Winter of Discontent
The "Winter of Discontent" is a nickname given to the British winter of 1978 - 79, during which there were widespread strikes by Trade Unions, disrupting everyday life. The phrase is derived from the opening line of William Shakespeare's Richard III: 'Now is the Winter of our Discontent ....' The use of the term 'winter of discontent' in an industrial relations context was first used by Robin Chater (now Secretary-General of the Federation of European Employers) as a headline in an issue of Incomes Data Report (1977). It was later taken up by the speech writers for the prime minister who popularised it, and was applied by the then editor of The Sun, Larry Lamb.
The Labour governments of Harold Wilson and James Callaghan had been fighting for several years against inflation, which had peaked at 26.9% in the year to August 1975, but wished to avoid large increases in unemployment. As part of the campaign to bring down inflation, the government had agreed a 'Social contract' with the Trades Union Congress which allowed for a voluntary incomes policy in which the pay rises for workers were held down to limits set by the government. Previous governments had brought in incomes policies backed by Acts of Parliament, but the Social contract agreed that this would not happen.
Phases I and II
Phase I of the pay policy was announced on 11 July 1975, with a White paper entitled The Attack on Inflation. It proposed a limit on wage rises of £6 per week for all earning below £8,500 yearly. The TUC general council had accepted these proposals by 19 votes to 13. On 5 May 1976, the TUC accepted a new policy for the forthcoming year's negotiations of increases beginning 1 August between £2.50 and £4 per week; at the annual Congress on 8 September that year it rejected a motion which called for a return to free collective bargaining (which meant no incomes policy at all) once the agreement expired on 1 August 1977. This proposal became Phase II of the incomes policy.
On 15 July 1977, the Chancellor of the Exchequer Denis Healey announced Phase III of the incomes policy in which there was to be a phased return to free collective bargaining, without 'a free-for-all.' After prolonged negotiations, the TUC agreed to continue with the increases recommended for that year under Phase II limits and not to try to reopen agreements made under the previous policy, while the Government agreed not to intervene in pay negotiations. The Conservative Party criticised the lack of any stronger policy. The inflation rate continued to fall through 1977 and by 1978 the annual rate fell below 10%.
Despite having prepared for the end of the incomes policy, on 21 July 1978, Denis Healey introduced a new White Paper which set a guideline for pay rises of 5% in the year from 1 August. The TUC council voted overwhelmingly on 26 July to reject the limit and insist on a return to free collective bargaining. Unexpectedly, on 7 September, prime minister Callaghan announced that he would not be calling a general election that autumn but seeking to go through the winter with continued pay restraint so that the economy would be in a better state in preparation for a spring election. The pay limit was officially termed 'Phase IV' but most referred to it as '5%'. Although the government did not make the 5% limit a legal requirement, it decided to impose sanctions on government contractors who broke the limit.
Although not an official guideline, the pay rise set by Ford Motors was accepted throughout private industry as a benchmark for negotiations. Ford had enjoyed a good year and could afford a large rise, but was a major government contractor. The management at Ford therefore made a pay offer within the 5% guidelines; 15,000 Ford workers, mostly from the Transport and General Workers Union began an unofficial strike on 22 September, and the TGWU made it official from 5 October (the number of participants grew to 57,000). During the strike, Vauxhall Motors employees accepted an 8·5% rise. After long negotiation in which they weighed the chances of suffering from government sanctions against the continued damage of the strike, Ford eventually revised their offer to 17% and decided to accept the sanctions; Ford workers accepted the rise on 22 November.
Many public sector workers as a result went on strike for more pay, including refuse collectors, leading to piles of rubbish bags piling up in the streets of the UK for weeks. NHS ancillary workers, nurses, ambulance drivers, lorry drivers, and grave-diggers also went on strike. The government were forced to bring in the Army in order to maintain some essential services. These stark images of a country torn apart were important in persuading the British public that the government was in crisis (or so it felt at the time).
These strikes also led to a vote of no confidence in prime minister Callaghan, on 14 July 1978, which the government narrowly won by 300-290. However, the government later lost a second vote of no confidence, leading to the 1979 general election and the Conservative Party forming the new government, with Margaret Thatcher becoming the United Kingdom's first female prime minister.