Proactive Militancy in the 1970S: Work-Ins, Co-Operatives and Alternative Corporate Plans

Proactive Militancy in the 1970S: Work-Ins, Co-Operatives and Alternative Corporate Plans

‘From Prisons to Palaces?’[1] New Forms of Work Organization in the UK in the 1970s

Full Paper

Michael Gold

School of Management

Royal Holloway University of London

In February 1969, BBC1 television broadcast a drama-documentary entitled The Big Flame. The film, written by Jim Allen and directed by Ken Loach, portrays the contemporary occupation of the Liverpool Docks by some 10,000 striking workers, and reflects a strong sense of authenticity: genuine dockers appear on location, conversations have the disjointed nature of everyday speech and, overall, the film has the immediate, stark quality of a newsreel. The main character, Jack Regan, is a Trotskyite, who leads the occupation as a logical consequence of instability in the docks – the dockers maintain order and continue to work throughout the occupation, until it is overthrown through violent police and military intervention.

The portrayal of direct industrial action combined with a drama-documentary approach provoked a storm of controversy. The Daily Mail dubbed The Big Flame a ‘Marxist play presented as a sermon’, while Mary Whitehouse, secretary of the National Viewers’ and Listeners’ Association, regarded the film as ‘a blueprint for the Communist takeover of the docks’.[2] The most remarkable feature of the film in retrospect, however, is its prophetic character. It foresees the subsequent Upper Clyde Shipbuilders’ work-in, as well as the industrial unrest that beset British industrial relations through much of the 1970s. For the purposes of this paper, it also symbolizes the attempts made by many British workers in that decade to create alternative forms of work organization as a means to overcome the economic crisis of the day. In the film, the protagonists struggle to overturn common assumptions about property rights and capital control in favour of control based on the interests of labour.

Certainly, the economic crisis was serious over this period. Unemployment increased from June 1970 until it topped one million in August 1975, and then rose to 1.238 million by May 1979. Increases in industrial stoppages, wage rates and retail prices also reached record post-1945 levels. As Phelps Brown observed, ‘…stagflation became manifest as the dominant problem of the 1970s’.[3] Eventually, the underlying failure to ‘solve’ industrial relations problems contributed to the defeat of the Callaghan government in 1979, just as it had contributed to Wilson’s defeat in 1970 and Heath’s two defeats in 1974. The 1970s – the immediate, pre-Thatcher era – have accordingly become a short-hand reference for industrial chaos and economic gloom by contrast to the 1980s, a decade in which industrial order was allegedly restored and significant improvements in output and productivity took place.

Yet a refocusing and re-emphasis allow the consideration of a different perspective, one that should at least take its place alongside this conventional wisdom. It is a perspective based on the widespread grass-roots struggle that took place over the course of the 1970s to develop an imaginative and flexible alternative vision of how industry might be run more in line with workers’ interests. This vision embraced work-ins, the use of social audits, the formation of ‘new’ co-operatives and the role of alternative corporate plans in widening industrial stakeholding to include not just shareholders but also workers and their communities. These initiatives were, of course, snuffed out in the Thatcher era after 1979. This paper aims to bring together into one analytical framework a number of otherwise disparate trends in new work organization over the decade, trends that Hyman has referred to as ‘qualitative as well as quantitative advances in struggle’, which include ideas about workers’ control and guidelines for an alternative economic strategy.[4]

The broad context for these ‘advances in struggle’ was the Labour government’s industrial strategy 1974-79. The Trade Union and Labour Relations Act 1974 repealed the Conservatives’ Industrial Relations Act and restored legal immunities to unions involved in disputes. The Employment Protection Act 1975 encouraged the extension of collective bargaining, building on measures contained in the Industry Act 1974 aimed at increasing union influence over the national formulation of economic and industrial strategy. This Act set up the National Enterprise Board (NEB), a State-holding company designed to take a controlling stake in leading companies, as well as a system of planning agreements and tripartite sector working parties. Along with the Bullock proposals on employee board-level representation, these measures formed the backbone of the Social Contract with the Trades Union Congress (TUC), through which voluntary pay restraint was to be secured in exchange for greater union involvement across broad areas of economic and industrial policy. However, this strategy soon ran into difficulties, including employer hostility and the government’s disengagement from its own policies when faced by recession and economic crisis.

Against this background of ostensible union influence, ‘new’ forms of work organization emerged at shopfloor level that had not been used on a wide scale since before the Second World War. These included work-ins, the use of social audits, the formation of co-operatives and alternative corporate plans, which were generally responses to factory closures and redundancy, but then developed a more enduring life of their own as middle- or longer-term means of establishing job security.

