Curbing union power
And thus the whirligig of time brings in its revenges. Connoisseurs of this phenomenon should be enjoying themselves at the moment. In the winter of 1973-4 the Labour party cynically exploited Mr Heath's difficulties (which were in part, admittedly, of his own making). Opposition politicians fell over one another to egg on the miners. Now the Labour Government that succeeded Mr Heath is faced with an industrial rebellion which may yet dwarf the miners' strike and the three-day week and may destroy this government as completely as the last was destroyed. It is peculiarly appropriate that this should be happening under the prime ministership of Mr Callaghan, the man who ruthlessly pulled the rug from under his colleagues Mr Wilson and Mrs Castle in 1969, wrecking the 'In place of strife' proposals and with them a rare hope of stabilising the union question.
Still, Schadenfreude is a limited emotion. Mrs Thatcher is right not to gloat but to ask constructively what can be done. She calls for a 'great debate' on the central question of 'how the unions use their power'. This could perhaps have been phrased more felicitously because how the unions use their power is all too obvious. More interesting are the questions of how the unions came by their power, what its nature is, and how it can be curbed. The special strength of British unions has a long history. A line of skilful politicians from Disraeli to Mr Michael Foot has found it expedient to grant the trade unions wider and wider powers or, more accurately, immunities. The unions have been progressively exempted from all the normal stringencies of the law. They have none of the liabilities in tort that all other corporate bodies have. The agreements or 'contracts' they enter into are not contracts at all because they can be broken by the unions at will and with impunity. Now the unions have immunities in criminal law as well; the 1974 Act granted very wide powers to pickets. The comparison with the medieval church, a powerful institution outside the law, is all too accurate.
The effect of all this is not what might have been hoped for by early unionists. Much is talked of the 'power' of the unions over the nation, with the implication that this power is in large measure political. It is true that through its connection with the Labour party the TUC appears to have
such power, but appearance is deceptive. It cannot be stressed too often that the power which the unions enjoy is essentially industrial. The paradoxical result of their stranglehold on industry has been not Left revolution but the steady impoverishment, in comparative terms, of the 'British working class.
This is the one great and incontrovertible achievement of our unions since the war. That suggests another great debate on whether unions are inherently dangerous and damaging institutions. There are some who will suggest that they are cartels, and that their labour monopoly is no more tolerable in a free economy than a business monopoly. To which a proponent of classical, liberal economics might retort that it is not trade unionism which distorts the labour market but unemployment pay. In any case, there is the example of West Germany to show that strong and effective trade unionism can perform its proper function, the betterment of its members in real terms within an expanding economy. The real problem with British unions is not their greed — anyone may be called 'greedy' who wants a better standard of life — but their myopic obstructiveness taking the form of restrictive practices and low productivity.
Can anything be done? The despairing might think not but would be wrong. There are short-term remedies, which Mrs Thatcher has hinted at. There is no obvious reason why social security payments should be made to the families of unofficial strikers. There is no reason at all why income tax rebates should be immediately granted to strikers. If the Tories are wise they will deal with this in a comprehensive reform of the tax and welfare systems which would introduce negative income tax and self-assessment. Beyond that lies a harder question. It will be very difficult to reform the unions by legislation, much though this is needed. What must be done, what Mrs Thatcher and her colleagues must concentrate their minds upon, is to limit the ability of the unions to cause inflation. Statutory incomes policies have been tried and have failed. An informal 'voluntary' pay policy is falling apart in front of our eyes. It is for the government to guard the currency: the unions must then learn, however painful the lesson is, that there can be no ceaseless pay rises if there is no money to pay them with. _
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