11 OCTOBER 1975, Page 8

Advice to the Tories

On coalitions, union power and the control of money

George Gale

It is the identification of parties with interests which provides them with their authority and resilience. The root cause of the Liberal Party's political failure is not its lack of principle, nor even its plethora of principles (although it has both lack and plethora), but its absence of identity with any substantial body of interest, or class.

At the moment, and as far as practical party politics is concerned, we have a two-party system complicated, but not fundamentally disturbed, by the Scottish, Welsh and Ulster factions and the Liberals: and this is the actual context in which the Labour administration and the Conservative opposition conduct their policies, prepare their tactics and strategies, and solicit massive popular support. In that political context, class consciousness, if not class interest, is of the essence.

Many people instinctively, or socially, dislike the notions of class consciousness and class interest and have a marked distaste for the inter-party hostility and socially divisive politics generally inseparable from the rivalry of class-based parties. They consequently seek mollifying policies, practices and rhetoric,' and yearn for an ideal form of government, which is a coalition of 'moderate' men adhering to a natural, gentlemanly and elitist 'centre'. Those who advocate coalition, and those who would be most likely to form a coalition administration or otherwise to benefit from it, will be almost entirely 'middle-class' (which is to say, upper) themselves. In the present British context, a -coalition would be a middle-class conspiracy to persuade a sufficiency of working-class people to join with a presumed majority of the middle or upper class to replace 'socialist' and 'conservative' policies with those expressing the aspirations of an elitist, centrist 'consensus'. But it would shrink from advertising itself as middle-class and elitist and would call itself 'national'.

Were such a coalition to be cobbled together, it would immediately split the Labour Party, for however the Parliamentary Labour Party might divide, the trade unions and the constituency parties would not, in the main, go along with such a coalition. The trade unions would unite in opposition to the coalition, if for no other reason than that the coalition would be seen, rightly or wrongly, as directed against them (for the only political raison d'être of the coalition would be the imposition of a statutory incomes policy, the dismemberment of free collective bargaining, and the 'taking on' of the monopolist power of the big unions by mobilising a presumed 'national' interest against the unions' sectional interests).

There are many Conservatives who view such a scenario with the greatest of pleasure: what better than to divide and possibly destroy the Labour Party; to isolate from all prospect of power the 'extreme' left; to reconcile a divided nation which would, in the fullness of time, reward a Conservative Party, freed from the no longer necessary cumbrance of alliances, with a well-deserved generation of political power? It is a heady prospect and it is not surprising that it should have caused many Conservatives to abandon their political wits.

The presumption behind talk of coalition is that the Labour Party is willing to commit suicide or, alternatively, that it is too stupid to avoid being murdered. Even if such presumption were to prove to be correct (which would be tantamount to the recognition on the part of the 'right' wing of the Labour Party that the party had completed its historic sole and had no further purpose), the consequences of coalition would not necessarily be what the coalitionists fondly suppose them likely to be. It is particularly difficult to see how a coalition could 'defeat' the unions without introducing severe laws, the passing and enforcing of which would further divide rather than reconcile the nation; andthere is no reason to suppose that a coalition would be better able sensibly to legislate and effectively to enforce than was the Heath administration.

But let us presume a 'defeated' trade union movement, and therefore a 'successful' coalition. What would it have done? It would have removed the only effective resistance to the centralised power of government. The economy would be managed (or, more likely, mis-managed) by a government fixing prices and incomes (and therefore, sooner or later, directing labour); and the entire structurt of nationalised welfare, nationalised industries, state subventions, centrally-directed educational policy, nationalised investment policy and so forth, without political —or industrial opposition, would be propped up and preserved until such time as it becomes rotten and collapses inwards upon itself, or congeals and thickens into a politically corrupt and economically inept totalitarian regime.

The possibility that one or other of these

processes or some combination of them both would be presided over by a Conservative Party dominating a coalition administration would seem a scanty reason for the establishment of state socialism, whether that establishment be firm or infirm. (And North Sea oil will not transform whichever kind of ,political economy a coalition would ensure into a thriving, secure and contented national enterprise.) Only Conservatives who are interested in office and in nothing else could contemplate the prospects of coalition with equanimity.

