By Charlie Lamb
In the last eight months Britain has experienced more strike days since the bloody coal wars of the union-busting Thatcher years. With the arrival of such an unprecedented period of change comes the inevitable comparison to seminal events of the past and an investigation into whether or not they warrant comparison.
The Centre of Economics and Business Research has marked the strikes in the last few months as a ‘Winter of Discontent’, harkening back to the twilight years of the Callaghan ministry forty-five years ago. The winter of 1978-79, one of the coldest in the century, was characterised by the politically disastrous strikes carried out in protest of the Labour government’s cap on 5% wage increases for public sector workers in the face of rising inflation. This period, which would later be known as the Winter of Discontent, brought the nation to a halt, literally so in the case of public transport.
While the actual effects the 1.5 million striking workers had on the economy remains controversial, the political effect was undoubtedly the nail in the coffin for the dominant Labour party and an era of postwar public spending. The mass outrage at the complete collapse of the public sector resulted in Jim Callaghan’s weary fall from grace. His successor would bring in a nascent era of American-style reverence for the glorious power of the free-market.
The strikes of 2022-2023 are markedly similar to those of the late 70’s. As in 1978, vast swathes of the workforce belong to affected sectors. Teachers, nurses, border cops, transport and mail workers have all taken to the picket linesover the last eight months. These professions form a large part of the public sector workforce, and it is in this sector that we see the vast majority of disaffection. With wage increases for these workers capped between 3-5% after a series of economic disasters nationwide, dissatisfaction at the government’s lacklustre efforts at improvement have led to an outburst of union action.
But what effect have these efforts had on the economy? Certainly a lot of ink has been spilled over the disruptive aspects of these strikes, particularly amongst the paramedics who left their rigs earlier this month. From June to November, £289 million was lost after Mick Lynch thrust his RMT wrench into the transport sector, with an addition of half a billion from December to January as healthcare workers, faced with the immense difficulties of supporting the slowly dying NHS with its 100,000 vacancies, protested for higher wage increases.
With interceding losses through the winter, the total amounts to £1.7 billion lost under union action, though to what extent this deepens the existing economic crises is difficult to calculate. The country is on the eve of a recession. Inflation is expected to cap at 13.1% by the end of this year, and against a maximum of 5% wage increases, real wages continue to decline. Then there is Putin’s invasion of Ukraine, which has raised energy costs by 54%, only rising through the coldest months of January and February. This is compounded by the two year old cost of living crisis, which the government has still failed to provide adequate relief for.
Unlike 1979, the workers on the march have received a lot more public support than anticipated in the summer, especially NHS workers, who bore the brunt of the wasting plague years. In economic terms the strikes represent just another straw on the back of the British economy, at once supporting several bales of straw whilst being whipped to death by the Conservative government. Sunak’s barely three month premiership cannot seem to either sustain public services disrupted by strike action nor can it negotiate deals the unions will accept. However, this position is untenable. With unemployment at an extreme low, Sunak cannot possibly hope to withstand the unions without significant wage increases that match the devastating CPI rates that have arisen over the last year.
The government’s efforts to ease the stress of rising heating bills over the winter may as well be applying a sticking plaster to a gunshot wound. Meanwhile, inflation has put out any chance of economic growth in the next two quarters, and is unlikely to abate. The Bank of England’s desperate raising of interest rates are a forlorn hope, the recession looms large over the country, ready to strike at any moment. Meanwhile, in order to stem disruptions, the Sunak government announced earlier this week a last ditch bill to halt strikes deemed threatening to ‘crucial public services’. The Strikes Bill grants law enforcement a blank cheque for putting a halt to legal industrial action.
It is likely that the economic effects of the strikes will be limited. Private sector employees have seen marginally superior wage increases around 7%, with striking workers in these industries seeing quicker success than those battling the steadfast Tory government. The lethargic public sector has seen innumerable disruptions to transit and healthcare, but the slowing of the economy is more affected by the ongoing supply chain crunch that has continued through the post-COVID years.
When it does, we will see whether or not the nascent prime minister will survive its ravages. While the winter of 1978-79 showed broad public outrage against the widespread industrial action, our own ‘Winter of Discontent’ is shared amongst the populace, with relative support for strikers, especially in the healthcare and transport sectors. With most in Britain feeling the tightening grip of the economic crisis, solidarity with those staving off the devastating inflation rates through industrial action remains high.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St. Andrews Economist.