|>>|| No. 27887
The unions are over-blamed for Britain's pre-Thatcher malaise. Yes, they were chaotic bastards in the 1970s - but that was the nature of the period. The narrative that has stuck now is that in the 1970s we took a radical swing left and it all went to shit, which is practically the opposite of what actually happened.
Why was inflation so high by the mid 1970s? Unions? (They did bring down Heath after all) Not quite. Britain was running a highly inflationary economic policy under Heath to grow the economy in preparation for joining the EEC, while bank lending had been deregulated with the implementation of Competition and Credit Control. The result was that when the 1973 oil crisis hit and sent prices skyrocketing for everyone, Britain did particularly badly out of it.
The Miner's strike that brought down Heath was hardly union intransigence: They were some of the worst paid people in the country, they could've been given a raise in accordance with the government's pay guidelines, and on the eve of the election even the pay board was saying as much. Heath was the one who fucked up there.
So Labour came in offering the unions a fair deal: You keep down your pay demands, we'll up public spending so that your standard of living goes up, and everyone's happy. (This strategy actually worked very well for Australia in the 1980s.) Then Labour went back on that promise while expecting the unions to keep up their end of the bargain.
There's the famous IMF loan, which is usually imagined as a sign of national bankruptcy when it was really built on a succession of misunderstandings. The problem was never that we couldn't afford the domestic public spending deficit (measured in Pounds), the problem was that we calculated we'd import too much foreign goods without exporting enough of our own (the trade deficit), which meant we'd need a loan in dollars to make up the difference to stop the pound going down in value. The treasury at the time was operating with an economic model that says if the pound goes below a certain value, it'll go into freefall. We now know that to be untrue. On top of that, the treasury had miscalculated the cost of our imports in any case, so the loan was unnecessary. (Since about 1987 we've run a trade deficit every single year, for reference)
So Labour signed up to an IMF loan it didn't need and which demanded punitive public spending cuts, which understandably pissed off the unions. They were further pissed off when an election which was widely expected to happen in 1978 didn't. (Again, a miscalculation.) By the time the Winter of Discontent happened, the public sector unions had plenty of legitimate reasons to be upset with the government, and the private sector unions had plenty of legitimate reasons to demand their employers pay them more than the government's guidelines allowed.
But carrying on like this was never on the ballot paper: Setting aside the miners, the big reason for strikes was pay and conditions. Pay wasn't keeping pace with prices. This is a problem that would (world economy and non-implosion of the UK economy allowing) always have become less significant with time.
Britain doesn't exist in a vacuum. Almost every first world country suffered similar instabilities and changes of government through the 1970s. Many of them even tell themselves the same story of their pre-80s reform world. (New Zealand also likes to play up how they were the most controlled economy outside the USSR for example) What made ours sting particularly badly was that it came at the tail end of decolonization, when we were already in the mood to feel like we were in permanent decline. Relative to our European competitors, we were actually doing better on inflation, growth and unemployment in the 1970s (as the sick man of Europe) than we were in the 1980s. But because the 1980s were a much more stable decade, the popular memory is that the tough medicine was working even as our GDP slipped behind that of Italy (a position we'd not recover from until 1997), that powerhouse of good economic management.
British Leyland is a good example for the general precedent of British failures. Setting aside our government, our private sector management isn't very good either. Both in the 1970s, and echoed again after Brexit, you can see a recurring problem of laziness and complacency on the part of our management. When the pound drops in value, you can reliably expect British companies to pocket the extra profits by increasing their prices rather than using the fact their goods are now cheaper to expand into new markets and make themselves more resilient in the future.
The government agency that acquired British Leyland had actually been designed to buy a slice of successful British companies and help them with long term planning, etc, as well as to support organizations like co-operatives. That was one of the actual left-wing ideas of the 1974 Labour manifesto. But the Labour right were dominant in cabinet at the time and had no real interest in that sort of thing, so instead it wound up being used to save companies that it would be too politically costly to let die. (There's an excellent quote somewhere about how the National Enterprise Board went from "socialist maternity unit to capitalist nursing home" or something.)
Blair is given too much credit and the Old Labour/New Labour split is misunderstood. There were a lot of modernizers inside Labour and a lot of them were far more switched on than he was. Blair himself wrote a very good analysis of Thatcher's success in his diary ( https://www.lrb.co.uk/the-paper/v09/n19/tony-blair/diary ) but then went on to embrace her legacy instead of committing to some kind of industrial (or at least export-oriented) rebuilding.
It suited Blair to portray New Labour as a break with the "Old Labour" socialists who were causing trouble in the 1980s, but this is historically misleading: Much like under Corbyn, the Parliamentary Labour Party was to the right of the Labour membership. Much of "Old Labour" were right-wing figures who stood behind Callaghan as he cut public spending and hiked interest rates. The true spirit of Old Labour is imagined to be Tony Benn where really it ought to be someone like Harold Wilson, a man who it's now common to view (somewhat unfairly) as a proto-Blair figure, lacking in principle and focused mainly on power.
One of the real tragedies is how the modernizers who weren't part of the Blair/Brown/Mandelson clique failed to build a faction around themselves. Bryan Gould was their candidate for the leadership and he wasted his chance by standing against John Smith in 1992, then left Labour (and Britain) because he could see he had no prospects of getting anything useful done by staying. So now you've got the Labour of today, caught between two factions that shouldn't exist and more than a few MPs who don't seem to have any political leanings whatsoever.