In 1950 the United Kingdom's gross national product (GNP) was the second largest in the capitalist world after the USA, and in terms of GNP per head it ranked fifth. In the 1980s Britain stands only fifth in terms of total GNP and twentieth in terms of GNP per head. Britain's share of visible world trade also declined — in 1950 it accounted for 11 per cent of world trade, but by the 1980s it went down to 5 —6 per cent.
Especially acute was the fact that Britain continued to lag behind the other capitalist rivals both in the rate of economic development and modernization. The country experienced a chronic deficit in the balance of payments which meant that it could not compete efficiently on the world markets.
After World War II there was an emergence of new industries and the renewal and improvement of the country's infrastructure. However, these developments were not of such a vast character as they occurred in other capitalist countries such as Japan, the USA, West Germany or France. At the same time in spite of short periods of growth the rate of economic growth was low in comparison with the rates in other industrialized capitalist countries, never exceeding 2-3 per cent annually up to the 1970s, but much lower in subsequent years. Moreover, there were years of minus growth. Stagflation was the term which could be applied when assessing the condition of the British economy, i. e. stagnation coupled with inflation. True, the latter was reduced in the 1980s, but this was carried out at the expense of the working class and mass unemployment became an immediate consequence.
In short, Britain came to be known as 'the sick man of Europe'.
The democratic elements in the trade union and labour movement were aware of the fact that the immediate problems of the state were caused by the imperialist ambitions of the British governments which led to costly military expenditures. Moreover, the continuing export of capital abroad by the monopolies in search of super-profits contributed to the deterioration of the economic position of the state, as well as the inconsistent policies of the British governments concerning nationalization.
However, the politicians and ideologists of the British Establishment disregarding existing reality alleged that the problems of the country were caused by the high living standards of the British people and by the excessive demands of the working class.
This claim was completely false. Hence, on such an assumption the monopoly class and the political elite advocated a policy of wage-freeze which on a background of soaring prices meant a steady deterioration of the living standards of the British people.
This in its turn led to a growth of labour militancy associated with ensuing strikes. The effect of growing militancy within the trade unions was shown in actions like the national engineering strike of 1957 and the strike of London busmen in 1958. 1958 was a year which brought a record number of stoppages of work (2,859) due to industrial disputes, involving loss of 8,412,000 working days. Union leaders tried to stop workers from striking, but strikes went on. In these conditions when right-wing trade union leaders advocated a policy of class collaboration, the role of shop stewards became more important. Communists and other militants strengthened the local leadership of the unions in the course of struggle for better conditions. Shop stewards played a big part in maintaining the confidence of workers in their own power. As a result of their work many Communists and left-wing members of the unions won wider support. These developments were reflected in changes in the leadership of the largest unions, the Transport and General Workers' Union (TGWU), the Amalgamated Union of Engineering Workers and others. During the sixties many Communists and other progressives were elected to official positions. Frank Cousins, as general secretary of the TGWU was a welcome contrast to his predecessors.
The shift to the left was reflected also in the struggle within the Labour party. In the 1950s the right wing, headed by Hugh Gaitskell, the leader of the Labour party since the resignation of Attlee in 1955, launched an offensive to delete Clause 4 from the party constitution. This clause adopted in 1918 proclaimed the socialist aim of 'common ownership of the means of production, distribution and exchange'. True, the right wing never regarded this clause seriously. However, it still remained an obstacle on the path of open submission to the demands of the employers. The right-wing leaders alleged that the defeat of the Labour party in the elections of 1951 and 1955 was caused by the demands for further nationalization. However, in reality the electorate turned away from Labour due to its inconsistent policy concerning nationalization. Despite its frenzied efforts the right-wing leadership was defeated over this issue at the Labour party conference in 1960. Clause 4 remained in the party consitution. The delegates of the conference overwhelmingly supported Frank Cousins and his formula: 'You may have nationalization without socialism, but you cannot have socialism without nationalization'. Despite this severe setback for the right wing it continued to advocate and implement reactionary anti-socialist views within the Labour party.
The Suez disaster of 1956 led to a wider interest taken by the people in problems of foreign policy.
