To what extent the ‘Winter of Discontent’ of 1978~79 influenced the ‘New Labour’ reforms from 1995 to 2001?
Introduction
The New Labour has occupied the position of UK PM from 1997 to 2010, led by Tony Blair and Gordon Brown. The advent of New Labour government was after 17 years of consecutive Thatcherite Conservative rule under Margret Thatcher and John Major. The advent of Margret Thatcher was preceded by Wilson-Callaghan Labour governments of 1974~1979. The sea change occurred between the two governments occurred at the backdrop of the Winter of Discontent.
The Winter of Discontent was a series of trade union strikes occurred in the winter of 1978~79. It was precisely during this turbulent winter the 1979 election empowering Thatcher was called. The crisis also marked the ending of the decades-long Old Labour policies. Therefore, the Winter of Discontent was a watershed moment, a hook from which Old Labour policies could be summarized and Thatcherite policies found roots.
The author mostly limits the investigation of New Labour into its earliest years until 2003, because the outbreak of the Iraq War of 2003, and the 20078 global financial crisis stopped New Labour from pushing through its proposed agenda. (Blair legacy) The 19972003 period was the initial years of New Labour, when policy course sticked to original plans. In terms of Old Labour, the 1974~79 Wilson-Callaghan government will be focused upon, as it directly leaded to the Winter of Discontent and fall of Old Labour, though the 1st Wilson government of 1960s may be referenced when there’s legacy reaching the Winter of Discontent.
The role of the Winter of Discontent on the demise of Old Labour and the birth of New Labour may be categorized as an influence: the Winter of Discontent influenced the policies, party structures and public image of New Labour.
The policy influence of the Winter of Discontent over New Labour
The Winter of Discontent saw major Old Labour policy failures. The New Labour, aware of the policy failures of Old Labour, undertook different policies to the 1970s.
The Winter of Discontent was the outbreak of serious policy problems of Old Labour. The socio-economic principle of Old Labour was the “post-war consensus”, a vague concept generally demanding cooperations among various interest groups to combat challenges, in this case, the stagflation economic crisis. The label of “socio-economic” suggests that social and economic policies were integrated together.
Under this principle, the iconic policy for Wilson-Callaghan government was the Social Contract, whose failure was fully unravelled in the Winter of Discontent. The Social Contract was ‘a deal in which the unions would support the Government’s attempts to fight inflation by curbing their wage demands [in return for] favourable industrial policy, unemployment relief and structural modernization’. (Social Contrick pp.639) When the principles came into practice, the Wilson government pushed through implementations. On the government side, the spirit of workplace cooperation was honoured by the newly-established Advisory, Conciliation, and Arbitration Service; the Health and Safety at Work Act pushed through protection for average workers, in place of the anti-union Industrial Relations Act; A price and rent freeze were imposed and food subsidies were introduced. (Old, New Labour pp.77) However, the implementation of the Social Contract didn’t bring economic stability. Combined with the collapse of the Bretton Woods system in early 1970s, two economic crisis broke out: the first was a collapse of pound exchange rate and the second was a rampant inflation surged to 26.9% in August 1975.
With this background, wage restraints were put forward. a rigid, flat-rate increase of £6 a week was announced. The economic crisis led to the resignation of Wilson, and Callaghan took office, who has decisively adopted monetarist goal of decreasing the inflation. In his inauguration speech, Callaghan stated: “We used to think that you could spend your way out of a recession, and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists”. His solution was stricter wage restraint. In 1976, a guideline of 5% with a floor of £2.50 and a ceiling of £4 was adopted; In 1977, a guideline of 10% was set, and in 1978, the most extreme version of the wage restraint was adopted: a 5% one. Upon its announcement, the elite unionists were already warning that this policy can never be enforced upon rank-and-file members. (myth, pp.59) By this point, real wages for average workers were significantly declining, “suffered the biggest cut in [the] standard of living since before the industrial revolution”. (myth, pp.205) The lack of effective supervision over actual wages led to the collapse of guideline restrictions in private sector, further angering the public sector workers (Old New Labour, pp.88), later greatest supporters of the Winter of Discontent. Labour was determined in maintaining it, however. In May 1978, he claimed “We have to hold the line on pay or the government will fall.” (Myth, pp.208). The result of this 5% wage restraint was the outbreak of the Winter of Discontent.
