Chapter One (cont.): Never Had it so Good?
In the Home Counties of Southeast England, Macmillan’s Bedford speech in 1957 may have rung true, but it soon began to have a hollow ring to it, as job insecurity by the mid-sixties was replaced by the return of serious structural unemployment by the mid-seventies. Real wages grew, on average, by fifty per cent between 1951 and 1964. In Coventry, this was partly due to the strength of shop floor bargaining in the motor industry. Until the early 1960s Coventry stood in a different league of union organisation to the biggest motor manufacturers – Morris, Austin, Ford and Vauxhall. The district conditions of Coventry clearly provided a favourable environment for union development, especially the pressing demand for labour, the drive for high output and the relatively slack cost constraints on products before the 1960s. At Ford, Vauxhall and Morris’, the managements determinedly set themselves to restrict the role of unions with considerable success: the case of Herbert’s shows that such dogged resistance was probably not out of the question in Coventry either. However, at Standard management opted positively to promote certain aspects of union organisation in pursuit of wider business goals, while Rootes and Jaguar both found it convenient to abdicate large areas of traditional managerial control and allow the piecework system to act as a rough proxy for works management. In Luton, Cowley and Dagenham, wartime union development was very patchy and the unions faced a long, hard uphill slog in the postwar years before they could achieve critical mass.
Above: The Standard Strike of 1956 as seen by the Coventry Evening Telegraph of 30 April.
Wages were undoubtedly higher in Coventry motor firms than they were elsewhere during the 1950s and 60s. Yet the caricature of the greedy Coventry car worker out for all he could get, who worked half as hard as his counterpart in Cowley and yet was more prone to strike, is at best misleading. It may have become useful to the local and national press and politicians, particularly as a way of explaining the decline of engineering in the late seventies, but it does not match the evidence of what was actually happening on the shop-floors in the period of relative prosperity which preceded it. High wages certainly made motor firms magnets of attraction for semi-skilled workers, but against a background of general shortages of engineering labour there was still intensive competition to get these jobs. They were certainly not accessible to allcomers. There were already very definite bars to the entry of women and Indian workers. Those who got into these firms then climbed a ladder of jobs, moving from firm to firm and playing the paid-up union card to secure higher-paid work. On the other hand there were periodic intakes of green labour cutting across this. For example, in 1971 there was a large-scale intake at Ryton which coincided with a slump in the nearby Hinckley hosiery trade. The result was an influx of woollybacks and knickerstitchers into the plant, though there appears to have been little difficulty in their absorption into the industrial relations traditions of the plant. Previous to this, even in the mid-sixties and even in a firm like Jaguar, half the labour force had less than five years service. The fact that there was a loss of managerial control on the shop-floor, does not mean that the converse was true.
The shop steward system under piecework was fraught with inequity, lack of security, constant haggling and divisiveness. The results of sectional, fragmented bargaining were only partly satisfactory for stewards who recognised the bargaining advantages of piecework but were also critical of the system as dog-eat-dog and in the sometimes vicious way it both drove and divided the workforce. One result of the prolonged piecework system was the chaotic and widespread use of differentials with neither a managerial nor a trade union rationality behind them. The unions were able to disrupt the differentials imposed by the management, but could not impose their own. This meant that workers at the same skill grade had widely differing earnings within the same plant as well as the same job receiving different ratings within different plants. While differentials in the American automobile industry had become highly compressed by the 1960s, they remained very wide in the British motor industry. Moreover there was no incentive or natural tendency within the piecework system to change this, and shop stewards were often bargaining to maintain differentials even among semi-skilled workers. Perhaps because the system had become so complex and confused, workers on individual piecework were ready to tolerate surprisingly wide differentials between similar jobs. In fact, stewards had more influence over the internal plant hierarchy of wages than over the absolute levels of earnings of the workforce as a whole. Neither were the stewards very effective in mitigating job insecurity and instability of earnings, except perhaps at the Standard works.
