A Short History of Trade Unions - Part 7: 1945 – 1970
April 2020
This Part covers the period 1945-1970 and includes the election of the first majority Labour government in 1945 and its nationalisation programme plus the Incomes Policies of the Tory and Labour governments in the 1960s and their impacts on trade unionists.
The previous Parts of this short history of trade unions as well as the Leading Labour Lives series can be seen at https://www.madsmeds.org/home
Union membership increased throughout this period as can be seen on the table below.
Trade unions and TU membership 1939-1979.
Year No. of trade unions registered No. of TU members Union density:
members as a % of employees
1939 1019 6,206,000 31.9
1949 742 9,077,000 44.7
1959 668 9,257,000 43.3
1969 561 9,999,000 44.2
1979 454 12,639,000 53.4
This table shows the figures either side of the period covered in this article so that trends can be identified specifically:-
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the numbers of trade unions went down as unions merged with each other.
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the numbers of members steadily increased throughout this period as did union density.
1945 – The Labour Party won a great victory and first majority at the polls – 395 seats to 215 for the Tories. Britain was broke and deep in debt at the end of the 2nd World War and yet, despite the financial difficulties, during 6 years in office the Labour government carried through a vigorous programme of reform. The Bank of England, the coal mines civil aviation, cable and wireless services, electricity, railways, road transport and steel were all nationalised.
The National Union of Mineworkers (NUM) was founded from the Miners’ Federation.
1946 Repeal of the Trade Disputes Act 1927 (For more details on this Act see entry at www.madsmeds.org/trade-union-history-part-6 )
The Bank of England was nationalised. As a result the Bank was able to pursue the multiple goals of Keynesian economics after 1945, especially "easy money" and low interest rates to support aggregate demand. It tried to keep a fixed exchange rate and attempted to deal with inflation and sterling weakness by credit and exchange controls.
1947 Coal, rail, canals, and road haulage were nationalised.
The Winter fuel crisis. The winter of 1946–47 was a harsh European winter noted for its impact in the United Kingdom. It caused severe hardships in economic terms and living conditions in a country still recovering from the Second World War. Large snow drifts blocked the roads and railways which caused problems in transporting coal to electric power stations. As a result, some power stations needed to close down or restrict power output which caused massive disruptions of energy supply for homes, offices and factories. Animal herds froze or starved to death and vegetables were frozen in the ground. People suffered from the persistent cold, and many businesses shut down temporarily. When warm weather returned, the ice thawed and flooding was severe in most low-lying areas.
1948 Electricity was nationalised.
The National Health Service (“NHS”) was introduced in 1948
1949 Britain devalued the pound sterling by 30%. This was a major world economic event given that the pound was and still is one of the major currencies in the world. In fact, 9 other countries followed suit then. They were Australia, India, South Africa, New Zealand, Eire, Denmark, Norway, Egypt, and Israel.
Gas was nationalised.
1950 A Labour government (with a 5 seat majority) was re-elected in February with Clem Attlee as prime minister.
1950-53 The Korean War led to high inflation.
1951 Iron and steel were nationalised.
In October, a Conservative government was elected with Winston Churchill as prime minister.
1955 Rail and Print strikes. The government declared a State of Emergency due to the National Rail Strike. Electricians and maintenance workers in London newspaper offices also went on strike bringing newspaper production (except in the provinces) to a halt.
1956 Frank Cousins elected as general secretary of the T&G. For more details see Part 1 of the T&G history at www.madsmeds.org/trade-union-history
1959 The Stevedores Union was expelled from the TUC for poaching T&G members.
George Woodcock became the TUC general secretary.
1961 The TUC expelled the Electricians Union over ballot rigging.
The Tory government imposed a “pay pause” on all public sector workers and requested the private sector to follow.
1962 The National Incomes Commission was established and proposed a pay limit of 2-2.5%. This was boycotted by the TUC and abolished after the
1962-63 A severe winter led to high unemployment. The winter of 1962–63, known as the Big Freeze of 1963, was one of the coldest winters (defined as the months of December, January and February) on record in the UK. Lakes, rivers and even some parts of the sea froze. As in 1947, rail and road transport were severely impacted.
1963 The National Economic Development Council was created and proposed a “guiding light” of a 3-3,5% pay increase limit.
The Contracts of Employment Act required employees to give a minimum period of notice.
1964 The Tory Chancellor of the Exchequer, Reg Maudling, proposed a budget which was popularly known as Maudling’s “dash for growth” and attempted to break out of “stop and go” cycle. Following a period of economic difficulty, with a growth target of 4%, Maudling was able to remove income tax from owner-occupiers' residential premises. He also abolished the rate of duty on home-brewed beer which in effect legalised it. However, Harold Wilson and James Callaghan blamed the "dash for growth" that followed the 1963 budget for increasing sterling’s chronic instability between 1964 and 1967 and by greatly increasing domestic demand the budget certainly exacerbated the existing balance of payments problem. Maudling largely recognised this himself by the time of the 1964 budget and, although he increased taxes, he did little to subdue demand in an election year.
