Who Dares Wins

by Dominic Sandbrook

  To sort out British industry, though, you needed to sort out the trade unions. So ran one of the core principles of Thatcherism, which cast the unions as the greatest obstacle to Britain’s economic renewal. By later standards their prominence in the nation’s political life was simply extraordinary. Every week the papers carried front-page stories about strikes, go-slows, overtime bans and work-to-rules. On the evening news, burly men with thick spectacles were forever trooping out of Number 10, shaking their heads at what their members would think of the government’s latest offer. To the right, they were over-mighty barons, blind to the realities of economic life. But to the left, they were the defenders of working men and women, protecting the weak from inflation and unemployment. Membership was close to an all-time peak: by the end of the 1970s more than 13 million people, about 56 per cent of the workforce, belonged to a trade union. And since they were so effective at protecting their members’ interests, there seemed no reason why membership would not keep rising. The unions, wrote The Economist’s labour correspondent Stephen Milligan in 1976, had ‘more power and influence than [the] political parties’. All things considered, he thought them ‘the major political force’ in the land.6

  Despite its reputation as the ‘Sick Man of Europe’, Britain was not alone in suffering from strikes. Nor were British workers unusually attached to the ideals of revolutionary socialism. In fact, polls found that most union members just wanted better pay and better conditions, while their leaders, despite the press caricatures, were generally thoughtful, cautious and thoroughly pragmatic. But Britain was unusual in having so many competing unions, some of them almost comically small and old-fashioned, which meant they were engaged in what seemed an endless competition to outflank one another on the left. Britain was unusual, too, in suffering from so many unofficial strikes, triggered by shop stewards who were often much more militant than their leaders.

  Perhaps above all, because so many major industries were owned and run by the state, industrial action often pitted trade unionists against the government itself. That turned almost every major strike into a test of the state’s authority. And when the unions won – as the miners did in 1972 and 1974, or the public sector unions in 1979 – it only added to the sense that Britain was becoming ‘ungovernable’. Even before the Winter of Discontent, eight out of ten people thought the trade unions were too powerful. The irony, as the Financial Times’s labour correspondent Robert Taylor pointed out, was that their supposedly overweening leaders were ‘uncertain, rather frightened, reactive and muddled men’, desperately trying to keep up with their own members. Still, there was little doubt that something had gone badly wrong.7

  Even after Mrs Thatcher’s victory, the question of union power continued to dominate the front pages – with one notable exception. The Times had nothing to say about it, because in November 1978 it had been shut down after the print unions refused to accept new computer technology. It was almost a year before the paper returned to the newsstands. In the meantime, the ITV network was closed down in August 1979 after the technicians’ unions rejected a 15 per cent pay offer. They only returned in October when the television companies gave in and offered them 45 per cent. In the grand scheme of things this was a sideshow. But it made a huge impression on public opinion, not least since fans of Crossroads and Coronation Street were left staring at a darkened screen for three months. And at the time there seemed no reason why this particular soap opera might not continue indefinitely. ‘An air of ominous inevitability is gathering already around the new Government’s bid to escape from the pattern of recent history,’ wrote the Guardian’s Peter Jenkins that summer:

  No government has found an answer to the relentless momentum of competitive collective bargaining in Britain … The trade unions in effect have brought down the last three elected governments, not by unconstitutional confrontation, but by making it near-impossible for them to govern. The country is caught in a syndrome of decline and the industrial relations system is an important part of it.8

  In private, many of Mrs Thatcher’s allies agreed with him. In June 1977 a secret report on Britain’s nationalized industries by Nicholas Ridley warned that a Conservative government would inevitably face a challenge from ‘our enemies’ in the unions, probably ‘between 6 months and 18 months after the Election’. The most likely battlegrounds, Ridley thought, were the coal mines, the electricity industry or the docks, and the government should ‘take every precaution possible to strengthen our defences against all out attack in a highly vulnerable industry’. Another report by the moderate Lord Carrington was even bleaker, suggesting that there was little a Conservative government could do if they were challenged by the miners or the power workers. In fact, almost every member of the new administration thought conflict with the unions inevitable. In Hoskyns’s words, they ‘assumed from the outset that once the unions realised that the Government meant what it said about anti-inflation policy and trade union reform, they would try to break the Government’s policies and authority by direct strike action’.9