The label of “monetarist-constrained Keynesianism” (Old Labour, New Labour pp.67) revealed the awkward situation of Callaghan’s economic policies: he hoped to cut inflation, a goal usually achieved by neo-liberalist reforms, but his policies relied on average workers willingly cut their own wages. The weird mixture led to a two-way breakdown of Old Labour: unions felt they’re neglected and suppressed, and went on to wage the Winter of Discontent, while the Labour and general public thought unions were overpowered, and went on to implement anti-union reforms.
On the other hand, one must be cautious in the claims of completely failed Callaghan policies. The inflation decreased significantly through the wage restraint policies, from 26.9% in August 1975 to 7.8% in May 1978 (just before the Winter of Discontent) (Statista), while keeping the unemployment rate relatively stable between 5% to 6%, therefore effectively achieving the goals of Old Labour. If compared to the rapid surge of both inflation rate (to 21% at 1981) and unemployment rate (to 11.9% in August 1984) during Thatcherite reform, Old Labour economics policies are surprisingly successful.
Besides long-term policy mistakes, the Old Labour’s crisis management of the Winter of Discontent is a major policy failure. In terms of public relations policies, the Callaghan cabinet did almost nothing to react to the accusations by tabloid media and Thatcherite Tories. (add historian) In terms of political response, the only fruit of appeasing unions was a union-party “Concordat” including no obvious progress towards the end of strikes (1pagedocument): Even cabinet members refused to disclose details on this “face-saving” document (Thatcherite, pp.11) The governmental response to the Winter of Discontent was disastrous. The Old Labour was simply unable to react properly to the Winter of Discontent, for a proper action demanded the dismantlement of itself.
The New Labour policies set its course different from the Old Labour. For reasons discussed below, New Labour politicians were reluctant to mention “historical” influence upon them. Still, legacies undoubtedly hinged on in New Labour.
In terms of principles, a general socio-economic policy like the Social Contract simply no longer exists. On economics, the New Labour relied on fiscal stability to fight inflation instead of unions. When it came to practice, New Labour gave Bank of England policy-making independence, and established a Monetary Policy Committee, consisting of central bank officials, to ensure low inflation. (Keynesian Economists pp.821) Indeed, the New Labour controlled inflation rate stably under 5%. (Statistia) Surprisingly, George Brown, then Chancellor, claimed the goal of New Labour was to achieve both low unemployment and low inflation rate, “contrary to pre-1979 policies” (Keynesian Economists pp.820) The very same goals have also been set and met by Old Labour. The difference is: If the Old Labour pursued low inflation unwillingly by relying on unions, the New Labour embraced monetarist economics to bring down inflation.
The union policies of New Labour was significantly different from the union-centrality policies of Old Labour. In the 1997 manifesto, the adoption of Thatcherite anti-unionism was stated: “Key elements of the 1980s trade union reforms to stay”. In practice, the powerlessness of unions was indicated by decrease of strikes: The average number of workplace stoppages declined from 2400 per year during Wilson-Callaghan years to 154 per year during New Labour years. (New unions, pp.373) Of course, certain union-friendly policies were made, notably the Warwick agreement, in which New Labour agreed over 100 union pledges, for instance repeal different treatments of state and private employees in public sector. However, the degree of union-appealing policies were weaker than that of Old Labour: For instance, New Labour pledge to raise protection for strikers but not repealing the anti-strike Thatcherite laws. (New unions, pp.375) In general, New Labour union policies set its course significantly from Old Labour union-favouring policies, but was friendlier towards union than Thatcherite openly hostile policies.