The British people rejected the policy of subservience to American imperialism, of making the country an 'unsinkable aircraft carrier'. In 1958 the Macmillan cabinet signed an agreement with the USA on the deployment of American missiles in Britain. It aroused a storm of protest all throughout the country. The Communist party was in the forefront of this campaign organizing mass rallies and demonstrations against nuclear weapons and bases. In this atmosphere of mass opposition the prominent scientist Bertrand Russell together with a group of progressives formed a new anti-war organization, 'Campaign for Nuclear Disarmament' (CND) which demanded unilateral nuclear disarmament. In April 1958 the first peace march was organized to Aldermaston — the centre of British nuclear research. Since then the Aldermaston marches have become an important event in the peace campaign in the United Kingdom. Under the pressure of broad sections of the British public the Conservative government accepted the proposals of the USSR on banning nuclear tests in 1963. However, the Conservative government faithfully supported US policies and in particular it gave full backing to the formation of multilateral nuclear forces initiated by the US government which gave the West German militarists a finger on the nuclear trigger. Military expenditures were enhanced by the Nassau agreement (the Bahamas) signed between Britain and the USA. The programme of supplying Britain with American Polaris missiles meant an end to Britain's independent nuclear forces.
Meanwhile, the British industrialists found it profitable to join the Common Market (the European Economic Community, EEC) hoping to gain access to the rich European market. Voicing these hopes the Conservative government started negotiations to join the EEC. Strong inside opposition was coupled with France's refusal to accept British terms. Macmillan was forced to interrupt the negotiations on entry. This was a personal setback for the prime minister who resigned in 1963. Macmillan was succeeded by Alec Douglas-Home, formerly foreign secretary, but better known as Neville Chamberlain's parliamentary private secretary and a leading supporter of his notorious Munich policy. The Conservative government had completely discredited itself by its home and foreign policy and the general election of 1964 ended thirteen years of Tory rule.
Shortly before the elections there was a change of leadership in the Labour party: Gaitskell died suddenly in 1963 and a more popular-looking leader was found. He was Harold Wilson, a former professor of economics at Oxford. He criticized the incompetence of the Conservative party, excessive military expenditures, stagnation, etc. Though he was considered to be a representative of the centre of the party he soon showed that in twelve years he had fully absorbed the outlook of the right wing.
In spite of Wilson's leadership the working class and other progressive people rallied round the Labour party in 1964, and even more so in 1966, giving it a comfortable majority in parliament.
When the Labour party came to power in 1964 it faced a very serious situation: the majority in the House of Commons was marginal. Labour supporters were asked to give the government a chance, 'not to rock the boat', to maintain unity to keep the Tories out. These motives undoubtedly had an effect on left-wing criticism. Harold Wilson began carefully with reforms appealing to large numbers of voters: increases in old age pensions, increased government help for municipal housing, restoration of some measures of rent control, and cautious support for a more general advance towards a comprehensive secondary school system. He was forgiven a lot because of his tiny majority in parliament.
On coming to power Wilson faced a balance of payments crisis (the deficit amounted to 800 million pounds). Urgent measures were to be taken. These steps were characteristic of orthodox Tory-style economy cuts and a wage-freeze policy. The government was bent on greater state involvement in the affairs of the economy to achieve greater nationalization, modernization of industry and redistribution of national resources. Wilson believed that close cooperation between the government, the monopolies and the trade union movement would contribute to the solution of the ills of British society. In 1965 parliament adopted the five-year national plan. There were some positive elements in the plan concerning economic recovery but in general the plan was a failure for it was bent not on continued nationalization but on encouraging monopoly development. Under the pressure of the labour movement Wilson's government contributed to raising the school-leaving age to 16, it extended comprehensive education, renationalized the steel industry and lowered the voting age from 21 to 18.
In foreign policy Wilson maintained continuity of Tory principles. However, in the first years of Labour government there was a turn for the better in Anglo-Soviet relations, though in the late 1960s these relations deteriorated because of British involvement in an anti-Soviet campaign.
