Why Thatcherism Happened

A Vital Lesson: 1974 +1977 = 1979

This is the twentieth anniversary of the most significant general election since 1945. Twenty years ago a Tory Government that was trying to bring about a fundamental measure of structural socialist reform was defeated. A Labour Government was elected. For the next five years that Labour Government (led by Wilson, Callaghan and Michael Foot) conducted itself as a socialist protest movement in power.

The Labour Government of 1974/9 enacted a great body of socialist-sounding legislation. But it did not tackle the central problem—the problem which the preceding Heath Government had tried to tackle. It did not confront the powerful Labour movement of the time with the demand that it should assume a responsibility of economic control commensurate with its power in the economy. It showed no appreciation of the likelihood that, if the great economic power of labour continued to be exercised negatively after a positive measure of workers’ control had been rejected, a revulsion of feeling would set in, not least amongst the rank and file workers, which would subvert the power of labour.

Can anybody now seriously deny that the position of the working class—and the position of the miners in particular— would be much better than it is if Heath had won the 1974 election? Within ten years of that election many miners realised that bringing down the Heath Government was a blow they had struck against themselves. But, twenty years later, the truth about the class struggle in the seventies has still not registered in the culture of the labour movement, or in the minds of its leaders.

The only serious measure of socialist structural reform proposed during the lifetime of the last Labour Government was the proposal for workers’ control made in the Bullock Report in 1977. That proposal was given short shrift by labour leaders of the right, left, and centre, with only individual exceptions.

The Institute for Workers’ Control might have made a serious fight of it, if it had itself been serious about workers’ control in any practicable form. Unfortunately, the Institute under the leadership of Ken Coates had reduced “workers’ control” to a Utopian shibboleth without practical meaning, and it did untold damage in the Bullock debate. And it was assisted by Neil Kinnock, a politician on the make who at that juncture reckoned that ultra-leftist opposition to Bullock would be a good career move.

Heath was brought down by socialist militancy against a measure which would have been entirely in the working class interest. The following year he was ousted from the Tory leadership by Margaret Thatcher standing on a programme of raw capitalist individualism—the programme of Manchester liberalism of the mid-19th century. And then, with Thatcher in the wings ready to take over, the leadership of the Labour movement rejected a fundamental measure of socialist structural reform for the second time in five years. And this time it was not a Tory measure, but a proposal made possible by a Labour Government, even though not actually advocated by it. And that was the beginning of the end.

We can understand the difficulty even thoughtful socialists might have had with Heath’s reform. The idea of a Tory’ Government enacting a socialist measure was inconceivable to a movement moulded on Bevanite rhetoric: or, if conceivable, it would have seemed wrong. The attitude of Ernest Bevin, who saw it as a positive advantage to implicate the Tories in socialist reform in order to inhibit their future opposition, was lost in the Bevanite upsurge from the fifties to the seventies. But facts are facts. And it is a fact that in 1973/4 the Labour movement threw away the best opportunity since 1951 to bring about an “irreversible shift in power” by means of an alteration of economic structure.

Heath tried monetarism during the first half of his administration. Then, deciding it wouldn’t work, he put it to the trade unions to determine incomes through the Pay and Relativities Board. Mrs. Thatcher understood how close capitalism had come to extinction under her predecessor. She writes in her Memoirs:

“…Ted Heath’s Government… proposed and almost implemented the most radical form of socialism ever contemplated by an elected British Government. It offered state control of prices and dividends, and the joint oversight of economic policy by a tripartite body representing the Trades Union Congress, the Confederation of British Industry and the Government, in return for trade union acquiescence in an incomes policy. We were saved from this abomination by the conservatism and suspicion of the TUC which perhaps could not believe that their ‘class enemy’ was prepared to surrender without a fight.” (p7.)

We are not being wise after the event. Labour & Trade Union Review is published by a group which twenty years ago was called the British & Irish Communist Organisation and which in its British dimension took the approach of Ernest Bevin. The B&ICO published an election pamphlet in 1974 recognising that working class interest had temporarily parted company with the electoral ambitions of the Labour Party. And, three years later, we put all our energy into supporting workers’ control (the Bullock Report) against the leadership of the Institute for Workers’ Control.

We conclude with an extract from the 1974 election pamphlet,

“For socialists there are now only two honest and consistent strategies: One is to attempt to bring about a collapse of capitalism by intensifying trade union militancy…; by doing everything possible to intensify inflation, etc…. But that strategy is sheer fantasy… The only other strategy is an involvement of the working class in responsibility for controlling the capitalist economy; and, on the basis of workers’ control,… the implementation of a prices and incomes policy. This strategy links immediate to long term interests…

“The Tories stand for political control over incomes and prices… Labour pretends there can be con-trolled prices without an incomes policy, the Tories know and say that there cannot be control of incomes without control of prices.

“The Tories reckon with the actual social power of the working class, even though the official leaders of the working class still refuse to do so…

“Tory policies… are more in accordance with the requirements of social development than those of the Labour Party… This presents a dilemma.” (The Tories And The Left!, B&ICO, Feb. 1974)

This leaflet was issued by Labour & Trade Union Review at the CAITS Conference on Industrial Democracy.


This article appeared in May 1994, in Issue 41 of Labour and Trade Union Review, now Labour Affairs.  You can find more from the era at https://labouraffairsmagazine.com/very-old-issues-images/ and https://labouraffairsmagazine.com/very-old-issues-images/m-articles-by-topic/.