Chapter 28 Section II Rawls-Royce Policy

In spite of the many difficulties that befell us in the summer and autumn of 1970, no melancholy thoughts had yet entered our minds.In fact, Ted Heath, Tony Barber, Robert Carr, John Davies and others are embarking on their radical reform programs with great enthusiasm, while the rest of the cabinet are enthusiastic cheerleaders long. First, the government is determined to start cutting public spending. (In fact, this was the only issue that was continuously considered at Cabinet level throughout the 1970-1974 period. The December 1973 cuts were rushed and not discussed in detail in Cabinet.) Discussions began at the end of July.The agreed target was a net reduction of £1.7 billion in planned spending for 1974-75, and Ted circulated a paper on the economic situation to demonstrate his commitment to this strategy.Most of the spending cuts will be on the industry side, but I have already pointed out that there will also be a battle on spending within the Ministry of Education.Investment subsidies are abolished.The industrial restructuring company will close.Aircraft and aerospace engineering will receive the most scrutiny.Even the costly Concorde project was put on hold mainly for reasons of European policy.This is a massive free market economic project.This will make it possible to formulate a tax cut budget in October.According to the budget, the standard income tax rate will be reduced by 6 pence from the original 8 shillings and 3 pence per pound (equivalent to about 41 pence in the new city), and corporate tax will be cut from the next fiscal year.

Another important element of our economic plan was also brought up without hesitation - the Industrial Relations Act.The framework of the Act is already familiar: it is an area of ​​policy that we have formulated as the Opposition at its most detailed level, and we published our program as early as 1968.It was an ambitious and comprehensive attempt to provide a new basis for industrial relations.Its main principles are that collectively negotiated contracts should be legally enforceable unless the parties to the negotiations decide otherwise, and that the historical immunity enjoyed by trade unions in civil suits should be considerably narrowed and limited to those A trade union whose constitution meets certain minimum standards (registered trade union,).

Cases related to the Act will be dealt with by a new judicial system, the Industrial Courts and Tribunals, whose parent body is the National Industrial Relations Court, a branch of the High Court.The bill also gives the Employment Secretary new powers to, as a last resort, ask the National Industrial Relations Court to order a postponement of industrial action for a "cooling off period" of up to 60 days when negotiations break down - or to require that workers An order that a secret ballot be held before a strike is called. The bill, despite its hostility from the left, was in many ways positive for the trade union movement.For the first time in British law, trade unions will have (or not enjoy) certain statutory mandatory rights.There will also be statutory protections for unfair dismissals - also a new principle in UK law.Finally, the bill would repeal past legislation that made it a criminal offense for gas, water and electric workers to strike while their contracts are in force.

I was a strong supporter of the bill at the time, although I was skeptical about certain parts, such as the provision for vital services.We are all aware that the previous Labor government, under union and party pressure, backed away from its "replacing conflict" proposals for reforming the unions.As a result, our resolve to undertake the necessary reforms has doubled. In retrospect, the bill's rationale was muddled.It assumes that if union powers are generally affirmed, then unions will regulate their membership in terms of industrial action, such as reducing "wildcat strikes" without union consent, and using them in a restrained and orderly manner on the American model labor force.But the bill also includes provisions that strengthen the power of individuals to the detriment of unions.So the guiding ideology of the Act is part totalist and part liberal.

Specifically, there are four defects.First, the bill is full of loopholes.If the employer does not promise that the agreement is not necessarily legally binding, the union can effectively avoid legal sanctions by refusing to sign the agreement.Unions have also found an effective strategy to defeat the bill's hopes of changing industrial relations in the UK - many have simply deregistered and then carried on as if they still enjoyed their past immunity.Those harmed by their activities are not recognized as having a right to sue.And even when prosecuted in the rare cases, they are held in contempt of court.