In terms of crisis management, the New Labour is far more successful. This can be found in a simple fact: No major domestic crisis struck New Labour in public memory. The absence of crisis proved the success of New Labour’s tackling of public images, setting itself drastically from the Old Labour troubled with endless crisis. New Labour invested into public image through significantly expanding the media and press operation of Number 10. (New Labour, Old Labour pp. 313). The Monfield report of 1997 outlined that “all major interviews and media appearances, both print and broadcast, should be agreed with the No. 10 Press Office before any commitments are entered into.”. (Governing New Labour, pp.99) When it came into figures, the COI (Clearing house for the purchasing of government advertising) statistics revealed a significant increase in New Labour advertising expenditure, from £ 110.8m in 19978 to £173.4m in 19989, to £295.4m in 2000~1. (Governing New Labour, pp.91) From both policy guidelines and actual conducts, the New Labour strongly emphasized public image management, setting itself from the media-hostile Old Labour.
The connections between the Old Labour and New Labour must be deemed as dubious, however. Because New Labour rendered Old Labour as a history to be discarded, the New Labour policymakers seldom made reference to Old Labour when describing policies. This neglect would be elaborated below. Therefore, the connections made in the essay remained dubious, but the connections could still be made because a party cannot cut themselves completely from the past.
The Structural Change brought by the Winter of Discontent and its influence upon New Labour
The Winter of Discontent significantly catalyzed the structural Party-Union “mutual divorce”, necessitating New Labour reforms.
The Union-Party familyhood was fundamental to the Old Labour Party. Founded by unions and originally named “Labour Representation Committee”, the Party had a union origin. Inside the Labour Party machine, the unions were well represented. Famously, the unions “block vote” constitutes about 6 million votes of 7 million total votes at the Annual Party Conference, therefore holding major influence inside the party. (p.19 Family) Powers came with duties. Financially, unions contributed 78 percent of Labour’s finances during the 1970s (not counting election years). (p.365 New unions) Unions were the solid base for Labour Party’s elections. According to Quinn, 45% of Labour electorate in 1974 February election was unionists or union-affiliated. (pp.364 New Labour union) With this backdrop, the Old Labour put unions at centre of their economic policies, creating the Social Contract.
The initial neo-liberalized policies of Old Labour resulted in the decline of the Union-Party relationship, and tensions fully broke out at the Winter of Discontent. On the party side, the Labour MPs, led by Wilson and Callaghan, tried to subdue unions. This could be shown by their wage restraint policies, which unions were reluctant to accept. (the Winter of Discontent, p.207) Hostile attitudes were undertaken by Party leadership. Mudge evaluated Callaghan government planted “a widespread public understanding … that inflation was union-driven”. (Leftism reinvented, pp.338) The Party leadership attributed the Winter of Discontent as a major union mistake. After electoral defeat, James Callaghan stated during dinners with Party seniors that “the trade unions did it. People could not forget and would not forgive what they had to suffer from them last winter.” (Old New Labour Pp.99)
On the union side, the union rank-and-file members were radicalized by Labour governmental policies during the 1970s. The decade also saw the rise of union participation of minority workers, namely females and migrant workers. Female membership rose by 73%, while male membership only rose by 19.3%. These people were underrepresented by the established union and party institutions, constituting a force to be reckon with. (the myth book, p.32) The British far-lefts, inspired by a series of Western union success and well aware of the growing grassroot anti-establishment sentiments, stepped in to help organize the grassroot against the moderate Labour establishment. Communists constantly attacked over issues of wage restraints. In 1977, one in eleven members of Trade Union Congress are Communist Party members. (Old new Labour, pp.94) The far-left/grassroot anti-establishment sentiments would break out during the Winter of Discontent. The Winter of Discontent was a moment of mutual divorce between the Party and the Union.
The Party-union mutual divorce at the Winter of Discontent left the Labour Party in an unelectable position. In 1979, there was an 11 per cent swing to the Conservatives amongst skilled manual workers, the core of unions, and a 7 per cent swing amongst trade union members. (the Labour Party in Crisis pp.10) The unions, as a crucial voting bank, also suffered significantly declines: From 1979~97 union memberships dropped by 44.3%, and union density declined from over 50% to 30%. (New unionism pp.369) The vote shares of Labour was lowest in 1983 (Leftism reinvented, pp.341). The steady growth of Labour vote after 1983 was accompanied by neo-liberalizing the party, famously through the Policy Review. The fact further proved the mutual divorce necessitated New Labour reforms.
