Editing Winter of Discontent (section)

==Background==

The Winter of Discontent was driven by a combination of different social, economic and political factors which had been developing for over a decade.

===Divisions in Labour Party over macroeconomic strategy===

Under the influence of [[Anthony Crosland]], a member of the more moderate [[Gaitskellite]] wing of the Labour Party in the 1950s, the party establishment came to embrace a more moderate course of action than it had in its earlier years before the [[Second World War]]. Crosland had argued in his book ''[[The Future of Socialism]]'' that the government exerted enough control over private industry that it was not necessary to [[nationalise]] it as [[Clause IV|the party had long called to do]], and that the ultimate goals of [[socialism]] could be as readily achieved by assuring long-term economic stability and building out the social [[welfare state]]. His "[[The Future of Socialism#Labour revisionism|revisionist]]" views became Labour's perspective on the [[post-war consensus]], in which both they and the [[Conservative Party (United Kingdom)|Conservative Party]] agreed in principle on a strong government role in the economy, strong unions and a welfare state as foundational to Britain's prosperity.<ref name="López 40–45">{{cite book |last=López |first=Tara Martin |title=The Winter of Discontent: Myth, Memory and History |date=2014 |publisher=[[Oxford University Press]] |isbn=978-1-78138-601-9 |pages=40–45}}</ref>

In the 1970s, following the surge in radical left-wing politics of the late 1960s, that view was challenged in another Labour figure's book, [[Stuart Holland]]'s ''The Socialist Challenge''. He argued that contrary to Crosland's assertions, the government could exercise little control over Britain's largest companies, which were likely to continue consolidating into an [[oligopoly]] that, by the 1980s, could raise prices high enough that governments following [[Keynesian economics]] would be unable to ensure their citizens the opportunity for [[full employment]] that they had been able to since the war, and exploit [[transfer pricing]] to avoid paying British taxes. Holland called for returning to nationalisation, arguing that taking control of the top 25 companies that way would result in a market with more competition and less inflation.<ref name="López 40–45" />

Holland's ideas formed the basis of the [[Alternative Economic Strategy]] (AES) promoted by [[Tony Benn]], then [[Secretary of State for Industry]] in the Labour governments of [[Harold Wilson]] and [[James Callaghan]] as they considered responses to the [[1976 sterling crisis]]. The AES called on Britain to adopt a [[protectionist]] stance in international trade, including reversing [[1975 United Kingdom European Communities membership referendum|its recent decision]] to join the European Common Market, and impose no incomes policies to combat inflation. Benn believed that this approach was more in keeping with Labour's traditional policies and would have its strongest supporters in the unions, with them vigorously supporting the government against opposition from the financial sector and "commanding heights" of industry. It was ultimately rejected in favour of the [[Social Contract (Britain)|social contract]] and extensive cuts in public spending as the condition of an [[International Monetary Fund]] loan that supported the pound after the sterling crisis.<ref name="López 40–45" />

The left wing of the Labour Party, while critical of the revisionist approach and the Social Contract, was not universally supportive of the AES either. Many thought it did not go far enough, or avoided the issue of nationalisation. [[Feminism in the United Kingdom|Feminists]] in particular criticised it for its focus on traditionally male-dominated manufacturing jobs and ignoring the broader issues that the increasing number of women in the workforce faced, preferring a focus on broader social issues rather than just working conditions and pay, the traditional areas unions had negotiated with employers.<ref name="López 40–45" />

===1960s–70s labour law reforms===

In 1968 Wilson's government appointed the [[Donovan Commission]] to review [[British labour law]] with an eye toward reducing the days lost to strikes every year; many Britons had come to believe the unions were too powerful despite the country's economic growth since the war. It found much of the problem to lie in a parallel system of 'official' signed agreements between unions and employers, and [[Side letter|'unofficial', often unwritten ones]] at the local level, between [[shop steward]]s and managers, which often took precedence in practice over the official ones. The government responded with ''[[In Place of Strife]]'', a [[white paper]] by [[Secretary of State for Employment]] [[Barbara Castle]], which recommended restrictions on unions' ability to strike, such as requiring strikes take place after a member vote and fining unions for unofficial strikes.<ref name="López 36">{{harvp|López|2014|page=36}}</ref>