This paper examines two specific questions relating to these ‘qualitative advances in struggle’. The first question involves an analysis of what such advances had in common, despite appearing so diverse and emerging under such different circumstances. By contrast to ‘negative’ methods of industrial action, such as the strike or working to rule, the use of sit-ins and occupations as a tactic contain elements of a ‘positive challenge to the employer, involving the assertion of a different relationship of control’ and so are ‘very much out of the ordinary’.[5]

They all took into account, as innovative forms of collective action, the specific circumstances of the workers involved, such as their labour market conditions, the size and structure of the industry concerned, the nature of its product markets, skills profiles, links into the wider community and so on. They also promoted forms of decentralization of decision making driven from below by labour, with workers taking responsibility for the business strategy of often failing companies. These ‘new’ forms of collective action therefore all potentially challenged the very foundation of management’s right to manage, and in some cases represented longer-term solutions to industrial relations problems. Both the formation of co-operatives and alternative corporate plans, for example, were attempts in different ways to institutionalize worker input into business strategy and developing and sustaining product markets.

The second question addressed in this paper is why these forms of collective action became so popular during the 1970s. Until 1971, experience of factory occupations in the UK had been sparse. It was not until the early 1970s that the most significant wave of occupations – and indeed other forms of innovative collective action – surged ahead as part of ‘the most intense period of class struggle in Britain’ since the general strike in 1926.[6] To help answer the question – why the early 1970s – mobilization theory provides a helpful framework.[7]

This theory has been used to explain the decline in union densities that have occurred in the UK since the peak of union membership in 1979. Broadly, the argument runs that workers are less likely to join unions if they do not believe that they are sufficiently powerful or influential to represent their interests. However, it can also be used to account for the opposite phenomenon – that is, why shopfloor workers and their shop stewards were prepared in the 1970s to engage in a variety of innovative forms of collective action in their struggle against rising levels of unemployment.

Political and social conditions within the UK in the early 1970s often gave these new forms of collective action a wide public, which then itself began to question the role of employers in treating labour as a commodity to be manipulated and discarded under pressures for profitability. Indeed, the February 1974 general election, held against the backdrop of a miners’ strike, ‘was fought on the issue “Who Governs Britain?” On that basis it seemed impossible for the Government to lose – but lose it did’.[8] This process was checked by the result of the referendum in June 1975 when the political left was decisively defeated in its campaign to leave the European Economic Community (EEC). However, such explicit questioning about the relationship between capital and labour, and a robust defence of workers’ interests, remained influential items on the agenda of the left until the end of the decade.

Management and the Right to Dispose of Property

The new forms of collective action emerged, then, against a background of considerable economic instability. To understand their significance, we need first to analyze the nature of management prerogative and its foundation in property rights that they were putting under pressure. The 1948 Companies Act, which governed the legal rights and obligations of directors, managers and shareholders during the 1970s, confirms that final executive power in a company lies in the hands of its owners, the shareholders. No mention is made anywhere of workers’ rights.

Such property rights constitute the foundation of industrial power in capitalist societies: the value of private property does not consist in the mere ownership of title deeds or share certificates but in the rights to control certain scarce resources. Winkler lists four of these: ‘the right to use the goods owned, the right to direct their use if one does not wish to use them oneself, the right to appropriate the fruits of their use, and the right to transfer the property to another owner.’ He adds that the ‘enforceability of these rights rests ultimately on the State’s monopoly of legitimate coercion’.[9]

However, in industry there are two limiting conditions on these rights. First, the State has come to protect certain interests of those directly affected by the disposal of property. Over the century up to 1979, employees’ rights at work had been generally extended thereby restricting the unlimited power of owners to impose conditions on them (though of course the labour movement has long recognized the limitations of the law as an instrument to protect workers’ interests).

Second, the State may simply not be called on, in certain circumstances, to use its ‘monopoly of legitimate coercion’. For reasons of expedience, certain companies during the 1970s decided not to contest the organized opposition of workers to the disposal of assets leading to redundancies, which sometimes included the seizure of the company’s assets through sit-ins and work-ins. The Institute of Personnel Management (IPM) warned against hasty action in the case of occupation because ‘the underlying problem is an industrial relations problem ... and while the civil authorities will intervene at the request of the company, they can thereafter handle the situation as they see fit, having regard to their law enforcement role rather than to the company’s industrial relations policies’.[10] The IPM itself noted only three cases where legal proceedings had been taken against ‘unauthorized occupiers’, two of which involved factories and the other an occupation by students of a foreign power’s High Commission. Furthermore, if the company actually fell into the hands of the receivers, the Labour government occasionally consolidated the transfer of assets to workers by assisting them to raise cash for a producers’ co-operative.