The fact is that coalition, while it could destroy the Labour Party as we know it now, would guarantee the ossification (at least Until its putrefaction) of the socialist state as established by the great Attlee administration and as added to and confirmed by successive Conservative and Labour governments. Apart from the short-lived de-nationalisation of steel, Conservative governments, far from dismantling parts of the Attlee structure, have added so substantially to it that Mr Benn himself has been enabled to set about his work greatly assisted by legislation provided by the Heath administration (until he was brought to heel, not by Tory opposition, but by Mr Wilson removing him from Industry).

Thus a Conservative, addressing himself to the present condition of the country and considering his party's role in it, would do well to put aside all dreams of coalition, and also all thought of tampering with electoral reform, unless his purpose be to secure the socialist state by creating room for the possibility of a Conservative administration to preside over it.

In considering the power, thought by most inside the Conservative Party and by many if not most outside, to be excessive, of the trade unions, the assumption of a greater number of politicians and observers has been that nothing, or nothing much, can be done, short of legislation directly aimed at reducing and controlling that power. Recent experience in the legislative area has not been encouraging. The Labour Party's attempt, when in power, to frame such legislation failed to get off Mrs Castle's drawing-board in the face of determined political resistance by the trade union leaders behind the scenes; and it is well to recall that the Conservative Party's Industrial Relations Act was failing in its chief intent before the National Union of Mineworkers embarked upon its opposition to Mr Heath's statutory incomes policy as applied by the National Coal Board, under government guidance, to its wages claim. The failure of the Industrial Relations Act had as much to do with the opposition of the engineers as with anything else, and had nothing to do with the use of a union's monopoly power. There is a great danger of a double myth growing up in this field.

That the power of the unions is great, and greater than it has been, is evident.

If we ask ourselves 'How have the trade unions come to possess such power, be it actual or potential?', we answer that their power derives in part from their position as monopolists of labour and in part from the .interlocking and interdependent nature of the modern industrial and technological economy: and that their ability to harness their power flows from the discipline of their members and their readiness to accept the orders of their leadership. For example, virtually all industrial production relies upon the supply of electricity; and one or two trade unions, controlling the generation and supply of electricity, could

'pull the plugs out' and close down most of industry.

It may be remarked that similar groups Possess similar theoretical powers. The bankers, for example, by withholding credit, could paralyse the economy; industrialists could lock out their workers; the boards of the nationalised industries possess similar theoretical powers to those of their workers; the government of the day has an even greater Paralysing capacity; and the armed forces have more than ample fire-power to stage a coup.

It will be replied, 'Maybe; but none of these groups has shown the slightest desire, or intention, to use its power in such a fashion and for such a purpose', to which the responsive question is 'But have the trade unions?' And the answer is that they have not (with the possible exception of 1926).

And if we than ask, 'Why is it that it is only, or chiefly, the fear of the exercise of trade union power that causes such concern that men fear that the country is, or is becoming, ungovernable?' we will find, I think, two answers. The first is that the unions have, from time to time, flexed their muscles in ways Which could be construed as challenges to the authority of the government of the day (and certain individual trade unionists have spoken in somewhat revolutionary terms). The second is that the 'middle' class (which nowadays, to all intents and purposes is the upper class, the former upper class having become either bourgeois or impotent) feels that its power, effectively unchallenged since the early days of the industrial revolution, is now being transferred to the 'working' class (which might now be more accurately called the lower class). The second answer is, to my mind, much the weightier, although the first answer IS the one which the 'middle' or upper class prefers to make out to be the chief one.

Predominant power has frequently passed from one class, group or collection of interests to another in this country, and in others, Without revolution and often without also very much in the way of startling constitutional innovation, If, as seems altogether probable, a shift i, 'real power' from the 'middle or Upper to the 'working' or lower class or classes has taken place, or is taking place, political Parties can seek to modify, temper or trim the Shift, or can seek to assist or resist it, and can in any event endeavour to derive the maximum benefit from it, but they can neither pre\7ent nor reverse it; and they will be wasting their time and destroying themselves in the Process should they attempt to do so.

This does not mean that 'nothing can be done about the unions'. It does mean, however, that to attempt to destroy the power of the unions, insofar as that power is based upon and is an expression of a shift of real power from one class or classes to another or others, is to invite self-destruction. For a political Party, in the circumstances of a shift in real Power towards the unions, to embark on a collision course with them is to embark upon suicide. Once this is grasped firmly, like a nettle (or swallowed, as a bitter but necessary therapeutic pill is swallowed) it becomes clearer 'what to do about the unions' because it is at least known what not to do. It is much easier to consider rationally 'what to do about the Unions' if any attempt to destroy them, or their power, is ruled out, for the question can be put differently, as 'How to live With the unions?'