The [[Trades Union Congress]] (TUC) vigorously opposed making Castle's recommendations law, and Callaghan, then [[Home Secretary]], led a cabinet revolt which led to its abandonment. Callaghan did not believe it would be effective in curtailing unofficial strikes, that the proposals could not pass, and the effort would create unnecessary tension between the government and the unions that were key to its political strength.<ref name="Lopez 37">{{cite book|last=Callaghan|first=James|author-link=James Callaghan|title=Time and Chance|page=274|date=1987|publisher=Collins|isbn=9780002165150}}, cited at {{harvp|López|2014|page=37}}</ref>

After the Conservatives won [[1970 United Kingdom general election|the following year's election]], they implemented their own legislation to address the issue. The [[Industrial Relations Act 1971]], modeled in part on the U.S. [[Taft-Hartley Act]], passed over determined union opposition, included many of the same provisions as ''In Place of Strife'', and explicitly stated that formal [[collective bargaining agreement]]s would have the force of law unless they had [[disclaimer]]s to the contrary. It also created a [[National Industrial Relations Court]] to handle disputes and put unions under a central registry to enforce their rules.<ref name="López 38">{{harvp|López|2014|page=38}}</ref>

New Prime Minister [[Edward Heath]] hoped that the new law would not only address the strike issue but the steep [[inflation]] plaguing the British economy (along with other industrial capitalist economies) at the time, eliminating the need for a separate [[incomes policy]] by having a moderating effect on pay increases demanded by unions. Ongoing union resistance to the Industrial Relations Act led to a [[House of Lords]] ruling in their favor over demonstrations and widespread unofficial strikes following the [[Pentonville Five]]'s imprisonment for continuing to picket a London container depot in violation of a court order, which undermined the legislation. Coal miners [[1972 United Kingdom miners' strike|officially went on strike]] for the first time in almost half a century in 1972; after two months the strike was settled with the miners getting a 21 per cent increase, less than half of what they had originally sought.<ref name="López 39">{{harvp|López|2014|page=39}}</ref>

Heath turned to an incomes policy; inflation continued to worsen. The incomes policy was abandoned in 1973 when [[1973 oil crisis|that year's oil embargo]] nearly doubled prices within months. To meet demand for heat in the wintertime, the government had to return to coal, giving the [[National Union of Mineworkers (Great Britain)|National Union of Mineworkers]] more leverage. The government declared a [[state of emergency]] that November, and at the beginning of 1974 limited all nonessential businesses to [[Three-Day Week|three days of electricity each week]] to conserve power. Miners, who had seen their rise from two years before turn into a pay cut in real terms due to the inflation the government had not brought under control, voted overwhelmingly to go on strike in late January.<ref name="López 39" />

Two weeks later, the government responded by calling [[February 1974 United Kingdom general election|an election]], running on the slogan "Who Governs Britain?". At the end of the month the Conservatives no longer did; Labour and Wilson returned, but [[hung parliament|without a majority]]. They were able to pass the [[Health and Safety at Work etc. Act 1974]], which repealed the Heath government's Industrial Relations Act.<ref name="López 39" />

In [[October 1974 United Kingdom general election|October]] Wilson won a majority of three seats; still they needed a coalition with the [[Liberal Party (United Kingdom)|Liberal Party]] to have a majority on many issues. Callaghan, now [[Foreign Secretary (United Kingdom)|Foreign Secretary]], attended an informal meeting at Chequers alongside his fellow Cabinet members, where he speculated about the possibility of "...[a] breakdown of democracy", joking with them that "[i]f I were a young man, I would emigrate."<ref name="beckett2010">{{cite book |url={{GBurl|-NURERF4hb8C|page=175}} |title=When the Lights Went Out: Britain in the Seventies | publisher=Faber & Faber |last=Beckett |first=Andy |year=2010 |page=175 |isbn=978-0-571-22137-0}}</ref>

