Finance and Industry: Labour Hangs Itself (1967)

The Finance and Industry Column from the March 1967 issue of the Socialist Standard

Labour Hangs Itself

There was a time when the Labour Party used to promise that, if elected, they would use the power of the state to help the trade unions get higher wages. They used this one right up until 1945 but the wage freeze of 1948 reduced its effectiveness and they have not dared use it since. Indeed, many of the Labour leaders spent their years of opposition working out plans to control wages. Returned to power in 1964 they straightway tried their incomes policy which was soon exposed for what it was when it became a legal wage freeze last July.

Unlike some of Labour's other plans the wage freeze has worked. Since July wage rates have stayed the same, while prices have risen 1.5 per cent. So the working class became worse off, as the official Ministry of Labour figures show:

Further, between April and October the average weekly earnings of men in manufacturing (a figure, the misuse of which the Socialist Standard has often exposed) fell for the first time since 1945.

Labour speakers tried to create the impression that there was a price freeze too, arguing that in gratitude for this the working class ought to put up with the wage freeze. But this was just a lie to cover up their aim of cutting our standard of living. Aubrey Jones, boss of the Prices and Incomes Board, was a little more frank when he gave evidence to the Royal Commission on Trade Unions on October 4. As reported by the Financial Times (the official report is not out yet), he admitted

  What was annoying trade unionists and others responsible for wage claims was the apparent disparity between the freeze in pay while prices increased, mainly on account of the selective employment tax. The object of the tax was to cut back the country’s living standards because they were rising too fast. It was, therefore, the Government’s policy to some extent that prices should rise relative to wages, Mr. Jones said.

How otherwise could they cut our standard of living?

Earlier (on August 22 last) the Financial Times exposed the price freeze as a myth. “There is no price freeze", it declared and went on:

  It is quite true that the White Paper speaks of ‘a general standstill on prices and charges until the end of 1966’. But the qualifications —quite rightly introduced — are so many that most businesses will be able to find a good reason for putting up their charges. The biggest gateway is the reference to Government action ‘such as increased taxation’. On the very day of the squeeze announcement, indirect taxes, except on tobacco, were put up by 10 per cent by the use of the Regulator. The impact of the Selective Employment Tax is still to be felt . . . ‘Government action’, moreover, has not been confined to taxes. Higher interest rates will provide a potent excuse in many cases. There are other gateways, too: ‘market increases’ in imported material prices, changes in supply, and increased costs of components which cannot be absorbed.

Finally, the very resolution supporting the freeze, which the Labour Party Conference passed, mentioned “tax increases and import price rises" as exceptions.

So there’s no doubt about it. There was no price freeze; nor was one intended. But even if there had been, that would be no argument for the workers giving up the conscious and organised struggle for higher wages and salaries.

The Labour Dole

The wage freeze cannot have been too much of a shock to Labour supporters, since their party had tried one before. But take a look at the third column in our table—the number of unemployed. Surely after years of anti-unemployment propaganda a Labour government would never welcome and encourage the growth of unemployment? Surely this could not have been cynically used to cadge votes?

Whether the Labour leaders are sincere or not, it does not make much difference to the way they are forced to act. But we must speak out against the cynical exploitation of working class misery by vote-gathering politicians. And, with specific reference to unemployment, it is hard to acquit Wilson on this charge.

On March 26 last, a few days before the election, Wilson told a Labour Party meeting in Manchester (quoted in The Bad Package, a pamphlet put out by five technicians’ unions):

  The only method the Tories knew of fighting the crisis they brought on the country was deflation to unemployment and short-time working. These financial technocrats who dominate the Tory Party had no thought, no compassion, for the families driven to live on the Tory dole. Nor did they think of the large number of families whose standard of living fell because of the drop in their earnings caused by deliberate policies which could only lead, and did lead, to short-time working.

Note the skilful combination ’Tory dole". Yet, four months later Wilson was talking in the House of Commons of “a tolerable figure of unemployment" of “between 1½ and 2 per cent", that is, a little over 400,000. When Wilson spoke there were only some 264,000 on the dole. Thus, in effect, he was coolly declaring that he was prepared to see another 150,000 thrown out of work. But this is not all. When by October the numbers began to approach the “tolerable" level Minister of Labour Gunther rushed in to explain that Wilson regarded two per cent as the tolerable figure after so-called redeployment. In other words this was not the limit. Pressed in the House of Commons on October 27 to give “a categorical assurance that the Labour government will not stand for a level of 500,000 unemployed under any circumstances", Wilson refused. At the last count there were some 600,000 unemployed.

Unemployment is inevitable under capitalism and governments, despite Keynes, have very little control over it. Perhaps Labour’s failure to tame capitalism will lead people to see the futility of Labourism. Already many trade unionists are discussing breaking with the Labour Party and, for the first time for many years, there are resolutions down for their conferences calling for just this.

Tory Sense

In a recent speech to a branch of the National Union of Bank Employees Enoch Powell told them, according to the Financial Times of 13 January, that “unions were harmful not only to the community but also to their members: there was a net loss resulting from their existence”. A year ago, in an address to some Young Conservatives, another Tory MP, Nicholas Ridley, declared:

  I think we have got to look at the situation if there were no trade unions after the war. And if there weren't I believe wages today would be higher. The net effect of trade unions is that probably they tend to keep wages down, although their members don't know it. (Marylebone Mercury, 3.12.65.)

That unions keep wages down is surely something they ought to tell the Labour government; it opens new possibilities for their incomes policy after the period of severe restraint!

Seriously, though, this is an old one. Trade unions, the argument goes, keep wages down by' restricting production; if there were no unions with their restrictive practices production would go quicker and we would all be better off. The answer is simple: workers must combine in order to get the best price for their ability to work. Without any unions, without any organised means of resisting the ever-present pressure of employers to reduce their “labour costs”, workers would be at the mercy of their employers and soon reduced to a sorry state. Besides production does not go up in a steady line under capitalism, restrictions or no. It goes up and down and with it go employment and wage levels. At times, unions can push up wages at the expense of profits. This has tended to happen since the war. Which is what the Tories are really worried about.

Adam Buick