Breakdown of industrial relations, 1960s and 70s [essay]

To what extent was the breakdown of industrial relations in the 1960s and 70s the consequence of government policies?

The breakdown of industrial relations in the 60s and 70s led to a ‘battle’ between the government and trade unions. Consensus politics could be to blame – nationalisation led to strike action and, ultimately, to the Winter of Discontent. However, I don’t think that government policies were the most important; I think that trade union militancy was the biggest factor as it encouraged further opposition of the government, as well as the unfortunate Oil Crisis in 1974, which was out of the government’s control.

During the 60s and 70s, there was still a time of consensus in politics. Butskellism was the term coined to describe the almost identical policies of the Chancellor of the Exchequers (R.Butler: Conservative; and H.Gaitskell: Labour) in the 50s and 60s. One of these policies was devaluation in 1967 by Harold Wilson (from $2.8 to $2.4), which led to the breakdown of industrial relations due to the increased demand in wage increases (which Edward Heath tried to solve by offering a 13% pay rise, but this was rejected by the miners – this symbolises the problems in cooperation between the government and trade unions).

Butskellism was closely linked to Keynesian economics: increasing spending in a time of a recession to try and stimulate the economy. This links to the breakdown of industrial relations as this spending (for example, on the Welfare State) demoted the importance of workers’ wants and needs in order to prioritise improving the economy. This led to the breakdown as funding was injected into the newer industries – like electricity, cars and technology – rather than in traditional industries – like coal mining – meaning that the number of mining pits almost halved from 1960 to 1979. This instantly provoked a reaction from miners who accused the government of making thousands of miners redundant, thus damaging relations.

Some economic policies which were introduced in the 50s were still prominent in the 60s and 70s; ‘stop-go’ policies indirectly affected industry, in particular the ‘stop’policies: short-term measures to deal with inflation. During the 70s, inflation peaked at just over 20% and the government’s ‘stop’ policies failed to improve the stagnation experienced by the economy – this is because these policies focussed more on crisis management, rather than long term solutions, and tended to increase unemployment (because it meant cutting funding, therefore cutting jobs). Arguably, the government counter-acted this by (finally…) being accepted into the European Economic Community in 1973as it led to additional funding in new sectors, so more jobs were created. This is important when talking about industrial relations because I believe that there is a positive correlation between employment rates and industrial relations.

In relation to comparable nations, Britain’s productivity fell from 9th in the world rankings (1961) to 18th (1978), and the economy was in slow growth at only 2.3% a year. This led to governments putting caps on wages, in particular in 1972 when Heath announced the Social contract: voluntary wage restraint which led to strike action by workers in nationalised industries. Although we must consider the rise in real income during this period, which subsequently led to more disposable income and a boom in consumer spending, not all groups of people experienced the benefits – again, blue collar workers faced stiff competition from competitors due to the policy of protectionism, which was still in effect until joining the ECC. This broke down industrial relations as it decreased exports, making more and more businesses bankrupt or put into administration, and again led to the workers pointing the finger to the government. But, government policies cannot be entirely to blame for this; I believe that the stock market crash of 1973, as a result of the collapse of the Bretton Woods System (economic system to help the global economy after WW2), was to blame as it crushed the willingness of countries to participate in international trade in order to preserve their own domestic industries.

The stock market crash evoked Prime Minister Edward Heath to announce a state of emergency on 1st January 1974, after a miner’s strike was announced in December 1973. The most notable measure was the Three Day Week: this limited commercial users of electricity to three consecutive days of consumption. Electricity blackouts were widespread. This damaged relations as strike action clearly shows that workers are not happy with the government, and this form of austerity began to affect not only workers, but the nation as a whole. The 1974 Oil Crisis only added to these heightening tensions: OPEC increased the cost of oil by over 400%, sky-rocketing inflation and plummeting employment. The effects of these government measures led to the epitome of industrial relations in 1978: the Winter of Discontent. Garbage men went on strike, leaving rubbish piling on the streets (and creating conditions perfect for rats!); lorry drivers went on strike, halting the transportation of goods. All of these strikes were either sympathy strikes or inspired by the past successes of the miners’ strikes – this damaged industrial relations as all industries began to unify against the government, therefore becoming more powerful. Moreover, for these industries to collaborate with each other is significant as they were previously competitors; this emphasises the conflict faced between the government and industry.

In conclusion, I believe that government policies did play a part in damaging industrial relations; the devaluation of the pound (1967) and Butskellism made the industries feel as though the government didn’t take their issues seriously enough as the control measures focused more on crisis management, rather than long term solutions. Keynesian economics did inject industry with funding, but this was mostly into newer sectors and not the traditional sectors who really needed financial aid. I think that global issues are more to blame than the government: the government’s policies did not cause the stock market crash in 1973, or the Oil Crisis in 1974, therefore cannot be held fully responsible for the relative decline faced afterwards.  However, I consider trade union militancy to be the most important factor in damaging industrial relations: in particular, the miners’ demands became unreasonable in a time of recession – the wage increases they wanted were simply too hard to meet, considering the state of the global economy. Furthermore, the success of such militancy led to sympathy strikes and gave over industries confidence to oppose the government; this damaged relations and it made the trade unions more powerful and able to resist government requests – and let’s face it: the government doesn’t like other bodies being more powerful than them, so it was inevitable that a battle would’ve emerged.

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