1990s saw rapid reforms into New Labour, and in it union powers were significantly weakened: To name a few, the block votes of unions were taken away; the vote share of union members decreased from 90% to 50%; union-affiliated members decreased from 5.3 to 2.7 million members, etc. (New Union, pp.374)
It must be noted that New Labour weren’t completely anti-union. 50% of votes at Labour Party Conference were still by unions. Furthermore, New Labour was still financially dependent upon unions, which contributed to 64.4% of all donations New Labour received from 2001 to 2009, when donations contributed to 42.4% of Labour money during election years. The union-party relationship deteriorated from “familyhood” to “good friend”, not to hostility.
The relationship between party-union divorce and transformation into New Labour is a debated topic. In Leftism Reinvented, Stephanie L. Mudge quoted Howell for the theory of “mutual divorce” of the party and unions, when the decline of organized labour forced the Labour Party into New Labour reforms. This classic theory was challenged by Mudge. She argued that the union-party divorce was the result of neo-liberalization instead of vice versa. (p310) A fact supporting it is the party-union entity was the “organized labour”. (p310) The decline of unity was before economic neo-liberalization, as we’ve seen in struggles of Wilson-Callaghan governments, however its full outbreak was during the Winter of Discontent.
Therefore, we may paint a more complex image here: the two events of neo-liberalization and mutual divorce isn’t simply a cause-and-effect but an evolving entity. The Winter of Discontent, a moment of “mutual divorce”, was both of the impact of initial neo-liberalization and of the beginnings of a period of intentional neo-liberalization leading to New Labour. The Winter of Discontent was a direct result of fracturing union-party relationship, and it also strengthen the divorce, leading to estranged union-party relationship of New Labour.
The image of Winter of Discontent
The Winter of Discontent also leaves a profound impact in public image. As we would illustrate, there was a myth evolving around the Winter of Discontent, and it mattered because it left a significant impact on the strikes themselves and New Labour. As C. S. Hay wrote, ‘the Winter of Discontent unfolded in the way in which it did precisely because of the myths in and through which it was lived, experienced, and responded to at the time.’ In the widespread myth constructed by Thatcherism, The Winter of Discontent symbolized a failed Old Labour. Based on a political consensual image of a failed, unelectable Old Labour, the New Labour renovations were made.
The construction of the myth of the Winter of Discontent started in real time with the strikes unfolded, and it served a political purpose. Before the strikes broke out, Thatcher was already planning for a myth-construction project to get Tory in power and destroy Old Labour. In a Thatcherite report of 1977, it was outlined to “Drag every skeleton out of the union cupboard, linking it to Labour […] The aim should be to make the Labour Right wing and the union leadership close ranks, while the rift between the latter and their rank-and-file begins to open.” The goal was also simple: “A landslide … represent an explicit rejection of socialism and the Labour-trades unions axis” and removal of “negative factors of trade unions”. Clearly, Thatcherites were eager to use media to undermine Labour party structure and Labour public image. Their employment of a media firm, Saatchi & Saatchi, (The myth, pp.19), and their alliance with The Sun, demonstrated Thatcherite devotion into the media project. Important tabloid media, the Sun, the Daily Mail, all came to support Thatcherite course. By 1979, 25% of the British population was reading the Sun, while 11% of the population was reading the Daily Mail (crisis, pp.116) The Winter of Discontent therefore became the perfect storm for Thatcherites to discredit Old Labour and trade unions.