The Labour Party may find it easier to get on with the unions than the Conservative Party, and the Conservative Party, too, may find the capitalists, employers and managers easier than the unions to deal with, but it is not necessarily or inevitably so.

The dominant figure in post-war Conservatism has been R. A. Butler, and it has been under his mandarin influence that the party, in shedding its populism, has inevitably found itself in angry and futile confrontation with the unions. This can be put another way: The Conservative Party needs to trust rather than to distrust the people, if it is to attract sufficient popular electoral support against the grain of class, and this means that the Conservative Party requires leaders who understand the people and to whom the people can respond. But R. A. Butler did not understand them and -probably despised them; Macmillan might well have understood them but chose to be intellectually and politically flippant; Home was temporary; and Heath acted as if he despised, distrusted and even disliked his countrymen. The Conservative Party will not be trusted by the people until it shows signs of trusting them in return; and, in practial terms, the best way to re-open a dialogue of understanding will be through the abandonment by the Conservative leadership of its now almost automatic and instinctive hostility towards the trade unions. I propose no hasty and embarrassing love affair, but rather that hostilities be ceased and the possibility be openly considered that there is no necessary divergence of interest between the Conservative Party and the trade unions.

Now, to revert to the question, 'What to do about the unions?', I note, first, that the power the unions now enjoy has been less sought than thrust upon them. That power derives, essentially, not from the structure and organisation, or the leadership, of the unions (which have been largely unchanged since the time of their great weakness in the aftermath of the General Strike), but from the structure and organisation and ownership of the industries in which they operate. The new power of the trade unions is essentially a consequence of private and (even more so) of public monopolies. The power of the National Union of Mineworkers derives in very great part from the monopoly structure of the National Coal Board; and the same is true for the other public utility industries and steel.

Wenow may see somewhat more clearly how to set about dealing with the unions. Their excessive power could be curbed by destroying the monopolist bases from which they operate, and by removing from government the ability to operate in the field of wages negotiation.

It should be basic Conservative policy to destroy monopoly, whether private or public; to insist that all enterprises, whether private or public, operate at a profit or go to the wall; and to remove government from the field of wage negotiation by leaving the field open to free collective bargaining between the two sides.

The government of the day needs to be protected from trade union resolution so that it cannot give in; and it finds such protection by relinquishing, or having removed from it, the power to negotiate. This power to negotiate means, in the context we are discussing, the power to create money. As long as unions believe that governments are able or have the power to instruct, say, the National Coal Board, 'all right, give them the money', and as long as nationalised boards, told this, go ahead and act accordingly (as they are virtually bound to do) without concerning themselves about their ability to pay, unions will find themselves confronting governments whether they lihe it or not.

The House of Commons can produce a change here by re-establishing its control over the supply of money. We readily understand how mediaeval kings attempted to govern without Parliament by debasing the currency, which is the same as printing money. Modern governments do the same by borrowing, by the creation of credit and a sophisticated printing press. Parliament — the House of Commons — needs to re-assert its sole right to vote funds, 'and to remove from government its ability to tax (or to spend, which come to the same thing) without consent.

Thus nothing revolutionary is being proposed. The House of Commons, initially encouraged by a Conservative government, should claw back its right to be the sole body capable of authorising taxation (and bi-partisan select committees could well be the chosen safeguarding instruments). At the same time, governments must be prevented from borrowing what they cannot raise from taxes: and this means that the Bank of England, as the government's banker, must be removed from the control of the Treasury and made into a statutory body (possibly responsible to a select committee of the House of Commons) charged with seeing that the government of the day lives within its income.

In such a situation a government, faced with the demand from a nationalised industry to underwrite a wage claim would be unable to respond favourably. It would have to say, 'We have not got the money. The House of Commons won't vote us the additional funds which would be required nor will it allow the Bank of England to lend us the cash.' The government's power would be limited: the executive would be checked by the legislature and claimants upon the government's 'generosity' would instead have to plead before the elected Commons of the country, 'please raise taxation so that we may be paid what we want'. It would then be up to the Commons, exercising. its rightful authority in the rightful place, to say Yes or No.

A newly elected Conservative government could reach a compact with the House of Commons along these lines. The House of Commons would itself find its power and its stature and its importance much increased; and it is at the least likely that, were a subsequent Labour government to be returned, it would find the House so jealous of its new privileges and abilities that it would not dream of surrendering them up again.