Industrial relations, 1939-79 and the reasons for their breakdown in 1960s and 1970

Industrial Relations During WWII

• WWII transformed British industrial relations.

• Britain moved from boom–bust unemployment to wartime full employment, later adopted as a post‑war commitment by both Labour and Conservatives.

• Full employment strengthened trade union bargaining power, contributing to assertive union action in the 1960s–70s.

• Unions were integrated into government decision‑making:

  • Most famous example: Ernest Bevin, TGWU leader, appointed Minister for Labour (1940).

• Wartime cooperation created a culture of consensus and corporatism that continued into the 1950s–60s.

Post‑War Consensus & Corporatism (1945–60s)

Consensus Politics

• Unions worked with government and employers in wage‑setting and industrial policy.

• Labour and Conservative governments avoided making industrial relations a partisan issue.

• Union leaders sat on boards of nationalised industries (e.g., Bank of England).

B. Wage Restraint & Inflation

• Governments hoped unions would voluntarily limit wage demands.

• This worked until inflation spiked in the early 1950s.

• Thereafter, governments faced a dilemma:

• Keep unions happy → risk inflation

• Impose controls → risk industrial conflict

C. Breakdown of Cooperation

• From the late 1960s, relations became increasingly antagonistic.

• Governments tried various incomes policies and controls, none successful.

• Result:

• Fall of Heath’s government (1974)

• Contribution to fall of Callaghan’s government (1979)

Harold Macmillan & Corporatism (1957–63)

Macmillan’s Beliefs

• Moderate, aristocratic Conservative; committed to:

  • Full employment

  • Mixed economy

  • One‑nation Conservatism

• Shaped by memories of 1930s unemployment in Stockton‑on‑Tees.

• Benefited from favourable global conditions; era seen as one of affluence.

• Famous line (1957): “Most of our people have never had it so good.”

• But warned that restraint and commonsense were needed.

Corporatist Experiments (1962)

Macmillan attempted to halt economic decline by uniting labour, management, and government.

NEDDY (National Economic Development Council & Office)

• Forum for unions and management to discuss long‑term economic development.

• No legal powers; relied on voluntary cooperation.

NICKY (National Incomes Commission)

• Advisory body of economists and experts.

• Gave guidance on “reasonable” pay rises.

• Unions largely ignored NICKY due to:

• Member pressure for higher wages

• Rising consumerism in the 1960s

• Desire for improved living standards

Long‑Term Trend (1939–79)

• WWII → cooperation and full employment → stronger unions.

• 1950s–60s → corporatism and consensus.

• Late 1960s–70s → rising inflation, rising strikes, breakdown of consensus.

• 1974 → Heath falls after miners’ strike.

• 1979 → Callaghan falls after Winter of Discontent.

• By 1979, union–government relations were deeply antagonistic, paving the way for Thatcher’s anti‑union reforms.