  Hoskyns believed beating the unions was the key to everything. In 1976 he and his colleague Norman Strauss, an unorthodox Unilever systems analyst, had prepared a blueprint to turn Britain around, entitled ‘Stepping Stones’. The greatest obstacle to ‘national recovery’, they wrote, was ‘the negative role of the trades unions’. So they thought Mrs Thatcher should campaign against ‘the dictatorship of unsackable union leaders’ and win a mandate for sweeping reform. Presciently, they believed the key to success lay with union members themselves. The ordinary member, they wrote, ‘is precisely the man we must get to vote Tory’. Mrs Thatcher agreed with every word, but thought their blueprint far too radical to be exposed to the public eye. During most of her time in opposition her attitude towards the unions was remarkably cautious. The Winter of Discontent allowed her to harden her rhetoric, telling Radio Two’s Jimmy Young that ‘the unions are confronting the British people; they are confronting the sick, they are confronting the old, they are confronting the children … If someone is confronting our essential liberties, if someone is inflicting injury, harm and damage on the sick, my God, I will confront them.’ Yet still she hesitated to adopt Hoskyns’s radical agenda. The only way to roll back union power, she told him in February 1979, was to do it ‘incrementally … like grandmother’s footsteps’.10

  The most obvious sign of Mrs Thatcher’s pragmatism was her choice of Employment Secretary. With his florid features and affable style, Jim Prior appeared the picture of a rural Tory squire. Behind the jolly banter and muddy wellies, however, was a canny political operator. The son of a successful solicitor, educated at Charterhouse and Cambridge, Prior had worked as a land agent before buying his own farm, which he ran on modern, mechanized lines, even supplying vegetables to Birds Eye. After serving as Ted Heath’s factotum in the late 1960s, he had finished joint third in the leadership election, standing on an unrepentantly moderate One Nation platform. The union leaders liked him; so did most journalists, who praised his ‘shrewdness and courage’, his ‘engaging honesty’ and his ‘earthy common sense’. Prior also had the distinction of having appeared, thinly disguised, in an entire series of novels. At Charterhouse he had struck up a close friendship with the future writer Simon Raven, who turned him into the character Peter Morrison in his ‘Alms for Oblivion’ sequence. For Prior this was clearly a bit embarrassing: later, he complained that it was ‘not quite cricket’ for the raffish Raven to involve him in ‘exploits dredged up from the murk of his psyche’, among them a liaison with an Indian prostitute. His old friend’s novels, he once remarked, were ‘James Bond books for poofs’.11

  Given his old-school style and One Nation principles, Prior might have expected an unceremonious departure from Mrs Thatcher’s court. Unlike some of his contemporaries, he refused to tailor his opinions to the new order, and treated her with a mixture of amused condescension and incredulous horror. As for Mrs Thatcher, she saw Prior as the classic example of a
‘false squire’. ‘They have all the outward show of a John Bull – ruddy face, white hair, bluff manner,’ she wrote in her memoirs, ‘but inwardly they are political calculators who see the task of Conservatives as one of retreating gracefully before the Left’s inevitable advance.’ ‘All they’re thinking about is how to plan the next retreat,’ she told Ferdinand Mount. ‘That’s not why I came into politics.’ Yet, for the time being, she thought it best to keep Ted Heath’s old lieutenant inside the tent, rather than allowing him to roam around outside. In any case, she later admitted, keeping Prior was a good way of reassuring the union leaders: ‘Jim was the badge of our reasonableness.’12