Second, we don't have a clear picture of how industrial relations law fits into our overall economic strategy.Our move toward a voluntary income policy—beginning with Policy 8, known as N-1, which predated the Labor Relations Act—has increased the chances of wage disputes and put the fledgling labor relations Bill is under enormous pressure.Ultimately, the Industrial Relations Act was stalled, at least secretly, in order to sew a deal with the unions on wages. Third, if we are to rely so much on the law to improve the climate of industrial relations, we should avoid creating so many new institutions and setting up so many new procedures.This will make our opponents think this is aimed at them.And when we exercise our new powers to impose cool-off periods and enforce secret ballots before strikes, those practices are immediately discredited, because they heat up divisions and vote against us to decide whether to strike.

In the end, we naively assume that our opponents will play by the rules just like we do. "In particular, we believe that there will be no mass opposition to laws enacted by a democratically elected government, nor mass violations of criminal law like the 1972 miners' strike. We fail to recognize that we are dealing with immoral people whose main goal is not labor relations but politics. If we had known this at the time, we would have adopted a step-by-step approach, fighting within our sphere of influence according to our timetable, just as we did after 1979 We did. I didn't realize until later as Leader of the Opposition how far the far left had infiltrated union leadership, and why the colossal forces that were mentioned in Conservative pamphlets in the late 1950s are now So ruthlessly exploited. The Communists knew they would not be returning to Parliament, so they chose to advance their cause by entering the leadership of the trade union movement, against which both the Wilson and Heath governments had fought However, they all failed. If the power of the trade unions was not challenged at the beginning, the influence of the trade unions would not be as great as it is now.

However, at this early stage we are still trying to move forward. In October 1970, Robert Carr told the British Trades Congress that major parts of the Industrial Relations Bill were non-negotiable.The bill was published and passed its second reading in December. Mass protests and strikes against the bill took place in February and March 1971.Labor used all means to oppose it, but in August 1971 the Act was finally codified.The congress of representatives of the workers' congress passed a resolution ordering the deregistration of its affiliated unions.So now it's time to see what the actual effect of the Act will be when it goes into effect at the end of February 1972 - revolution, reform or business as usual.We'll find out soon.

At the same time, there are other issues that concern us.It has sometimes been argued -- this time by Enoch Powell -- that the government space department took over Rolls in February 1971 -- that Royce's decision marked the first U-turn.This is not the case.Shortly before the company informed the government that it was facing insurmountable financial difficulties (due to rising costs of the Lockheed contract to manufacture the RB-211 engines for its Tristar aircraft), a member of my constituency Voters told me he worries about the company.I asked Dennis to look up the numbers for me.One night my family saw him surrounded by the company's 6-year account books.He told me that Rolls-Royce treats research and development expenses as costs, not on the profit and loss account.This shows what the real problem is.

A few days later I was suddenly called to a cabinet meeting.I was in the cabinet anteroom and saw Fred Cofield, the Secretary of State for Aviation, waiting there.I asked him, "What are you doing here, Fred?" I wasn't surprised when he replied, "Rolls-Royce," somberly.His expression said it all.At that meeting we heard the full extent of the problem.Based on what Dennis told me, I confirmed Cofield's analysis.This surprised our colleagues.We decided, without much debate, to wind up the company itself, but nationalize its aerospace division.During the ensuing months, the Cabinet had more complex discussions as we renegotiated the original contract with Lockheed, which was also struggling financially.People can dispute the terms and payments that come with it - and they do.But I don't think any of us doubts that it is important for our country to maintain its own ability to manufacture aircraft engines for national defense reasons.In the long run, of course, the "lame duck" regained its strength when I was prime minister and flew back into the private sector.

The Rolls-Royce dispute was short-lived.A year later there was a serious U-turn in economic policy, manifested in issues such as reflation, subsidies to industry, and price and income policies.Then splits began within the Conservative right in parliament.Many Conservative supporters outside parliament were also divided.The failure of these policy U-turns to turn the tables on success has further divided the Conservative Party and had other consequences.It created an inflationary boom, which in turn sent asset prices skyrocketing and encouraged wildly uncertain financial speculation, tainting capitalism and, with it, the Conservative Party, despite many denying this.I'll come back shortly to the economic situation that led to all of this.However, it is important not to underestimate the impact of two non-economic issues on the Conservative Party - Europe and immigration.