In other cases, faced by the prospect of redundancy, workers demanded the use of the social audit to take account of the interests of the local community affected, the extension of collective bargaining to include investment decisions and even the acceptance of alternative corporate plans designed to save jobs and manufacture socially useful products.

All these strategies were brought to prominence in the 1970s by the labour movement’s struggle from below against rising unemployment. Besides this, they shared two other features. The first was to challenge management’s right to dispose of property on the basis of private profitability alone, and the second was the mass support they generated within the labour movement and amongst the general public in the earlier part of the decade, though this waned later on. In short, these strategies arguably brought the role of property rights into the mainstream of political debate. However, their success in challenging property rights, as we shall see, varied according to other factors. The UCS work-in, for example, in the short term galvanized virtually the entire population of the west of Scotland in its defence, though subsequent attempts to consolidate work-ins through the establishment of co-operatives generally failed. Indeed, the first attempt to change tactics in the struggle against redundancies, by organizing a sit-in at GEC in 1969, also failed, the reasons for which are significant.

In August 1969, GEC – with 250,000 workers, the largest private sector employer in the UK – announced almost 5000 redundancies in addition to 12,000 already implemented over the previous year.[11] Three factories on Merseyside were affected, and at a mass meeting striking workers mandated their Action Committee to take any further steps necessary in response ‘including sit-ins and other measures’. This initiative had been inspired by the recent wave of factory occupations in France, the showing of The Big Flame, referred to above, and the example of Catholic workers in Belfast, who had taken control of their communities in the course of their struggle for civil rights. However, the sit-in collapsed for complex reasons. These included concerted attacks on the action by employers, local and national press and Labour MPs; concerns amongst the workforce about the legitimacy of a sit-in and possible repercussions; and splits amongst the shop stewards themselves, with a persuasive bloc set against the action. Coates adds that, furthermore, the workers, unlike those later on at UCS, did not possess a major capital asset that they could seize as a bargaining weapon.[12] So whilst a clear opportunity for a sit-in had presented itself, a coherent understanding amongst the workforce of its interests, good organization and a united leadership were missing. Nevertheless, Chadwick, writing in 1970, concluded with some prescience that despite the failure of the sit-in at GEC, it was surely only a ‘matter of months’ before another group of workers would try again, and that ‘many more’ would follow.[13]

Mobilization Theory and the Upper Clyde Shipbuilders’ Work-in

Indeed, one of the most significant developments in industrial relations during the early 1970s was the spread of the employees’ work-in and sit-in. In 1974, the TUC distinguished four types of occupation: work-ins; sit-ins over major management decisions (e.g. closures); collective bargaining sit-ins; and tactical sit-ins (e.g. as part of a wider strategy).[14] Since such occupations challenged locally the ‘unlimited property rights’ of employers to close factories and carry out policies ‘that would blight the lives of workers (and often the prospects of whole areas and towns)’, the TUC concluded that their use was ‘an appropriate trade union tactic in certain circumstances’.[15]

A stream of studies analyzed the causes and effects of occupations. Despite their important differences in emphasis, these studies all had one critical element in common: the view that the Upper Clyde Shipbuilders (UCS) work-in in 1971-2 was the major precursor of the movement whose example ‘transformed the nature of the struggle against unemployment and redundancies in Britain’.[16] Indeed, as one observer put it: ‘ ... if there had not been UCS, there would not have been Plessey at Alexandria nor the River Don works at Sheffield, nor Fisher-Bendix at Liverpool, nor the wave of Manchester sit-ins’.[17] However, none of the analyses of UCS, not even the most comprehensive by Foster and Woolfson,[18] examines its lasting impact on the social audit, the new co-operatives or alternative corporate plans.

We shall use mobilization theory to explain these ramifications, as well as to explore a development of collective action particular to the 1970s: the attempt to institutionalize the gains of collective action. Mobilization theory itself seeks to account for levels and intensities of collective action by reference to five principal factors: interests, recourse to appropriate forms of collective action, opportunity, organization and mobilization.

Interests

Shipbuilding in the UK had, since 1945, suffered from declining shares in global markets, falling profits and declining capacity. Though the financial position of UCS – formed from a merger of five shipyards on the Upper Clyde in 1968 – had temporarily improved, the Conservative government announced in June 1971 that it would withhold a further £6 million loan, a decision that would have led to 6,000 job losses and up to a further 9,000 in ancillary areas. This event was critical in triggering the subsequent work-in. ‘The sine qua non for collective action’, argues Kelly, ‘is a sense of injustice, the conviction that an event, action or situation is “wrong” or “illegitimate”’.[19]