Dr Madsen Pirie is President of the Adam Smith Institute.
It was 35 years ago, in January 1979, that labour relations in Britain began to change. The Adam Smith Institute, then a comparative newcomer to the scene, put out its first publication, “The Trojan Horse“, by John Burton, a young academic economist. The book presented an analysis of union power in British politics and identified what it called “the power vortex.” Labour governments had granted trade unions extraordinary powers and privileges, which they used to support the Labour Party and Labour candidates at elections. When successful the unions would demand even more powers and the spiral continued.
This had made the unions dominant and had destroyed industrial relations in Britain, together with the country’s international competitiveness. Britain had the most days lost through strikes of any advanced economy. Delivery dates could not be guaranteed, and the poor quality of many of its products made the country’s name a byword for shoddy unreliability.
The book appeared on January 14th in the middle of a “Winter of Discontent” in which many public sector workers went on strike for bigger pay settlements. Rubbish bags were piled in mounds many feet high in London’s Leicester Square, and in some cities the dead were left unburied as cemetery and crematorium workers walked off their jobs. In one widely-reported incident, ambulance workers left patients in the snow when told over the radio to go on strike.
The ASI’s book had been planned long before these troubles, but it hit a raw nerve. It received massive coverage, including two successive full-page features and editorials in the Daily Telegraph. The book set out proposals for bringing the unions within the law, and put the issue onto the list of reforms prioritised by the first Thatcher government, elected in May of that year.
Attempts by the Heath and Wilson governments to reform union powers had been beaten off by the unions. Heath had been voted from office, and Labour’s Barbara Castle had been forced into a humiliating climb-down. The Thatcher team decided to do it slice by slice, keeping every proposal below what the ASI called “barricade threshold.” Union power was not abolished, but redistributed downwards from leaders to members. Compulsory government-funded secret postal leadership ballots enabled members to choose more moderate leaders than those endorsed by workplace show of hands monitored by militant shop stewards.
The need to ballot members before strike action and the banning of secondary picketing both contributed to moderation, as did the withdrawal of the unions’ legal immunity from civil action if they failed to comply. The change was as rapid as it was complete. The “beer and sandwiches” weekly meetings in Downing Street when the unions had made their demands to government were ended. Within a few short years Britain went from having the worst strike record in Europe to achieving the best, and British business began to boom.
After its debut 35 years ago, the Adam Smith Institute never looked back. It was the year when Britain began to change, substantially for the better, and the ASI was happy to be part of that.