relations system.

Just six months after the publication of the report opposing legal intervention into industrial relations, Harold Wilson pressed ahead with the white paper, In Place of Strife. This contained penal sanctions against unofficial strikes.

The opposition of rank-and-file trade unionists compelled the TUC to oppose the government. Mass industrial action forced Wilson’s government to retreat. Over 250,000 workers had struck on May Day, the first directly political strike on any scale since the 1926 general strike. Mass demonstrations of strikers took place in London, Merseyside, Manchester, Glasgow, Hull, Sheffield, Birmingham, Coventry, Wolverhampton and elsewhere.

In Place of Strife and the apparently more benign recommendations of the Royal Commission both aimed to curtail the ability of workers to take action in defence of their living standards. But Wilson’s Labour government had a third option: to break with capitalism to implement meaningful reforms for working people. By trying to better manage capitalism he inevitably ended up doing the bidding of the employers against the interests of the working class. Jeremy Corbyn will face the same choice, but in a period when the scope for reforms under capitalism is much diminished.

The trade union leaders also had a choice. The right-wing tops of the TUC and most unions opted to at best acquiesce to the demands of capital. It was the trade union rank and file, particularly the shop stewards movement, that led the resistance to both wage restraint and the attempt to introduce anti-trade union legislation – in the process, pushing the unions to the left.

Back in 1963, TGWU general secretary, Frank Cousins, had warned correctly: "If we do not fulfil the purposes for which our members join unions, to protect and raise their real standard of living, then the unions will wither and finally die". To retain the current membership and reach out to the millions of unorganised workers, trade unions today need to take decisive action on pay, working conditions and against austerity.

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