Margaret Thatcher Was a Privatization Pioneer, and This Is the Story of How Her Agenda Did Nothing But Make Life Worse for Millions of People
Continued from previous page
The Winter of Discontent, 1978/79
Mrs. Thatcher was lucky. Accident – and indeed, the weather – intervened to play a fateful role. Under normal conditions Britain is warmed by the Gulf Stream bringing tropical water across the Atlantic Ocean from the Caribbean. This creates a warm westerly breeze that keeps British winters free of the ice that normally exists at such northerly latitudes (Britain is as far north as Canada). But occasionally – in the winter of 1947, sixteen years later in 1963, and again sixteen years later in 1979 – the wind blows from the east, bringing cold air from Russia and central Europe. Starting in November 1978, Britain was subjected to sharply below-normal temperatures that persisted right up to election day, May 9, 1979.
This 1978/79 winter descended precisely at the time when British labor unions chose to go on strike to demand pay raises in an attempt keep up with the inflation. Like the rest of the world, Britain was suffering from the inflation and high interest rates emanating from the U.S. economy under the hapless Carter presidency. As high prices spread throughout the world, the inflation ate into the purchasing power of wages. The Labour Party had cut its political wrists by subjecting Britain to IMF austerity in the face of this inflation, and stifling new investment and hiring by public enterprises by letting the PSBR put a stranglehold on their financing. The strikes were directed against these public enterprises, for as noted earlier it was here that unionization was strongest.
The British are not equipped to deal with long periods of severe weather even in normal times, given its rarity. As a result of the public-sector strikes, the roads remained unsalted and were not gritted. Few drivers had snow tires for their cars (expecting winters normally to be mild). Traffic along the M6 motorway around Birmingham and other Midlands districts slowed to a crawl, grinding Britain’s industrial heartland to a standstill.
This became known as England’s Winter of Discontent. It turned a majority of voters, who normally had voted for the Labour Party, to resent its alliance with the unions. As Mrs. Thatcher described the political situation, on December 12, 1978, “trade unions representing National Health Service and local authority workers rejected the 5 per cent pay limit and announced that they would strike in the New Year.”
The next three weeks brought heavy snow, gales and floods. Matters came to a head on Wednesday, January 3, when “the TGWU called the lorry drivers out on strike in pursuit of a 25 per cent pay rise. Some two million workers faced being laid off. Hospital patients, including terminally ill cancer patients, were denied treatment. Gravediggers went on strike in Liverpool. Refuse piled up in Leicester Square. . . . In short, Britain ground to a halt. What was more damaging even than this to the Labour Government, however, was that it had handed over the running of the country to local committees of trade unions.”
Mrs. Thatcher emphasized that Labour Prime Minister Callaghan “had based his whole political career on alliance with the trade union leaders. For him, if not for the country, it had been a winning formula. Now that the unions could no longer be appeased, he had no other policy in his locker. . . . The Government could not even decide whether to declare a State of Emergency.” Mrs. Thatcher for her part was not particularly eager to promote a government settlement with the unions; she preferred to mobilize public reaction against them. In fact, she worried that “The Labour Party might just be persuaded to agree to the negotiation of no-strike agreements in essential services, the payment by the taxpayer of the cost of secret ballots in trade unions and even a code of practice to end secondary picketing – though the last was doubtful. Equally, I was clear that if the Government did accept, we were honour-bound to keep our side of the bargain.” However, she made it a condition of support for the government that it should end the closed shop, thereby stripping unions of much of their power – something no Labour government would agreed to do.