So, exactly how effective was shop floor bargaining in raising earnings and what impact did it have on the economic performance of the firms concerned? Stewards were generally unable to develop broader strategic goals. Much of their bargaining advantage in the shops derived from astute manipulation of custom and practice, but this should not be confused with unilateral regulation of conditions in the workshops. There is a general correspondence between high wages and high levels of shop-floor bargaining, but there is an unresolved question of cause and effect. Standard was the best organised firm in Coventry when it offered the highest wages during its expansion in the late forties and early fifties, but it was still the best organised when its wages fell back towards the district average under the impact of economic decline. Nor did the onset of powerful shop floor bargaining in the motor inustry nationally result in carworkers outstripping the wages of workers in other manufacturing industries.
Workers in Ford, Morris, Austin and Vauxhall were poorly organised until the late 1950s, whereas in Coventry the trades unions had consolidated their position a decade earlier. However, the extension of union organisation to Cowley, Dagenham and Luton plants did not lead to a divergence of earnings in the motor industry compared with other trades. However, whereas earnings in motors were twenty-one per cent higher than the national industrial average in the period 1949-59, rising to only twenty-four per cent between 1959 and 1963, falling back to sixteen per cent from 1964 to 1968, and recovering only slightly to nineteen per cent in 1968-73. Given that motor industry productivity was above average and that union density was growing in the period 1949-63, more quickly than in the manufacturing sector as a whole, this could be an indicator that shop floor bargaining did not have a significant comparative effect on wages. Even in the mid-sixties, the rise in average hourly earnings in motors (19.2%) was below that for engineering as a whole (20%), and marginally below that for chemicals (19.7%). The case that shop-floor bargaining was a major determinant of motor industry wage levels is a weak one.
Certainly, at least on the surface of early sixties’ society, many British people were at last able to experience the affluence that they felt was their due. By 1963, three out of every four households had a vacuum cleaner, one in three had a fridge, and one in five a washing machine. BBC TV had begun in 1936, though it had been suspended during the war. Now it went from strength to strength. In 1955, commercial television began, and by 1959 new transmitters allowed over ninety per cent of the population to receive pictures, by which time three-quarters of the population had a television set, increasing to four-fifths by 1963. In 1962, J. B. Priestley took a critical look at the state of the new medium:
Television here suffers from a false importance… Outside light entertainment, where rewarding reputations can be made, it is nothing as important as programme controllers and producers imagine it to be. One enquiry had already proved that its political influence has been enormously exaggerated. It can make reputations very quickly, but they are not solid reputations, they are easy-come-easy go… The sheer quantity of attention that television receives is of course formidable, but the quality of that attention is dubious. If it were sharper and more demanding, half the stuff – particularly all those empty interviews – would never be tolerated. Most of us – enjoying a smoke after dinner, are content to stare at programmes we would never leave the house and go fifty yards to see. We watch and listen in an idle dream, passing the time digestion takes. No urgency is communicated. We could smile or yawn at scenes of torture or murder. Very little appearing on that tiny screen in the living-room seems quite real, even less of it excitingly significant. There may be something we all watch till our eyes ache – I for one drop all work when Test Matches are being televised – but out of programmes designed to pass everybody’s time painlessly we cannot expect much that will be either urgent or delightful. Really good television, I believe, will begin when we have to pay for something, on the night, to see it. We shall give it a different kind of attention, and demand value for money.
Some of Priestey’s criticisms began to be addressed by programmers and programme-makers when, in 1964, BBC2 started, providing more high-brow programmes, and in 1969 colour sets were introduced. Watching television soon became the most popular leisure activity in the country, while cinema audiences declined from twenty-seven million in 1950 to under four million in 1970. For those who preferred more physically healthy activities, ten national parks had been designated between 1951 and 1957, protected fom industrial and commercial development.