  Even so, Mrs Thatcher was determined to stamp out the beer-and-sandwiches culture of the Wilson and Heath years once and for all. Instead of inviting the union leaders to settle the affairs of the nation inside Number 10, wrote Nigel Lawson in 1976, their aim must be to treat them with ‘benign neglect’. There would be no incomes policies, no pay ‘norms’, no concordats, no deals. Unions and management must reach agreements on their own, without government interference. As Charles Moore remarks, the point was not to have a better working relationship with the unions. It was to create the conditions ‘in which government had virtually no need for a relationship with the unions at all’. So when, on taking office, Prior recommended early talks with the Trades Union Congress to discuss their pay objectives, Mrs Thatcher wrote simply: ‘No.’13

  Prior’s priority was to begin the painstaking work of reforming Britain’s industrial relations without provoking the unions into rebellion. In this respect, it helped that he had been so close to Heath and had learned from his old boss’s mistakes. As he told Mrs Thatcher on 14 May, it would be ‘fatal to follow the 1970 pattern and rush things too much’. Instead of directly attacking the closed shop, for example, his Employment Bill simply required that new closed shops be approved by 80 per cent of the workers in a secret ballot.fn2 Similarly, there was no insistence on compulsory ballots before strikes, although Prior offered public funds for unions that wanted to hold one. Finally, the strike laws were tightened, with a ban on secondary picketing, although not on broader secondary action. All in all, it was a remarkably careful package, especially by comparison with Heath’s efforts in the early 1970s. There were no high-profile legal experiments, no new courts and no new powers to jail individual trade unionists. As Prior put it, the aim was to ‘bring about a lasting change in attitude by changing the law gradually, with as little resistance, and therefore as much by stealth, as was possible’.14

  As might have been predicted, the unions condemned Prior’s bill as a disgraceful attempt to roll back the hard-won rights of Britain’s workers. But the greatest fury came from the right, where many Tory backbenchers, egged on by the Telegraph, the Mail and the Express, saw him as an appeaser. Even his Cabinet colleagues asked why he was not doing more to tackle violent picketing, to impose ballots before strikes or to eliminate the closed shop. From one perspective, all this worked in Prior’s favour. With the Conservative press attacking his bill as far too weak, it was easier for him to dismiss the unions’ complaints that it was too confrontational. The obvious downside, though, was that he was caught in the middle, with abuse raining down from both sides.

  And it was at precisely this point, with Prior’s critics sharpening their knives, that events took a dramatic turn. On 7 December, after weeks of arguments about pay, the steelworkers’ leader, Bill Sirs, called for an all-out strike. Four days later, with terrible timing, British Steel announced 52,000 redundancies. On 21 December they made a fresh pay offer. Sirs rejected it outright. On the second day of 1980, the steel strike began.15

  The origins of the steel strike, the first great confrontation between Mrs Thatcher and the trade unions, predated her arrival in office. After years of heavy losses, British Steel’s management had long recognized that they needed to save money. Callaghan had set them the target of breaking even by March 1980, but they were clearly going to miss it. So, in the autumn of 1979, the firm’s chairman, Sir Charles Villiers, a former member of the Special Operations Executive in the Second World War, decided on drastic measures. The annual pay round was approaching, and with inflation at more than 17 per cent and rising, the miners and car workers had already secured handsome rises. But Villiers offered his steelworkers a nominal increase of just 2 per cent with local productivity bonuses.

  To Bill Sirs, the leader of the Iron and Steel Trades Confederation (ISTC), Villiers’s offer was outrageous. Sirs had grown up in County Durham in the 1920s as one of ten children who slept, five to a bed, on the ground floor of a terraced house, before becoming an errand boy, a crane driver and a union representative. He was not a militant. He just wanted a fair deal for his men. But even British Steel’s revised offer, 5 per cent, would not come close to keeping his members’ heads above water in an age of high inflation. As Sirs remarked, it was as if ‘they were trying to make us look small’. He had no choice, he said, but to call his men out.16