The prestige of the Labour government was still further lowered by its unpopular policy in Northern Ireland where the Catholic minority started a peaceful campaign for equal economic, political and social rights. The Northern Ireland Civil Rights Association formed in 1967 organized mass peaceful rallies and demonstrations demanding equal civil rights with the protestants. However, this peaceful movement was met by brutal force by the protestant extremists. The Labour government under the pretext of restoring law and order sent troops to Northern Ireland. In reality the British army carried out punitive operations against the victims of protestant outrages. The British government dealt severely with the participants of the civil rights movement because it was a challenge to the system which had long served the interests of British colonialism. Mass arrests took place, concentration camps were set up where the British authorities carried out interrogations using torture and other illegal methods of brutal force. The inability of the Labour government to solve the Ulster issue on democratic lines caused wide-scale discontent both in Northern Ireland and Britain itself.
However, especially unpopular was Wilson's attempt to solve the economic and financial problems of the country at the expense of the British people. This was the gist of the 'prices and incomes policy'. The government stipulated that the annual growth of wages should not exceed 3.5 per cent which was much lower than the actual growth of prices. In other words it was a typical wage freeze policy which led to wide-scale industrial unrest. Frank Cousins resigned from the cabinet in protest against the Wilson line. Labour unrest grew: if in 1967 734 thousand workers went on strike, in 1968 the figure grew to 2,258 thousand. In 1968 the centenary congress of the trade unions movement passed a resolution overwhelmingly deploring government intervention in collective bargaining and demanded the repeal of the Prices and Incomes Act. Even more important, for the first time in a hundred years there appeared a significant left-wing group in the leadership of the TUC.
In January 1969 the government produced a White Paper called In Place of Strife which proposed new legislation under which workers taking part in unauthorized strikes could be fined. It gave the government powers to enforce a 'cooling-off period, delaying strikes for 28 days. The latter proposal was based on similar laws in the USA. The plan to fine workers was regarded as a most hostile anti-trade union measure. The whole trade union movement united to oppose these proposals. The British communists again were in the front ranks of this struggle. Protest strikes in February and May 1969 involved hundreds of thousands of workers, particularly in London and Liverpool. In April a National Convention of the left was organized by the Communist party together with various left-wing Labour groups. An extraordinary conference of the TUC, the first called in over 40 years, was held in June. In face of determined opposition Wilson climbed down and withdrew his plans for a new law. The mass media spoke of his humiliation. The negative effects of Wilson's policies were clearly reflected in the general election of June 18,1970. Only 69 per cent of the electorate participated, the lowest percentage since World War II, and within this lower poll the percentage of Labour votes dropped to 43. This meant that over two million Labour voters had abstained in protest against right-wing policies. On this background the Conservatives won the election and Edward Heath formed the new Tory government. The 1970s saw a rapid deepening of the economic and political crisis of Britain. The lack of modernization in the period of scientific and technological progress due to the outflow of capital, huge military expenditures had a most negative effect on the performance of British industry. Being a trading nation it failed to compete successfully on the world markets because the economies of her main capitalist rivals had experienced wide-scale modernization, especially after World War II and their goods were comparatively cheaper. This had an adverse effect on the country's balance of payments which is a ratio between the earnings of a country through exports and the expenditures due to imports. With a deficit in the balance of payments a country is forced to make loans. Hence financial difficulties become imminent and the national currency is devalued.
Such a situation occurred in Great Britain in the given period: the devaluation of the pound became a grim reality for British industry, finances and for the nation as a whole. Especially hard hit were the working people whose inadequate earnings did not keep pace with soaring prices.
1973 was an important landmark in British history for on January 1, 1973 Britain was admitted to the European Economic Community together with Ireland and Denmark. When it was formed in 1958 the United Kingdom remained outside, still giving prevalence to sustaining links with the Commonwealth. With the former colonies gaining greater independence economically the big monopolies decided to gain access to the rich European market. However, inter-imperialist rivalries and strong opposition at home held up these moves of the British governments. Britain's membership meant serious changes for the country and especially for the people. Prices on foodstuffs and consumer goods went up which meant new hardships for the working people. Trading patterns changed too: Western Europe became the dominant focus while Commonwealth links weakened.
