Collapse of a "Social Contract'

Militant unionists hold the nation at ransom

Not since the General Strike of 1926 have so many British trade unionists been pulled off their jobs in quest of pay hikes. For the third straight week, a strike by 80,000 truck drivers slowed trade and industry to a near standstill. Locomotive drivers repeated crippling one-day work stoppages that forced hundreds of thousands of commuters into their cars and onto highways made treacherous by a blanket of snow. Still more troubles loomed as London's subway workers considered striking this week. Four public employees unions, whose 1.5 million members include nursery attendants, teachers, hospital workers and crematory operators, staged a "day of action" walkout that afflicted Britons from the cradle to the grave. The public-be-damned attitude of the unions was chillingly summarized by Bill Dunn, an official of the striking ambulance drivers. Brushing aside requests that his members answer emergency calls, he declared: "If lives are lost, then that's the way it must be."

That "I'm all right, Jack" stance has dealt a mortal blow to the anti-inflation wage policies of Prime Minister James Callaghan. Although his Labor government has close links with the trade unions, Callaghan has had no success in restraining workers' demands for contract settlements that would greatly exceed his 5% wage-ceiling guidelines. The dam began to burst last fall, when Ford Motor Co. workers wrested a 17% raise after a bruising two-month strike. Since then, few unions have been willing to settle for less. The truckers, for example, have spurned a 15% hike proposed by the country's haulage firms and are demanding 22.5%; public workers want up to a whopping 41% increase. Even Callaghan himself has violated his own guidelines. In a fruitless effort to head off the government employees' walkout, he dangled increases of 8% to 9% before the lowest-paid public workers, but to no avail.

The aggressive tactics of striking workers have led to a growing anti-union sentiment. Particularly offensive to many Britons are the truckers' "flying pickets," who race from one point to another, hampering deliveries by nonunion drivers. A bill enacted by the Labor government of Harold Wilson in 1974 is allowing truckers to hold the entire nation virtually at ransom by preventing shipments to plants and businesses with no direct role in the union negotiations. More than 200,000 workers have been laid off from factories idled by a lack of raw materials and supplies. Almost $2 billion worth of imports and exports are piling up at British ports because of the union blockades. With no power to curtail the flying pickets, Callaghan has gone so far as to en courage Britons to defy them. "Everyone in this country is entitled to cross a picket line if he disagrees with the arguments put to him," said the Prime Minister last week. "I would not hesitate myself to cross a picket line if I believed it right to do so."

Many Britons decided to fight back on their own. In Reading, Orthopedic Surgeon Patrick Chesterman curtly told half a dozen union members who were waiting for treatment: "I'm terribly sorry, but I'm not serving trade unionists today." At the Dog and Partridge pub in Bury St. Edmunds, the owner's wife refused to serve lunch to two senior officers of the National Union of Public Employees. United Biscuits, a maker of cookies, persuaded a high court judge to issue an injunction against picketing truckers.

The crisis has proved to be something of a political bonus for the Conservative opposition and its shrewd leader, Margaret Thatcher. Because minority parties continue to support Callaghan's government, she has stopped short of calling for a vote of confidence that might topple Callaghan and conceivably lead to a Tory victory in a new election. But Thatcher has taken every opportunity to attack Callaghan for his handling of the unions. Last week, for example, she brandished a challenge: "You no longer have the courage to act. Will you not then at least have the courage to resign?" The Prime Minister declined.

Unfortunately for Callaghan, Britain's union-oriented labor laws do not empower the Prime Minister to order a cooling-off period when a crippling strike looms. The government also lacks the sophisticated mediation and arbitration machinery that has long been a part of U.S. labor laws. Beyond that, top-ranking union leaders now appear to have relatively little control over an ever more aggressive rank and file. Many public workers declined to return to work even after the official one-day demonstration of strength had ended.

Union members argue, with some justice, that they have already suffered enough from Britain's war on inflation. In 1975 they agreed to a "social contract," under which wage demands were held down in exchange for increased government benefits. Over the past three years, their restraint helped reduce inflation from 24.2% to about 8% last year. But, with Britain's economy bubbling from an infusion of North Sea oil, the unions feel it is time to recoup the sacrifices of the past. They regard Callaghan's effort to impose a 5% ceiling on settlements as a challenge. If they accept the policy, their members' pay hikes would fall, once again, behind the rate of inflation.

Callaghan will meet this week with leaders of the Trades Union Congress in an effort to arrive at a new social contract between the Labor government and organized labor. The stakes are high. Chancellor of the Exchequer Denis Healey warned last week that if the 15%-and-higher settlements sought by the unions are enacted, inflation will soar to double-digit rates. Moreover, unless taxes were raised to cover the higher wages, 100,000 local government workers, union members all, would have to be laid off. The Prime Minister could provoke a rebellion in his own Cabinet if he tries to balance the inflationary impact of high union settlements by slashing government spending, as he threatened to do last week. "There do come times when a nation's patience may run out," Callaghan wearily admitted last week. Britain's is wearing thin.

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