  Later, Mrs Thatcher’s critics claimed that she had deliberately picked a fight with a moderate, weaker union to further her anti-union agenda. But the archives show that this is not true. Even the hawkish Hoskyns thought the steelworkers had been hard done by and hoped a strike could be avoided. The problem, though, was that British Steel was losing £7 million a week, and Mrs Thatcher had publicly said that any pay increase must be paid for by better productivity. So, just as Villiers was the prisoner of his balance sheet, and Sirs was the prisoner of his members’ expectations, she was trapped by her own rhetoric. As Sir Keith Joseph told her on 21 December, they ‘really had no choice’, since giving in to the steelworkers would signal ‘the abandonment of our general policy of firm financial discipline in the public and private sectors’. In Hoskyns’s words, the strike was an ‘opportunity to give the public a first lesson in economic reality’, as well as ‘a political stepping stone on the long road to a reformed trade union movement’. But he saw it as a fight that had been forced upon them, not one they had chosen themselves.17

  The most important part of the lesson, as Mrs Thatcher saw it, was that the government would no longer intervene to settle disputes, but would respect the ‘management’s right to manage’. Her predecessors had never been able to stay out of industrial disputes, invariably summoning the warring parties to Number 10 before miraculously finding some extra cash so that everybody could go home happy. But she was determined to break the cycle. On 17 January, Joseph told the Commons that the strike was a classic example of the ‘British disease’, characterized by the government’s inability to let managers fight to the finish. The public, he said, ‘have come to see giving way as the decent and normal thing to do. The Government are called upon to “settle it” – meaning to give way – often with the taxpayers’ money.’ As a result, Britain had ‘lost competitiveness, lost jobs and lost the better pay, better pensions and better public services that we could have had and that most of our neighbours have’. So this time the government would stay out.18

  To Jim Prior, these words were profoundly shocking. It was ‘inconceivable’, he thought, that any other post-war government would have remained aloof from a dispute in one of the nation’s key industries. But his own position now seemed increasingly fragile, because the strike handed so much ammunition to his critics inside the Tory Party. Indeed, it was a sign of the right’s dread of the unions that their rhetoric became so strident so quickly. On 14 January the Centre for Policy Studies’ director Alfred Sherman, never famed for his sense of proportion, sent Mrs Thatcher a long memo under the title ‘The Blockade of Britain – Decisive for British Democracy’. The dispute, he wrote, was ‘not a strike but an insurrection … a major threat to democracy and the chances of a Conservative Government restoring the country to economic viability’. Sherman blamed the Communists, which was paranoid even by his standards. But his message was merely part of a chorus of anti-union hysteria, partly incited by Mrs Thatcher’s Parliamentary Private Secreta
ry, Ian Gow. An inveterate plotter, Gow welcomed the chance to discredit one of his heroine’s rivals. On 5 February he sidled up to Alan Clark and asked if he was planning to ask anything at Prime Minister’s Questions. ‘Nothing special,’ Clark said. ‘Anything I can do for you?’ Muttering ‘out of the corner of his mouth’, Gow said: ‘Ask when they are going to put some teeth into the Employment Act.’ ‘Ian loathes Prior’, Clark noted, ‘and never ceases to complain about him.’ He never got to ask his question, though – because another Tory backbencher asked it instead.19

  Among Mrs Thatcher’s cheerleaders in the press, the clamour for tougher reforms was accompanied by increasingly frenzied attacks on Prior himself. ‘WHAT THE HELL HAS CHANGED?’ shrieked the front page of the ever-understated Daily Express on 7 February. At the election, the paper said, the Tories had ‘vowed to end industrial chaos. And what have we got? A pussyfooting Jim Prior and a wobbling Cabinet.’ This was very convenient, of course, for Mrs Thatcher, and some of the Express’s front pages might almost have been dictated in her press office. ‘PICKETS IN CHARGE: Pussyfoot Prior’s new law leaves unions’ gate open,’ ran another front-page rant a week later. This time it claimed that thanks to the efforts of ‘Prior’s “pussyfoot” section … the country could face two more years in the grip of the unions before the Government gets the law right’. That line about the ‘pussyfoot section’ sounds uncannily like something Mrs Thatcher might have said, even if she didn’t.20