Downing Street Years - Margaret Thatcher [167]
The money supply and government borrowing had been brought under control. Public spending was at last expected to begin falling as a share of GDP, if only slightly, now that the economy was growing again. Our overseas debts had been virtually halved. Productivity in industry was greatly improved. Most dramatically, inflation had fallen from 20 to 4 per cent — its lowest level for 13 years. Success against inflation was the single achievement to which we drew most attention as we approached the election, not least because Labour looked set to promise huge increases in spending and borrowing which could never be honestly financed and which would have sent prices soaring again. The black spot in the record was, of course, unemployment, which was still well over three million. It would be vital in the campaign to explain why this was so and what we were doing about it. Our ability to deal with this issue successfully would be a test not only of our eloquence and credibility but also of the maturity and understanding of the British electorate.
TRADE UNIONS
Unlike some of my colleagues, I never ceased to believe that, other things being equal, the level of unemployment was related to the extent of trade union power. The unions had priced many of their members out of jobs by demanding excessive wages for insufficient output, so making British goods uncompetitive. So both Norman Tebbit, my new Secretary of State for Employment, and I were impatient to press ahead with further reforms in trade union law, which we knew to be necessary and popular, not least among trade unionists.
Norman wasted no time. Towards the end of October 1981 he sought Cabinet agreement for what was to become the Employment Act, 1982. There were to be six main areas covered.
We would raise substantially the levels of compensation for those unfairly dismissed in a closed shop.
In existing closed shops there would be periodic ballots to test support among employees for their continuation.
We would make unlawful what were called ‘union labour only’ requirements in contracts, which discriminated against companies not operating a closed shop.
Henceforth, employers would be able to dismiss those taking part in a strike or other industrial action without having to run the risk of claims for unfair dismissal, provided that all of those taking part in the strike were dismissed.
The definition of a lawful trade dispute was to be further restricted in a number of ways, closing loopholes in Jim Prior’s legislation to limit immunities in case of secondary action.
By far the most important of Norman’s proposals related to the immunity currently extended to trade union funds. By virtue of Section 14 of Labour’s Trade Union and Labour Relations Act, 1974, trade unions enjoyed virtually unlimited immunity from actions for damages, even if industrial action was not taken in contemplation or furtherance of a trade dispute. They could not be sued for their unlawful acts or for unlawful acts done on their behalf by their officials. This breadth of immunity was quite indefensible. As long as unions were able to shelter behind it they had no incentive to ensure that industrial action was restricted to legitimate trade disputes and that it was lawful in other ways. Norman therefore proposed that this immunity should be reduced to that enjoyed by individuals under our 1980 legislation.* Both of these immunities would be restricted further by our proposals on ‘union labour only’ requirements and changes to tighten the definition of a trade dispute, which removed the immunity for disputes not mainly about pay and conditions and for disputes between trade unions.
The unions were bound to put up fierce opposition to moves which would expose them to contempt proceedings and payment of damages. Undoubtedly, they would claim that we were seeking to prevent their defending their members’ interests. So it was vital for us to explain the fairness of our proposals, and to emphasize that trade unions would only be at