Publications Index | Encyclopedia of Trotskyism | Marxists’s Internet Archive

Socialist Review Index (1993–1996) | Socialist Review 179 Contents

Socialist Review, October 1994

Notes of the Month


The beginning not the end


From Socialist Review, No. 179, October 1994.
Copyright © Socialist Review.
Copied with thanks from the Socialist Review Archive.
Marked up by Einde O’Callaghan for ETOL.


‘Real personal disposable income, measured in current prices, fell 1.8 percent between the first and second quarters [of 1994] – the fastest quarterly drop since 1981. Compared with the same period a year ago, disposable incomes were 1.2 percent lower.’

So wrote the bosses’ paper the Financial Times last month (24–25 September). The figures help to explain why, when economic recovery seems well under way and when most economic statistics are favourable to predictions of growth, most people feel worse off. Spending by consumers and savings are both down, while borrowing has risen. As the Financial Times put it, ‘The squeeze on consumers may explain why economic growth has not yet translated into a widespread “feelgood” factor.’

There are two main reasons for the fall in incomes. The first is the tax rises which began in April and will further increase over the next months, with further rises in VAT on fuel, and taxation on insurance policies and holiday flights. The second is, according to the Central Statistical Office which compiles the figures, because of a small overall drop in employment incomes.

So wages and earnings are beginning to see a small decline after years when they rose in real terms.

It is no wonder then that pay has become the central political issue for increasing numbers of workers. Partly this is of the government’s own making. Its public sector pay policy has led to the signal workers’ strikes stretching out over four months, and to the nurses putting in a pay claim of over 8 percent.

There are also signs of increased levels of strike activity in the private sector, especially over pay.

The Tories cannot take any comfort from the settlement of the signal workers. They wanted to see the humiliation of the RMT but instead rail workers feel the union has won a reasonable compromise. Certainly Railtrack did not get all that it wanted.

Ministers and Railtrack boss Bob Horton talked at various times of sacking the striking signal workers and re-employing them selectively on individual contracts.

But they had to pull back from such a strategy, fearing that it could lead to further strike action. At the same time, however, they want to avoid the sort of victory for the signal workers which could generalise to those like the nurses or local government workers who want a decent pay rise to compensate for their loss of earnings. That was why they strung out the dispute for as long as possible.

The dispute was obviously political. It could have been settled months ago for a fraction of the cost spent on trying to break the strike. The government was centrally involved in negotiations between management and the union. Yet the trade union leaders still behaved as though it was a narrow trade union dispute with no political implications.

The strategy of Jimmy Knapp allowed Railtrack to gradually run more and more trains on strike days, leading to demoralisation. He constantly refused to escalate the strike, meaning it dragged on month after month. The refusal of the Labour Party to back the strikers, Tony Blair’s call for arbitration and his pledge not to raise taxes even for the rich all added to weakness on the union side.

Labour’s policy is moving in exactly the opposite direction from what is needed. David Blunkett has said that the nurses should probably get a rise around the rate of inflation (something like a third of what they are demanding). It is clear from the falling levels of income that much more than this is needed to compensate for the recent tax increases.

Refusal to even contemplate reversing some of the tax cuts for the rich which took place in the Thatcher years puts Labour to the right of the Liberals, as does Blair’s refusal to commit Labour to increased public spending.

Despite all this, various groups of workers see that the only way to maintain their living standards is to begin to fight back. The impact of the signal workers’ settlement will not be to stop them fighting. They are also seeing the improved economic situation as an opportunity for clawing back some of the conditions they have lost in recent years.

The combination of the two will hopefully mean that the signal workers’ dispute will mark the beginning, not the end, of a new wave of struggle for a decent wage.

Socialist Review Index   |   ETOL Main Page

Last updated: 1 July 2017