The Labour government is larding its insistence on a new round of wage restraint with promises that there will be a significant economic upturn next year providing, of course, that wages are held down. Certain indicators do give credibility to the claims of the Labour government; the stock market is high, the pound is steady in the currency markets, the Treasury is predicting a £1.5 billion trading surplus in 1978. But all the real indicators of economic performance and prospects suggest that British capitalism has failed to overcome its deep-seated ills and that the world economy is tottering towards a new generalised recession.
The Labour government is still presiding over a stagnant economy. GDP fell by 1% in the second quarter of 1977, industrial production was down by 0.7% in the same period, consumption reached its lowest point for five years. The industrial production index in the middle of this year stood just a little over the 1970 level and 7% below its 1973 ‘peak’.
This shrinkage in the first half of 1977 goes alongside only a marginal increase in capital spending by manufacturing industry. Last year the Department of Industry projected 15–20% growth in 1977 capital spending, arguing that such a growth was necessary for the scale of modernisation and re-equipping needed to render British capitalism more competitive. Figures announced by the Financial Times show that British capitalism is nowhere near its target — in fact in the first half of this year capital spending is only up 2½% on 1976 levels.
The Labour government has looked to expansion on the part of the ‘stronger capitalisms’ to stimulate the British economy. But if we look at those stronger capitalisms we can see that West Germany has scaled its predicted growth rate down from 5% to 3% this year, and that all indicators show that the US economy is slowing down. Steel output, a key indicator of world economic performance, fell by four million tonnes in the first seven months of this year in the 29 major capitalist economies — it fell by 8.2% in West Germany in this period, and by 7.7% in Britain. The OECD and the UN Conference of Trade and Development are bracing now for a recession before the end of 1978.
In this situation further attacks on workers’ living standards are absolutely necessary for the British ruling class. They are not an option or a ‘preference’. In the last 12 months the official price index rose by 17.7%, wages by 9.7%; the problem for the British ruling class, and the Labour government, is how to force a further cut in living standards.
For the last two years British capitalism has been able to cut real wages by direct agreement with the trade union bureaucracy. Anger and frustration amongst rank and file workers have made this an inoperable strategy for a third year.
The TUC could not have sold another formal incomes policy to shop floor workers. The employing class and their most responsive agents know that they will have to confront this shop floor militancy and anger head on.
It is in this context that we must understand the Labour government’s commitment to stand firm, to support and even pressure all employers in the struggle to hold wage increases below 10%. It is in order to attack shop floor prerogatives and organisation that the Leyland bosses are moving to force through a national bargaining structure that would insulate annual negotiations with the trade union officials from the pressure and mood of the rank and file. The new hard-nosed Tory stance on Grunwick, on the closed shop, is not an aristocratic lapse — it is a recognition on the part of significant sections of the ruling class that if the trade union cannot deliver the goods then the employing class will have to organise itself anew to attack workers’ organisation and strength. The Grunwick dispute and the increasing number of recognition disputes indicate this line of attack on the part of an important section of employers.
The Labour government and the employers have a series of key weapons to use in the struggle against shop floor militancy and anger. Firstly they hope the threat of unemployment — figures now stand at a post-war record, and are going up — of lay-offs and insecurity will force key sections of workers into submission and passivity. Secondly, they know that the trade union bureaucrats will not lead struggles to defend shop floor strength, or undermine the Labour government. The Leyland package does not threaten the bargaining position and role of the trade union officials; the threat of a ‘Tory’ government can be invoked to force the TUC into retreat.
Against these tactics revolutionaries have to be absolutely honest about the preparedness and ability of the working class to fight back. Whole sections of workers clearly reject the wage-cutting policies of the Labour government and the complicity of the trade union leaders in these policies. But the anger and militancy remain sectionalised and insular. The knowledge that the trade union leaders will not lead a serious fight — underlined by the acceptance of the 12-month rule at the TUC Congress — poses a serious crisis of policy and leadership on the shop floor, in the shop stewards committees and trade union branches.
Two years of TUC-policed wage cuts and ideological barrage from the Labour government has seriously undermined the fighting confidence of militant workers: who know that to fight alone is to fight their trade union officials, who know that traditional forms of wage ‘leap-frogging’, of ‘special case’ and ‘skilled status claims’, bring the shop floor organisation up against the Labour government with no guarantees of support from the trade union movement — official or unofficial.
It is in this context — of mounting anger alongside a crisis of direction and leadership — that we can understand the continuing simmering lull in the struggle, the climbdown of such groups as the dockers when faced with fighting alone, unofficially, against the employers and government. It is in this situation that the trade union leaders will organise to play sections of workers off against each other, to isolate and sell out struggles. This was made quite clear by the AUEW leadership in the Leyland toolroom struggle.
This crisis of leadership, of political direction, poses sharply the need for policies that can lead a united fight against the plans of the employers and the Labour government. It poses urgently the need for rank and file organisation to fight for those policies, independent of the trade union leadership and refusing to hold back or limit struggles in order to maintain the anti-working class Labour government.
Such a rank and file movement must be built in the period ahead on the basis of a clear political alternative to the sell-outs of the Trade Union bureaucracy and to merely sectionalised militancy.
A shop steward-based rank and file movement must be internally democratic, allowing freedom of debate and discussion on questions of tactics and strategy. So-called ‘Rank and File’ movements organisationally controlled by particular political groups — the ATUA, the SWP ‘Rank and File Conferences’ — cannot meet this need. But a rank and file grouping must pass immediate tests in action and struggle, independent of the trade union leadership. ‘Democratic’ talk shops incapable of deciding on questions of tactics and strategy for fear of a decisive break with the left bureaucrats (the STA, the Engineering Voice) can only be an obstacle to the building of a fighting rank and file movement.
What are the key tests in struggle that a shop stewards-based rank and file movement must pass in the period ahead? It must be able to organise industrial solidarity action, strike action in support of all workers fighting the Labour government’s policies, fighting to defend shop floor strength, and for trade union and democratic rights. The Grunwick dispute shows clearly that the trade union bureaucracy, the left and the right, will organise only token and symbolic action — even under pressure. A rank and file movement must organise to support more vulnerable and less well-organised workers, supporting their right to caucus, fighting to drive male chauvinism, active racism and the fascists out of the unions.
A rank and file movement must lead struggles for a wage policy that can unite workers in struggle — one that is an alternative to wage cuts, special status claims and productivity deals. Against social spending cuts, against unemployment and layoffs, a rank and file movement must fight for policies that can stop the attacks and maintain the fighting unity of the workers’ movement — employed and unemployed, public and private sector workers.
It is our conviction that only a communist programme can equip a rank and file movement to oppose the current attacks, to lead workers in struggle independent of the trade union bureaucrats, to organise a movement capable of struggling for power. In the rank and file conferences this year Workers Power will be fighting for this position.