Despite these outward signs of affluence, there were also warning signs of serious weaknesses in the economy as a whole, but especially in manufacturing industries. These were largely ignored by both Conservative and Labour governments until it was too late. By the mid-sixties there were growing government pressures for engineering employers to put their houses in order and to develop more orderly systems of collective bargaining. The Labour Government which was returned in 1964, led by Harold Wilson, was particularly concerned over the inflationary risks of payment by results. However, even the Coventry District Engineering Employers Association (CDEEA) recognised in 1968 that there were advantages in the piecework systems as they allowed management to have a flexible wage system which could readily and unobtrusively be manipulated in order to improve wage levels to attract or retain labour. They also recognised, however, that it was difficult to manipulate them in a controlled fashion. This was mainly due to the fluctuating increases in output and productivity which persisted in the motor industry, partly due to fluctuating and shifting demands, particularly in Coventry’s luxury car markets.
Certainly, the unions’ near obsessive focus on sectional earnings prevented progress on wider issues such as status, overtime pay, holidays, sick pay, pensions and fringe benefits, in other words on longer-term security for the unionised workforce. In addition, the Coventry Tool Room Agreement of 1941, which was introduced to control poaching by employers of essential skilled workers under wartime conditions, or playing the market by the workers themselves, was still operating throughout the factories, holding down the wages of skilled workers by comparison with the semi-skilled pieceworkers. Toolmakers were simply paid the average wage in each factory, but did not have the same opportunity for additional payments. However, both unions and management found the Toolroom rate useful in having a publicly agreed average wage as a pace-setter and bargaining tool for pieceworkers, averting attention away from peak earnings. When the CDEEA considered terminating the agreement in 1965, the argument that it was a stabilising element and a symptom rather than a cause of wage drift led to its retention by the employers, until it was finally scrapped in 1972, when British Leyland threatened to withdraw from the Federation otherwise. It was then, belatedly accepted that its continuation would hamper the wider restructuring of payment systems in the District and there was strong pressure from the Department of Employment and Productivity to get rid of it as an anti-inflationary measure.
The widespread working of weak piecework systems in Coventry was illogical, inelegant and erratic, leading to what the Employers’ Association itself called a wider derogation of managerial control. For over twenty-five years, management paid almost no attention to the need to control the labour process, to the integration of production engineering and workshop organisation, to the flow and scheduling of production in the workshops and to front-line supervision. The role of the foreman had shrunk in status, not least because he was often paid less than the men he supervised. Management had come to believe that it was not worth wasting resources on training shop-floor supervisors. Ford, who had always operated their day-work system had one supervisor for every twenty workers, while at Rootes it was 1:50 and in the mid-sixties the Coventry average was 1:45. However, by the late sixties employers had come to realise that the haphazard operation of loosely controlled incentives were a poor substitute for a properly managed workplace. However, since they had abdicated their roles for so long, they did not realise the range of managerial tasks that they would have to face in replacing piecework. Changing the workplace culture from one of working by incentive to one of coercive practice based on established and maintained norms required specialist personnel, knowledge and training techniques to be put in place. They lacked these at the outset, and it took another decade for them to acquire them, by which time the Coventry motor and engineering industries had already been decimated in terms of employment and seemed to be on a downward spiral of almost terminal decline.
Predictably, in the short-term, the Coventry car companies found themselves unable to get continued sustained effort without incentives. Stewards ceased to attempt to correct production problems as they occurred, or to chase up materials in short supply, and inferior work was allowed to go down the lines since this no longer had any impact on earnings. However, instead of the focus of bargaining being exclusively on pay, it did shift towards effort, conditions and security of earnings. Extra labour was now welcomed on the sections because it eased labour without reducing earnings. Nevertheless, it was only after several years that management began to adapt to the new tasks of maintaining the flow of materials and the continuity and quality of production. Employers also began to integrate their new payments systems with the restructuring of shop-floor organisation and managerial systems and to follow through on quality control.
