[The struggles of the working class have made…]

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The struggles of the working class have made the continuation of the Social Contract an increasingly difficult task for the Labour government. In this, the first of two articles on the history of the Social Contract, IAN SWINDALE traces the way in which TUC bureaucrats and the Wilson government combined to impose wage controls almost as soon as Labour came into office in 1974.

Scargill - his collapse opened the way for wage controls. their living standards against the reserve powers to back the f6 limit. railmen for example smashing the Labour government ruthlessly nrioinal 30% ceiling onlv weeks forcing up unemployment and The latest phase in wage control and reduction of living standards has led to the political crisis which has been the occasion for this special edition of 'Socialist Press'.

However, it is well to use this issue to begin to set out the origins of these arrangements from the very time the Labour government was elected in the wake of the miners' defeat of the Tories at the beginning of 1974.

Ever since then the Labour government has moved consistently to push down wages and conditions.

HIGH POINT

From the high point of the miners settlement, the Labour government began to try and push back every wage settlement.

On the basis of a loose 'compact' with the unions the Labour government. won the election of October1974 with the aim of establishing a 30% ceiling wages! The fact that the railmen broke this limit in June 1975 forced the Labour leaders and their capitalist allies to begin to look more seriously at the need for wage controls.

The conditions under which such a policy could be seriously considered by the Wilson government were not long in presenting themselves.

UNHOLY

Engineered by an unholy alliance of Treasury officials, Labour Ministers and Union bureaucrats, Phase I of the Social Contract was introduced in the midst of the greatest inflationary crisis to confront British capitalism since the war.

Chancellor Healy, speaking Labour MPs in the Commons July 1, 1975, argued that:

"We must accept a 10% cut in the standard of living and public expenditure. The alternative is to crawl to the International Monetary Fund and accept the terms they impose on us"

But such a proposal, involving wage controls, massive public spending cuts and a doubling of unemployment, could only be imposed if the conditions were first created by the trade union bureaucracy, particularly Jack Jones of the TGWU and Hugh Scanlon of the AUEW.

The first move was made by Jones who floated the idea of a flat rate wage increase for all workers of f6 a week. At the TGWU Conference, Jones argued for this voluntary wage control on the basis that the government would otherwise impose legal pay restraint.

PEDDLING

Peddling the false argument that workers' wage increases were the cause of inflation, he said that trade unionists should make their contribution to the "national interest" by a voluntary curtailing of wage demands.

For its part of the 'bargain' the government must, argued Jones, maintain employment levels and public expenditure.

Stating that the only alternative to the Social Contract was legally imposed wage controls or, worse still, the return of the Tories, Jones won the vote at the TGWU conference and the first major step in establishing wage controls had been achieved.

But an alternative policy, representing the interests of the working class, was posed right at the outset by the Workers Socialist League.

At the TGWU conference, the only motions in opposition to the Social Contract and for an alternative policy on wages-a sliding scale of wages to protect workers' incomes against inflation-were moved by Alan Thornett from the 5/293 (Cowley Assembly Plant) Branch.

Arguing that the working class were not responsible for inflation, Thornett said that the trade unions should do the job they were built for through years of struggle and sacrifice by workers-defend the living standards of the working class.

Within a week of the TGWU conference, and in the light of an announcement by the then Prime Minister Wilson that statutory wage controls would shortly be introduced if voluntary wage controls were not accepted, the TUC General Council met and accepted the £6 flat rate.

COLLAPSED

The only remaining possible lead was that of Arthur Soargill whose Yorkshire Area NUM had tabled a motion for their conference demanding a £100 a week wage for face workers. Under pressure Scargill collapsed and replaced the word "demand" with the word "seek"

The way was now open, confusion having been sewn in the ranks of the working class by the trade union bureaucrats, for union leadership after union leadership to settle within the f6 limit.

Having successfully defended recent inflationary spiral, with . the took some months to work through to the point where its impact on working class living standards began to be felt. Consequently the first few months of Phase I were marked by a lack of action on the wages front.

Meanwhile, the government, which according to Jones and Scanlon were committed to their part of the Social Contract-maintaining employment and public spending-very quickly made clear that they had no intention of doing any such thing. And the union leaders themselves demonstrated that they had no intention of fighting government attacks on the working class-far from it.

Any attempt by workers to fight back against the government's policies met immediate resistance from the bureaucracy. Nine members of the Strathclyde District Committee of the Fire Brigade Union were expelled for trying to take on Wilson's pay laws while in the steel industry, union chiefs accepted thousands of redundancies.

As the Workers Socialist League argued at the time, the advocacy of redundancies by union leaders was the logical outcome of accepting the Social Contract as the means of defending capitalism in crisis. The fight against unemployment was therefore inseparable from the fight against. wage controls.

In an attempt to divert attention from the fact that the government was continuing its attacks on the working class, the trade union bureaucracy came out with an "alternative strategy" with "selective" import controls the central plank.

SUBSTITUTE

This reactionary nationalist policy could be no substitute for a fight against the Social Contract, instead attempting to tie the working class to their "own" bourgeoisie in competition with other capitalists internationally.

As the WSL argued at the time, import controls lead away from the all-out struggle against the employers necessary to defend jobs.

Meanwhile a ballot of NUM members resulted in acceptance of the £6 by a narrow 3-2 margin and the TUC were forced to defend the Social Contract against an ASTMS PHOTO: John Sturrock, Report Not content with defending a cutting wages, the union bureaucracy now took up the fight for higher productivity in the factories, centred on their attempt to force "participation' on the workforce of British Leyland, now largely government owned and being run primarily in the interests of the privately owned car component firms.

AVOIDED

was in November 1975 that the Labour government had to go to the IMF for the first of those loans that Healey had argued six months previously could be avoided if the working class accepted a cut in living standards of 10%.

The price of the loan-£1,000 million-was of course massive public spending cuts and further rationalisation of industry-speed up and unemployment.

SHATTERED

By now every single argument of the trade union bureaucracy was being shattered by the reality.

Wage controls had been imposed but inflation continued at record levels, the government was allowing unemployment to rocket to well over the million mark, the sacrifices made in order to avert loans based on public spending cuts had resulted in-loans based on further public spending cuts; and far from the danger of a Tory government being averted, the disillusionment of Labour voters threatened a mass abstention at a future election and the almost certain return of the Tories.

OBVIOUS

Under these conditions it was becoming increasingly obvious that' the working class would not accept wage controls for a secon year.

By the end of 1975, unemployment had risen to 1.2 million, an increase of 100% since the beginning of the Social Contract, and by February 1976 a further round of cuts were being proposed in a government White Paper.

As resistance began to grow, the trade union leadership were forced to take an increasingly bureaucratic stance in their attempts to police the working class.

Central to this was a systenatc attempt in union after union to concentrate power in the hands of 'reliable' full time paid officials of the union at the expense of the elected representatives of the working class on the shop toor, the

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