EXTRA NOTE As the 60s and 70s advanced, unions got more and more attention and criticism from the Press and politicians. The issues of inflation, trade deficits, strikes and trade unions were at the centre of political agendas and often treated as being closely related. Government embarked on a series of attempts at trade union reform.
1964 In October, a Labour government was elected with Harold Wilson as prime minister.
The Government inherited a record Balance of Payments deficit - £800 million. The Tory Chancellor of the Exchequer Reg Maudling left a note to his successor, James Callaghan, simply stating "Good luck, old cock.... Sorry to leave it in such a mess."
(In a similar incident in 2010, the former chief secretary to the Treasury, Liam Byrne, left a note for his successor which said 'Dear chief secretary, I'm afraid to tell you there's no money left,'. Byrne said the message was meant in jest.)
1964-65 Government budgets cut spending and raised taxes to restore confidence in the pound.
1965 The Redundancy Payments Act introduced the principle that after a qualifying period of work, people would have a right to a severance payment in the event of their jobs becoming economically unnecessary to the employer. The functions of the redundancy payment were :
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to internalise the social cost of unemployment to the employer,
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make employers think more carefully before making people redundant,
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to compensate the employee for the loss of a job, and
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to provide a minimum sum of money for the employee in case future employment could not immediately be found.
1966 In March, a Labour government was elected with a majority of 98 and Harold Wilson as prime minister.
1966 British seamen went on strike in a dispute over increased working hours. Shipping companies wanted to increase the standard working week from 40 hours to 56 hours. As a result of this strike many liners and cruise ships were stuck in port for the duration of the dispute. The Seamen’s strike prompted speculation against the pound.
The Government raised interest rates to 7% which caused the toughest deflation since 1949.
A statutory 6 month pay freeze was imposed following the seamen’s strike and the exchange rate crisis.
1967 Devaluation of the £. When Labour took office in October 1964, it was immediately faced with a deficit of £800 million, which contributed to a series of sterling crises. A possible solution was to devalue the pound against other currencies to make imports more expensive (which meant more inflation), but exports cheaper, causing an increase. As PM, Harold Wilson resisted this.
However, due to several factors including international crises and dock strikes, by November 1967 the financial pressures had become overwhelming. On 16 November the Chancellor of the Exchequer, James Callaghan, with Wilson’s backing, recommended to the Cabinet that sterling should be devalued by just under 15 per cent. This was agreed and then implemented, at 14 per cent on 18 November. A package of measures including defence cuts, restrictions on hire purchase (credit), and higher interest rates was also agreed.
In a famous broadcast, Wilson informed the nation that ‘the pound in your pocket’ had not been devalued. This was a controversial claim which appeared to ignore the fact that imports would become more expensive.
1965-68 The Donovan Commission The Royal Commission on Trade Unions and Employers’ Associations (also known as the Donovan Commission) was an inquiry into the system of collective UK Labour law, chaired by Lord Donovan. It was appointed by the Labour Party as a response to growing criticism of trade unions – focussing on the growing number of unofficial strikes, lack of balloting and non-enforceability of collective agreements. Its report, known as the "Donovan Report", was issued in 1968 and broadly backed the existing system. However, it did propose setting up a Commission on Industrial Relations (CIR) which could monitor best practice and make recommendations to employers and trade unions in dispute. The report also said that, to promote TU recognition, the government should have powers – on the CIR’s advice – to impose arbitration in cases where there was no collective bargaining5.
1969 “In Place of Strife”. This was the name of a government White Paper produced by Employment Secretary, Barbara Castle. (www.madsmeds.org/womans-place-2 )
Barbara Castle
It went beyond the Donovan Commission by proposing new powers for the Government –
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To impose a “conciliation pause” of 28 days before any strike it thought endangered the national interest.
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To impose a solution to inter-union disputes, in cases where neither the TUC nor CIR were able to find a solution.
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To order a strike ballot “if circumstance justified it”.
The Bill based on “In Place of Strife” was killed by the Party and TUC opposition.
1970 The Equal Pay Act provided for equal pay for women carrying out comparable work with men and outlawed discrimination in terms and conditions of employment (effective from 1975).
In June, a Tory government was elected with Ted Heath as prime minister.
Part 8 will deal with the 1970s and the policies of the Labour and Conservative governments during this period and how these impacted on trade unions.
Solidarity
Brian Madican
April 2020
