Downing Street Years - Margaret Thatcher [58]
FIRST STEPS OF TRADE UNION REFORM: THE 1980 EMPLOYMENT ACT
A firm financial strategy was necessary to improve our economic performance: but we never believed that it would be sufficient, even with tax cuts and deregulation of industry. We also had to deal with the problem of trade union power, made worse by successive Labour governments and exploited by the communists and militants who had risen to key positions within the trade union movement — positions which they ruthlessly exploited in the callous strikes of the winter of 1978–9.
The economic effects of union power were still painfully clear. Pay rises were soaring while business prospects plummeted with the onset of recession. The engineering industry dispute in 1979 provided a good demonstration of how much poison excessive trade union power and privilege had injected into British industry — and not just the public but the private sector too. The engineering industry had every commercial reason to reduce costs so as to compete. Yet after a ten-week strike, the employers, the Engineering Employers’ Federation (EEF), conceded a 39-hour week, increases of £13 a week for skilled men and an extra week’s holiday phased over four years, all of this greatly increasing their costs. The EEF had crumbled and, because of the centralized system of pay bargaining, employers throughout the industry had also given in. The EEF had long accepted the closed shop as an unavoidable fact of life. So the unions’ power over their members was more or less absolute. Some employers, in search of a quiet life, preferred it that way. But it meant that when a dispute did occur the trade union was able to exercise what amounted to intimidation over its members — ‘lawful intimidation’ in the unhappy phrase coined by Labour’s former Attorney-General, Sam Silkin. Those who wanted to continue working could be threatened by the union with expulsion and the consequent loss of their job. The engineering strike was not a political strike, nor one which threatened to bring ordinary life to a halt. But it was precisely the sort of strike which no country fighting for its industrial future could afford — an object lesson in what was wrong. Its consequences damaged the whole industry for years to come.
Indeed, for the greater part of my term of office the need for new steps in trade union reform was repeatedly demonstrated by industrial disputes. The disadvantage of this was that, in a sense, we were always behind events, learning the lessons of the last strike. The advantage was, however, that we could point to recent abuses to justify reform and could therefore rely on public opinion to help us push it through.
On 14 May 1979, less than a fortnight after I formed the Government, Jim Prior wrote to me setting out his plans for trade union reform. There was a certain amount that we could do at once. We could set up our promised inquiry into the coercive recruitment practices of the printing union SLADE — which would deal also with the activities of the NGA in the advertising industry. We could also make certain changes to employment legislation by Order in Council, with the aim of reducing the heavy burden placed — on small firms in particular — by the provisions on unfair dismissal and