The decision to float the pound was taken with two thoughts in mind. First, to halt the massive outflow of capital from London. Second, to prepare the ground for entry into the E.E.C. Capital outflow was basically caused by doubts about the U.K.'s prospects of getting inflation under control. The short term strategy the government had developed to curb inflationary' wage claims depended heavily on 'confronting' sections of the working class on the wages front. The State was to be central in curbing the indiscipline 'of rank-and-file trade unionists. Understanding the failure of the Wilson government to make Incomes Policy work by 'co-operating' with the trade unions, Heath's short term policy was based on the ability of the No.46 24 July 1972 Fortnightly Paper Of The International Mar union rank-and-file organisation:
But the government has been badly stung on the Industrial Relations Act. The N.I.R.C. is proceeding far more carefully than before over the Midland Cold Storage depot picketing (one Tory spokesman attacked the Midland for bringing proceedings at all). Confidence in the working class's ability to smash the Act is shown by Bernie Steer's comment that they had "broken the law in good faith" and still not been arrested. Any pretence that the law is above class struggle is shattered to bits. In this situation the Government must manoeuvre on all fronts to change the unfavourable balance of forces. The most obvious perspective that presents itself is a deal with the T.U.C.
AN ALTERNATIVE STRATEGY?
When the lame duck' policies collapsed, it was not just a problem of econoraic strategy. The Tories faced a severe political crisis. Confrontation policy no longer appeared so worthwhile to capitalisin in terms of its risks. The response has been a shift of opinion within the Tory Party. Two political facts of life loomed up. First (as The Economist has been saying), the way to cut the working class's share of the National Product is by hidden methods. Decimalisation was a prime example. In this way you do not provoke a head on clash with the trade unions, as the Act does. The trade unions have no strategy to deal with the all-round attacks of capitalism. The other political fact (again raised by The Economist) is to use the T.U.C. in the role in which it sees itself. Crudely (per Economist) let the T.U.C. have £900 million per annum to distribute in wage rises. Less crudely, integrate the T.U.C. into the policy making bodies of the Go vernment. These two approaches boil down to the same thing. Make the trade union movement take some responsibility for the running of the capitalist system.
Most Tories see the new detente with the T.U.C. as a stop-gap measure.
Heath is willing to shelve a few clauses of the Industrial Relations Act for some agreement over wage increases. The only alternative is an Autumn wage freeze which in the present conditions the government could not hope to hold. THE T.U.C.
The Government has shelved their policy over the U.C.S., Rolls-Royce, etc., and appears to be cooling off over the Industrial Relations Act. Now the T.U.C. is much happier working with them. Up to now the T.U.C. were in a dangerous position, sitting on a potential rank-and-file explosion against the Act. Naturally the pressure of the working class was all in terms of the need for a strategy to defeat the Tories. Feathers' alternative plans for the economy peddled to the Labour Party, were not much use to the rank-and-file. Now the Tories are prepared to debate these plans. That means the T.U.C. feel they cen move off the spot.
The T.U.C. looks on itself as a pressure group, not as an instrument of class struggle.
This was shown when they got the boot from the Tories. Their role was one of planning alternative (mainly unworkable) strategies for the economy. A real workers leader-ship would have organised fierce resistance to both unemployment and the Act. Feather was booed from Liverpool to London on the unemployment rallies. Over the Act they capitulated without the first shot being fired with the T&GWU's fine ( and were outdone in radicalism by a Court of Appeal!) By being unable either to lead the class struggle or to 'put pressure on the Tories they were in continual danger of being bypassed in the fight between the government and the rank-and-file. They were totally marginalised in the recent Chobham Farm dispute. In speeches the T.U.C. leaders had to substitute "for the return of a Labour Government" (in which they would have a place) for any plan to bring the Tories down based on industrial action.
THE LEFT One clear lesson emerges from this period. The left on the T.U.C. have no strategic importance whatsoever. They should have put forward a programme to organise the defeat of the Tories through industrial action. However Scanlon et al were just as frightened of mounting a potential full scale attack on capitalism as Feather. The left T.U.C. when faced with the clearest class division of interests do not use that pressure to take over the T.U.C.; they duck. It follows that the C.P.'s policy, based as it is on the left of the T.U.C., is built on sand. One event showed this last week. When the T.U.C.'s Economic Committee met to discuss the Governments proposals for joint consultation, a few opposed talks because the Industrial Relations Act was still in operation. However the left were quite willing to compromise on the basis that the talks were called a special meeting of the National Economic Development Council The name was important to the left (though not to Heath) because of the central role they give the T.U.C. of participating in permanent government policy making bodies. THE DEAL A Iready the T.U.C. have agreed to arbitration procedure to look into strikes of national importance. Also on the cards is a 'threshold' say that the result of the American elections agreement now that it seems likely that the C.B.I. will peg prices for another three months What this means is that the government will smile favourably on limited rises if the cost of living has risen above a certain level. Four points are immediately obvious. 1. Rises can only take place after a certain price threshold has been reached. By restricting prices to a certain level of increase, just below the threshold, no pay increases are justified". 2. Such a deal accepts in principle that workers" living standards should not advance at all in this period. 3. The Cost of Living Index can mean anything to anybody. Stability in high priced goods does not affect the worker but affects the Cost of Living Index. 4. Wage differentials, the economic tool to divide the working class, are given formal recognition by the T.U.C.
CONCLUSION It is too early to say that the government has abandoned all the trappings of confrontation. Many pundits regard the deal with the T.U.C. as a one-off job. The object is to gain time. A decisive defeat will still have to be inflicted on the working class to prepare Industrial Relations Act to smash tra the number of strikes, and despite the limited victory over the engineers (over 1200 shops have signed deals, most way under the claim) the potential effects of the threatened national docks strike, for instance, would wreak havoc on the economy.
However, the Government now realises clearly that the restraining influence of the T.U.C. is more effective when they are co-operating with government than when they are not. As for the T.U.C, whether talks about a deal are a one-off job or not, they have little choice but to jump for it. and helped him achieve his nomination. From