===Incomes policy===

Wilson, and Callaghan, who succeeded him as prime minister after Wilson resigned for health reasons in 1976, continued to fight inflation, which peaked at 26.9 per cent in the 12 months to August 1975. While demonstrating to markets [[fiscal responsibility]] the government wished to avoid large increases in unemployment.<ref>{{cite journal |first=Colin |last=Hay |title=Chronicles of a Death Foretold: the Winter of Discontent and Construction of the Crisis of British Keynesianism |journal=Parliamentary Affairs |year=2010 |volume=63 |pages=446–470 |doi=10.1093/pa/gsp056 |issue=3}}</ref> As part of the campaign to bring down inflation, the government had agreed a "[[Social Contract (Britain)|Social Contract]]" with the TUC which allowed for a voluntary [[incomes policy]] in which the pay rises for workers were held down to limits set by the government. Previous governments had brought in incomes policies backed by [[Act of Parliament (UK)|Acts of Parliament]], but the Social Contract agreed that this would not happen.<ref name=bbc/>

====Phases I and II====
Phase I of the pay policy was announced on 11 July 1975 with a [[white paper]] entitled ''The Attack on Inflation''. This proposed a limit on wage rises of £6 per week for all earning below £8,500 annually. The [[TUC General Council]] accepted these proposals by 19 votes to 13. On 5 May 1976 the TUC accepted a new policy for 1976 increases, beginning 1 August, of between £2.50 and £4 per week with further years outlined. At the Annual Congress on 8 September 1976 the TUC rejected a motion which called for a return to free [[collective bargaining]] (which meant no incomes policy at all) once Phase I expired on 1 August 1977. This new policy was Phase II of the incomes policy.<ref name=hay/>

====Phase III====
On 15 July 1977, the [[Chancellor of the Exchequer]] [[Denis Healey]] announced Phase III of the incomes policy in which there was to be a phased return to free collective bargaining, without "a free-for-all". After prolonged negotiations, the TUC agreed to continue with the modest increases recommended for 1977–78 under Phase II limits and not to try to reopen pay agreements made under the previous policy, while the government agreed not to intervene in pay negotiations. The [[Conservative Party (UK)|Conservative Party]] criticised the power of the unions and lack of any stronger policy to cover the period from the summer of 1978. [[Disinflation|The inflation rate continued to fall]] through 1977 and by 1978 the annual rate was below 10 per cent.<ref name=hay/>

At the end of the year [[Bernard Donoughue]], Callaghan's chief policy advisor, sent him a memo analysing possible election dates. He concluded that the following October or November would be the best option, as the economy was likely to remain in good shape through then. After that, he wrote, the outlook was unclear, with pressure from the government's own incomes policy likely.<ref name="The Heat of the Kitchen">{{cite book |last=Donoughue |first=Bernard |author-link=Bernard Donoughue, Baron Donoughue |title=The Heat of the Kitchen: An Autobiography |url={{GBurl|yE4KAQAAMAAJ|page=298}} |page=298 |date=2003 |isbn=978-1-84275-051-3 |publisher=Politico's}}, cited at {{harvp|López|2014|page=[{{GBurl|LVy1DAAAQBAJ|page=61}} 56–57]}}</ref>

====Five per cent limit====
At a May 1978 Downing Street lunch with editors and reporters from the ''[[Daily Mirror]]'', Callaghan asked if they believed it was possible that the planned Phase IV would succeed, as he believed it would if the unions and their members understood it was the best way to keep Labour in power. Most told him that it would be difficult, but not impossible. [[Geoffrey Goodman]] disagreed, saying in his view it would be impossible for the union leaders to keep their membership from demanding higher pay increases. "If that is the case, then I will go over the heads of the trade union leadership and appeal directly to their members—and the voters", the prime minister responded. "We have to hold the line on pay or else the government will fall."<ref name="Goodman 220–21">{{cite book |last1=Goodman |first1=Geoffrey |author-link1=Geoffrey Goodman |title=From Bevan to Blair: Fifty Years Reporting from the Political Frontline |date=2003 |publisher=Pluto Press |isbn=978-0-7453-2178-3 |pages=220–21 |url={{GBurl|VqlZAAAAMAAJ}}}}, cited at {{harvp|López|2014|pages=[{{GBurl|LVy1DAAAQBAJ|page=60}} 60–61]}}</ref>

