Buying Time from the Unions

The workers are angry, but they voted for a compromise

It was only a partial victory, but for Britain's Prime Minister James Callaghan every little bit helps these days. Meeting last week in the tacky resort city of Blackpool, 1,148 delegates of the powerful Trades Union Congress voted by a 3-to-2 margin to limit the future wage-increase demands of their individual unions to one a year. Callaghan would have preferred a third year of voluntary wage restraints in accordance with the government's incomes policy (TIME, July 18). The effect of the T.U.C. vote, even though it set no limits on the size of wage hikes unions might demand, is to put off most new contract negotiations to 1978--thereby buying a little time for the Labor-led coalition government in its battle against inflation.

Two years ago, the unions voluntarily accepted government-proposed guidelines that limited wage increases to -L-6 in 1975-76 and 4 1/2% in 1976-77. But after last year, in which prices rose by 15%, workers decided they had had it; unions throughout Britain announced that they intended to seek gains of 20% to 100% beginning this autumn. For Callaghan, the unions' actions threatened a political crisis as well as an economic one: Liberal Party leaders warned that they would withdraw their crucial 13 votes in the House of Commons from the Labor government unless it effectively restrains wages. Chancellor of the Exchequer Denis Healey and union leaders suggested the twelve-month rule as a compromise, since it would at least defer big wage increases until next year, when inflation is expected to ease.

The twelve-month rule was the hottest issue at Blackpool. Veteran union leaders who support it were jeered by the militant rank and file; one union chief, National Union of Mineworkers President Joe Gormley, was spat upon and called a "scab" by demonstrators. It was left to the Prime Minister himself, a trades-union member for four decades, to make the most effective case for wage restraint. In a forceful, televised sermonette, Callaghan pointed out that wage increases above 10% would "seriously weaken" the government's chances of containing inflation. "I was brought up to believe that free collective bargaining was the milk of the gospel," he said, in defense of a third year of wage guidelines. "[But] if I went into the witness box today, having watched its operation over many years, I could not with honesty declare that it produced either justice for the weak or fairness between different groups."

Callaghan was occasionally interrupted by hecklers but received the traditional standing ovation when he finished. Although he had preached an unorthodox homily for a Labor Prime Minister, he drew partisan support from his audience by warning that a wage explosion could lead to a Conservative takeover. "I don't want to see those with a different philosophy, or no philosophy at all, taking it from us," said he. "The question is whether we have the guts and stamina to stick to it. We are going to."

The next day, delegates accepted the twelve-month rule, but at the cost of an ominous amount of internal strife. The opposition to the rule included delegates of the 1.9 million-member Transport and General Workers' Union and the militant 260,000-member National Union of Mineworkers, whose members rejected the recommendations of their leaders. Most of the margin of victory came from the 1.2 million-member Amalgamated Union of Engineering Workers, many of whose delegates tried in vain to challenge the pro-rule vote reported by President Hugh Scanlon. That move was scotched by Marie Patterson, a member of the transportation workers union, who said the challengers were out of order and snapped, "I am not here to rule on the internal workings of the A.U.E.W."

Dangerous as a defeat would have been to Callaghan, the victory, ironically, assured very little. The decision on the twelve-month rule is nonbinding; the T.U.C. has no power to prevent an individual union from breaching it. Workers on the factory floor hold the key to any policy of restraint by individual unions, and just now they are in a rebellious mood. After the congress, some union leaders hinted that they were fully prepared to flout the twelve-month rule; Arthur Scargill, Communist leader of the Yorkshire miners, said, "This decision makes no difference to the miners' wage claim." They want a pay increase on Nov. 1, rather than in March, which would be twelve months after their last contract negotiation. A midwinter miners' strike remains a possibility. Privately, both union leaders and employers are predicting that the next round of settlements will fall in the 15% to 17% range--far higher than the 10% sought by Callaghan and Healey. Observed Clive Jenkins, general secretary of the white-collar Association of Scientific, Technical and Managerial Staffs: "I think it's going to be a winter of deep discontent."

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