The elimination of piecework curbed wide variations in wages, but also opened up new patterns of comparability bargaining. For instance, workers at Chrysler’s Linwood plant became to demand the same wage levels as existed at the Ryton plant near Coventry. At the same time, pay differentials became an intense focus of conflict and disputes, especially among craft unions representing skilled workers like the toolmakers, who now re-emerged on the bargaining scene following the abolition of the CTA. In the early seventies these groups were involved in a string of strikes that were disproportionately costly to the numbers involved as they sought to re-establish themselves in the wage tables and achieve status and bargaining rights. The operation of the Labour Government’s wage restraint policy also made it difficult to resolve conflicts, settle disputes and develop more rational pay structures. Nonetheless, the dominance of semi-skilled and unskilled production workers was eroded, partly by the redistributive effects of government incomes policies and equal pay legislation which brought significant catching up by low-paid workers in society as a whole. At the same time, after 1975, vigorous workplace bargaining by skilled workers finally successfully re-established skill differentials and took them to the top of the wages tree.
Even in the recession-hit Coventry car industry of the mid-to-late 1970s, most employers preferred to enhance the authority of senior shop-stewards and convenors in continuingly close bargaining relationships with management, dealing with more hierarchical and centralised shop-steward organisations rather than seeking to abolish them. As a result the scope of bargaining widened, albeit at the cost of more direct shop-floor democracy. This, together with the general atmosphere of economic and political crisis, has helped to channel and control sectional militancy. However, throughout the period from 1952 to 1972, sectional bargaining was always more cooperative and less confrontational than was often portrayed in the media, both at the time and in the period of crises which followed. However, such bargaining techniques were primarily opportunistic, weak on co-ordination and longer-term strategy, and paid little attention to many broader aspects of workers’ lives. It also depended, in most cases, on a weakness of management which could not persist if the industry was to survive in the competitive export market of the last quarter of the century.
Two parties shared between them the government of Britain in the thirty years that followed the second world war. Both had as a prime aim the restoration and expansion of the British economy by restoring and expanding industry and exports. Perhaps we should discount the period of the post-war Labour governments of 1945-51, given the handicaps it faced both in terms of wartime debts and continuing foreign and imperial obligations. Nevertheless, by 1977 both parties had had multiple opportunities in national government to create the conditions for growth in Britain. Both failed, and by the end of the seventies the downward spiral of the British economy was accelerating out of control. The country seemed to be in terminal economic and social decline. In the debate about the conduct of public affairs throughout these years, the focus was on what the government of the day was doing, and on whether what it was doing was right or wrong for the economy. This shows how government policy and action had become central to the management and direction of the economy, even though many industrialists deplored or sought to evade this development.
P. Calvocoressi, writing at the end of this period and just before the accession of Margaret Thatcher, and taking a long view of the British economy to 1975, saw the failure of successive governments as the result of their unwillingness to dismantle the mixed economy of private and public sectors:
Every government acted within the established system. None tried radically to change it. This system was and remained a capitalist system. Labour governments made significant changes in emphasis with the system by acts of nationalisation which diminished the area of private capitalism and extended the public sector, but there had long been these two sectors and both were and remained capitalist in structure and operation. The mixed economy… was mixed in different proportions… All governments accepted an obligation to contribute positively to the prosperity of both sectors… governments provided money or facilitated credit, and with this money private and nationalised businesses would invest, modernise and grow. At the same time… governments of both colours also saw it as part of their job to intervene in economic affairs to keep wages in check, whether by bargaining with the unions or by subsidising the cost of living by law… Government intervention of this nature was inflationary… A modern democratic capitalist economy is based on inflation, and in these years the wherewithal for recovery and expansion was provided to a significant degree by government…
Failures in economic policy led to criticism not only of the policies of successive governments, but also of the role of Government in the economy. Whilst there had been arguments within governments over the right means to stimulate the mixed capitalist economy, no-one had sought to deny that this was governments ought to be doing. Still less had they questioned the existence of the mixed economy. However, the failure of this economy to expand led to serious questions about its viability. In the sixties, before Bogdanor and Skidelsky wrote The Age of Affluence in 1970, it was usual to look back at the fifties as an age of prosperity and achievement. This was certainly the verdict of the electorate in 1959 who returned a Conservative Government to power for a third term in succession, with a handsome majority. However, by the seventies it was being reflected on by the above historians as:
… an age of illusion, of missed opportunities, with Macmillan as the magician whose wonderful act kept us too long distanced from reality… what has altered the verdict on the 1950s has been the experience of the troubles of the 1960s, which stem in part at least from the neglect of the earlier decade. Already by 1964 the appeal of the slogan ’Thirteen Wasted Years’ was strong enough to give Labour a tiny minority; in the years following it has been confirmed almost as the conventional wisdom… perhaps the period of Conservative rule will be looked upon as the period of quiet before the storm, rather like the Edwardian age which in many ways it resembles. In that case its tranquility will come to be valued more highly than its omissions.