On 21 July 1978 [[Chancellor of the Exchequer]] [[Denis Healey]] introduced a new white paper which set a guideline for pay rises of 5 per cent in the year from 1 August. Callaghan was determined to keep inflation down to single figures; however, trade union leaders warned the government that the 5 per cent limit was unachievable, and urged a more flexible approach with a range of settlements between 5 and 8 per cent. [[Terry Duffy]], president of the AUEW, described the limit as 'political suicide'. Healey also privately expressed scepticism about the achievability of the limit. The TUC voted overwhelmingly on 26 July to reject the limit and insist on a return to [[collective bargaining|free collective bargaining]] as they were promised.<ref name="Conroy">{{cite book |last1=Conroy |first1=Harry |title=Callaghan |date=2006 |publisher=Haus Publishing |isbn=978-1-904950-70-7 |url={{GBurl|txFwUINNlpAC|page=109}} |pages=109–124}}</ref><ref name=hay/>

It had been widely expected that Callaghan would call a general election in the autumn, and that the 5 per cent limit would be revised if Labour won. At a private dinner before that year's TUC conference, Callaghan discussed election strategy with the leaders of major unions. He asked whether he should call an autumn election; with the exception of [[Hugh Scanlon]], the president of the [[Confederation of Shipbuilding and Engineering Unions]], they all urged him to call for one no later than November. Any later, they said, and they could not guarantee their memberships would remain on the job and off the picket line through the winter.<ref name="Goodman 226–27">{{harvp|Goodman|2003|pages=226–27}}, cited at {{harvp|López|2014|pages=[{{GBurl|LVy1DAAAQBAJ|page=60}} 60–61]}}</ref>

Unexpectedly, however, on 7 September, Callaghan announced that he would not be calling a general election that autumn but seeking to go through the winter with continued pay restraint so that the economy would be in a better state in preparation for a spring election, therefore the 5 per cent limit stood. The pay limit was officially termed "Phase IV" but most referred to it as "the 5 per cent limit". Although the government did not make the 5 per cent limit a legal requirement, it decided to impose penalties on private and public government contractors who broke the limit.<ref name=hay/><ref name="Davies">{{cite book |last1=Davies |first1=Andrew J. |title=To Build a New Jerusalem |date=1996 |isbn=978-0-349-10809-4 |url={{GBurl|ClNyQgAACAAJ|page=363}} |publisher=Abacus |pages=363–368}}</ref>

===Changes in labour movement===

Between 1966 and 1979, Britain's unions were changing and becoming more diverse. Most of the increase in union membership was driven by women returning to or entering the workforce—73 per cent of them joined a union during that period against 19.3 per cent of men newly in work, as manufacturing jobs, traditionally heavily male, disappeared. Black and Asian workers also filled union ranks; in 1977, 61 per cent of black men in work belonged to a union as opposed to 47 per cent of white men.<ref name="Tara Martin Lopez 32">{{harvp|López|2014|pages=[{{GBurl|LVy1DAAAQBAJ|page=32}} 32–33]}}</ref> Asian women became the face of the labour movement during the 1976–1978 [[Grunwick dispute]] over pay and conditions at a film processing plant in suburban London.<ref name="Tara Martin Lopez 57–59">{{harvp|López|2014|pages=[{{GBurl|LVy1DAAAQBAJ|page=61}} 57–59]}}</ref>

Within unions, power was also devolving to the rank and file. The political upheavals of the late 1960s in Europe and the United States had brought [[participatory democracy]] to the fore, and workers felt [[Industrial democracy|they should be taking decisions]], including about when and whether to strike, that had hitherto been the province of union leadership. [[Hugh Scanlon]], who took over as head of the [[Amalgamated Union of Engineering Workers]] (AUEW) in 1967, and [[Jack Jones (trade unionist)|Jack Jones]], general secretary of the [[Transport and General Workers' Union]] (TGWU) from shortly afterwards, were known among union leaders as "the dubious duo" for their advocacy for devolution.<ref name="Tara Martin Lopez 32" />

====Dissatisfied public employees====

Many new members were also coming from government jobs. In 1974, about half of the total British workforce was unionised, but 83.1 per cent of all public-sector workers were. In the health sector that reached 90 per cent. Many of the government workers joining unions were women.<ref name="Tara Martin Lopez 32" />