The construction of the myth begins with the very name of the Winter of Discontent. This is a literary metaphor, first adopted by the exemplar tabloid media, The Sun. Its origin was the first sentence of Richard III, in which the protagonist, a villain, states “Now is the winter of our discontent”. There’s a natural negative impressions attribute to this term. Starting from the prerogative term, a mythical story of Old Labour’s failed the nation has been constructed. The press headlines could indicate how the media tried to paint a picture: A classic symbol of the Winter of Discontent is the gravedigger’s strike, to which the Daily Mail reported “THEY WON’T EVEN LET US BURY OUR DEAD” at 1 Feb 1979. The title drew a line between the public and union members, and painted an aggressive villain picture of unions. Following suit, The Daily Mail coined “TARGET FOR TODAY – SICK CHILDREN” at 2 Feb 1979, while The Sun wrote “1000 Old Could Die Every Day” – depicting unions threatening lives of the elderly and the children. After inflaming anti-union sentiments, the media pointed to Jim Callaghan and Labour Party: “‘Crisis, what Crisis?’ seemed to be Whitehall’s nonchalant response to the Premier’s movements. … he can afford to make the most of his junket in the tropics.” This classic article depicted an incompetent PM on holiday when the nation was on crisis. This myth certainly was established. (Destructive Construction) Researchers overwhelmingly reported strong negative attitudes towards the unions and Old Labour, stating “Britain had been collapsing in the 1970s; Labour and the unions were to blame; and Thatcher was the saviour.” (myth, pp.9)
After the successful establishment of a failed Labour government in the election campaign, Thatcherites constantly invoked the memory of the Winter of Discontent to gain public support. At the 1985 Conservative Party Conference, Margret Thatcher herself made reference to this story to her audience during her speech:
Do you remember the Labour Britain of 1979? It was a Britain — in which union leaders held their members and our country to ransom; — A Britain that still went to international conferences but was no longer taken seriously; — A Britain that was known as the sick man of Europe; — And which spoke the language of compassion but which suffered the winter of discontent.
The Thatcherite, drew the Winter of Discontent as the prime example of their story of Old Labour failing the nation. As James Thomas observed, this construction gave Thatcherism a “silent majority” in discrediting all alternatives. (the myth, Pp.209)
Once the Thatcherite version of myth was widely accepted by public, there was no room for “Old” Labour anymore. To make themselves “electable”, New Labour had to accept the myth, and denounce their past. New Labour intentionally avoids mentioning of its past. The implication of it is the Old Labour is perceived as failures which needed to be concealed. (Old Labour, New Labour, p308) In the 1997 Labour manifesto, the foundational piece of New Labour, it was simply declared: “new Labour is new”. In his biography, Tony Blair made little reference to Old Labour, and when mentioning, constantly referred to the good old Attlee years. A rare expression for his attitude towards the blurred image of Old Labour was:
I had realised the Labour problem was self-made and self-induced. We were not in touch with the modern world. … The days of the old trade unionists were passing, along with many of the industries that they dominated – coal, steel, shipbuilding, textiles. The new industries – in particular those driven by emerging technologies, and modern service industries – were not attracted by the trade union mixture of industrial agitation and politics. … They didn’t feel: change or die. (Blair, pp.96~97)
The story of a “out-dated” Old Labour flowed naturally into the rhetoric of Thatcherism, when Thatcher came out to save Britain from Old Labour disasters like the Winter of Discontent. Tony Blair certainly accepted that Thatcher made much-needed reform. In his dubious words, New Labour was “a progressive alternative to Conservative rule”, instead of a successor of the Old Labour Party. (Blair, pp.15)
From those clues, a conclusion could be reached that the “newness” of New Labour was based upon a rejection of its past, therefore an adoption of Thatcherite myths dominant in British public.
Conclusion
Reviewing upon the previous sections, a general picture may be depicted: The Winter of Discontent was a major policy failure of the Old Labour, therefore inspiring New Labour to reflect and take on generally different policies; Old Labour policies also led to a point of “mutual divorce” between unions and the party. The divorce with unions, central to Old Labour party structure, necessitated reforms into New Labour; The Winter of Discontent formed as a basis for a Thatcherite myth of unelectable Old Labour, necessitating Labour to rebrand itself into New Labour.
Therefore, it can be concluded that the Winter of Discontent directly influenced New Labour, in terms of policies and public image; while the structural reforms into New Labour were influenced by and influencing the Winter of Discontent.