In his book The Affluent Society (1958), J K Galbraith had intended to sketch an outline of a developed society which had in large part solved the problem of production and could therefore concentrate its energies on other things, including the more even and fairer distribution of the wealth it created. The class struggle in such a society would be obselete and so also the ideologies which propped it up. Politics would no longer be about general choices but about incremental changes. Uncritical transference of Galbraith’s thesis into the British context helped obscure the fact that Britain had not, in fact, solved its production problems. While the optimism of the early 1950s was understandable, the production boom at that time was largely built on random, temporary circumstances. From 1955, the British was bedevilled by a series of sterling crises which gradually forced the politicians to pay attention to difficult structural problems they wished to avoid. From the early seventies onwards it became possible to see that the years 1952-64 were neither a period of continuous and uninterrupted expansion as the Conservatives pretended, nor the Thirteen Wasted Years of Labour propaganda.
As the Kennedy’s Secretary of State, Dean Acheson, commented in 1962, Britain had lost its empire and now needed to find its role. Macmillan was slow to see that that role was not to be found in its special relationship with the United States, which, without the Empire, was bound to become more and more unequal, if there was ever any real equity in it, but in relation to the changes occuring within Europe. In economics, as in foreign policy, consensus reigned supreme, signifying the common political ground over the mixed economy and the Welfare State. It humanised and civilised the adversarial political system in Britain and ensured its emancipation from the ghosts of the past; unfortunately, as Bogdanor and Skidelsky pointed out, it also imposed a moratorium on the raising of new and vital issues, because it was based on traditional assumptions about Britain’s political and economic role in the world. The need to make real political, maco-economic choices was submerged under a generalised commitment to the objective of economic growth, without an effective strategy with which to bring this about. The Conservatives became convinced that…
… capitalism could provide affluence for the working class while at the same time preserving the gains of the well-to-do… Consensus was the natural product of a lessening class antagonism, which in turn reflected a seeming trend towards embourgeoisement… Indeed, one of the striking characteristics of the 1950s was the absence of any major intellectual challenge to the dominant political assumptions…
Certainly, there was no-one of George Orwell’s stature to provide such a challenge, following his death in 1950. Writing in the year after Calvocoressi, on the cusp of the Thatcher era, Sked and Cook agreed that, on the surface, the thirteen years of Tory rule appear to have been successful ones. Great Britain still behaved as a world power internationally, while at home people experienced the affluent society and were told that they had never had it so good. They felt that they had earned the right to take things easy for a while and to take full advantage of Mr Macmillan’s hire-purchase society. In reality, as far as fiscal and economic policy was concerned, the Tories did little with their long period in power. Cushioned by the turn in the terms and balance of trade, largely the achievement of, if anyone, Stafford Cripps in the previous Labour government, they abolished rationing, reduced taxes and manipulated budgets, but they gave little impression of knowing how the economy really worked. Scant attention was paid to sluggish growth or to the long-term challenge posed by the resurgent economies of West Germany and Japan. Industrial relations were treated with an us and them managerial attitude and any thought given to the inflationary problems created by prosperity was little and late. Most of the time their energy was devoted, as in the Suez Crisis of 1956, to maintaining Britain as a world power whatever the cost to the economy. Sked and Cook concluded that:
Tory economic complacency ensured that the necessary economic growth would never be generated. Not enough money was channelled into key industries; stop-go policies undermined the confidence of industry to invest in the long-term; too much money was allowed to be exported abroad; and too much money was spent on defence… With the economic crises of the early 1960s… it began to be apparent that Tory affluence would soon come to and end…
Andrew James 
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