The public employees were in a particularly difficult position with regard to incomes policy. Governments kept their employees' pay, already lower than their private-sector colleagues, low both because they could and because they wanted to set an example for the private sector, an example the private sector rarely followed. Their unions were also frustrated that their growing numbers had not yet translated into corresponding influence within the TUC.<ref name="Tara Martin Lopez 111">{{harvp|López|2014|page=111}}</ref>

These matters came to a head with the 1977 fire brigade strike, a strike that many firemen were conflicted about since they knew they would be abandoning their own profession's duty to protect life, but felt that they could no longer make ends meet with their pay packets. They asked for a 30 per cent increase, 20 per cent over the government's limit at the time, and a limit to 42 hours of work each week. The government responded by declaring a [[state of emergency]] and bringing in Army troops as replacements. The TUC voted late in the strike to not campaign in support of the firemen, in order to maintain its relationship with the government.<ref name="Tara Martin Lopez 57–59" />

==="Stepping Stones" and hardening of Conservative position on unionism===

[[Margaret Thatcher]] was elected [[Leader of the Conservative Party (UK)|Conservative leader]] to succeed Heath in 1975. She had been known as a member of his Cabinet, where she served as [[Secretary of State for Education]], for her advocacy of market-based solutions over government intervention in the economy, and had become convinced, as she wrote later, by that experience that the only thing more damaging to the British economy than Labour's socialist policies was her own party's attempts to emulate them. Influenced by writers such as [[Friedrich Hayek]] and [[Colm Brogan]], she came to believe the power of British unions under the [[postwar consensus]] had come at the expense of Britain as a whole.<ref name="Tara Martin Lopez 55–57">{{harvp|López|2014|pages=55–57}}</ref>

In 1977 two of her advisors, [[John Hoskyns (policy advisor)|John Hoskyns]] and Norman Strauss, prepared a report called "[[John Hoskyns (policy advisor)#The Stepping Stones Report, 1977|Stepping Stones]]" which diagrammed the [[vicious cycle]] through which they believed the unions' influence exacerbated Britain's ongoing economic difficulties, such as [[unemployment in the United Kingdom|unemployment]] and inflation. Thatcher made it available to her [[Shadow Cabinet of Margaret Thatcher|shadow cabinet]] with the authors' recommendation that they all read it.<ref>{{cite web |last1=Hoskyns |first1=John |author-link1=John Hoskyns (policy advisor) |last2=Strauss |first2=Norman |title=Stepping Stones |url=https://c59574e9047e61130f13-3f71d0fe2b653c4f00f32175760e96e7.ssl.cf1.rackcdn.com/5B6518B5823043FE9D7C54846CC7FE31.pdf|publisher=Margaret Thatcher Foundation |date=14 November 1977|access-date=19 April 2020}}</ref> By the end of the year she had formed a steering group to develop a specific policy aimed at curbing union power under a Tory government, and a media strategy that would invest the public in this.<ref name="Tara Martin Lopez 55–57" />

To implement the media strategy, the party hired the advertising firm of [[Saatchi & Saatchi]], whose 1978 "[[Labour Isn't Working]]" campaign has been credited with persuading Callaghan not to hold an election that year.{{efn|Like his counterpart Donoughue, Hoskyns had concluded that the optimal time for an election for Labour was earlier, in the spring of 1978, with autumn being still slightly favorable, but the economic prospects unclear after that. He also preferred a later election as it would give the party the time necessary to make its case for a radical change in Britain's relations with its unions.<ref>{{harvp|Hoskyns|Strauss|1977|page=45}}</ref>}} In 1978 Britain's largest tabloid, ''[[The Sun (United Kingdom)|The Sun]]'', dropped its longtime support for Labour to instead embrace the Tories. Editor [[Larry Lamb (newspaper editor)|Larry Lamb]] met frequently with Thatcher's media advisor [[Gordon Reece]] to plan and refine strategy.<ref name="Tara Martin Lopez 18">{{harvp|López|2014|pages=18}}</ref> During the later phases of the Grunwick dispute, as strikers took to the streets to march and sometimes clashed violently with the police, the Tories began using the media coverage to leverage the critique of unionism contained in "Stepping Stones".<ref name="Tara Martin Lopez 58–59">{{harvp|López|2014|pages=58–59}}</ref>