Northern Ireland remained a burning issue. Despite the presence of the British army which turned a blind eye to the violence and crimes of the protestant ultras the province was on the brink of an open civil war. On Sunday, January 30, 1972 British paratroopers fired on a peaceful civil rights demonstration of Irish catholics in Londonderry, killing sixteen people. This was bloody Sunday which will always be remebered as one of the tragic days in the history of the nation. The Tory government furthered its offensive against the civil rights movement by suspending the local parliament and imposing direct rule from London in 1973. However, there was no end to the crisis because official London refused to grant the democratic reforms which could solve the crisis.
In foreign policy the Heath government supported the traditional Conservative line; full support of American imperialism, NATO and of other reactionary blocs such as CENTO (the Central Treaty Organization) and SEATO (the SouthEast Asia Treaty Organization), neo-colonialism in every possible way, hostility to the world socialist community headed by the Soviet Union, support of reactionary regimes such as the white minority regime of Ian Smith in Rhodesia and the southern bulwark of imperialism in Africa — the racist regime in the South African Republic. Nevertheless, pressed by new realities Heath had to accept the new balance of forces and Britain signed the Four-Power treaty on Berlin in 1972 and finally recognized the GDR in 1973.
Meanwhile the crisis sharpened still further in Britain itself with inflation rising from 10 per cent to about 20 per cent a year, the negative trade balance getting still worse, especially after entry into the Common Market, and unemployment rising to around a million. Heath decided to show his firm hand by a dramatic confrontation with the miners at the end of 1973, forcing them to strike for higher wages and then, as coal stocks began to run out, ordering all industries to limit work to three days a week. Heath called a general election for February; 1974 and expected a great victory. In fact the working class totally rejected the Conservatives and brought them down to a humiliating defeat: the Tories lost over a million votes. The Labour party won. However, the Liberal party too made a startling success. The increase of votes for the Liberals as well as for the Scotch and Welsh National parties showed that the electorate was disappointed with the inconsistency of the right-wing Labour leadership. Heath's defeat led to his resignation as leader of the Conservative party in 1975. Margaret Thatcher, a representative of the right wing, became leader of the party of 'big business'. It was a break with established traditions when only men were considered to be suited for such activities.
Having won a small majority the Labour government held another election in October 1974 winning a workable majority. The new Labour government of Wilson — Callaghan (Wilson retired for personal reasons in 1976) learned the necessary lessons of its previous defeat. Therefore it was more cautious especially in regard of its policies toward the labour movement. Some positive measures were taken: the notorious Industrial Relations Act was repealed, the miners received a wage increase, the full working week was restored, municipal housing rents were frozen. In foreign policy a positive move was undertaken when Wilson paid a visit to Moscow in February 1975, which marked a new stage of improved Anglo-Soviet relations.
However, the main problem of his government was still the economic and financial crisis and here Wilson faithful to his right-wing convictions had nothing new to offer. But he was able to disguise the old policies by proposing a 'voluntary' wage-freeze policy called the Social Contract. It was based on the bourgeois view that high wages were the main cause of inflation and financial troubles. The acceptance of this policy by the TUC and Labour party conferences in 1975 under the influence of right-wing ideas was a major setback for the working class. It showed the continuing strength of reformist illusions and the weakness in theory which has long been a feature of the British working-class movement. This was the background to the 34th Congress of the British Communist party held in November 1975. Gordon MacLennan was elected the new general secretary. The forum of British communists emphasized the necessity to win left unity, to force the Labour government to adopt left policies, to attack the power of the monopolies.
Under this influence the working class stepped up its struggle against the social contract and opposed any intervention of the government in collective bargaining. In 1976 the TUC demanded an end to this anti-working-class practice. However, Callaghan, a typical right-winger, opposed these demands which led to a fall of Labour support. The by-elections in 1977 reduced Labour majority in parliament and it was forced to act in alliance with the Liberals, a party of the middle class. This led to new concessions made by the Labour government in favour of the monopoly class. Hence, the downfall of the Labour party was imminent. The May elections of 1979 brought the Conservatives to power and Margaret Thatcher became the first woman prime minister in the history of Great Britain.
The 1980s were marked by a prolonged state of depression of the British economy. Only in the second half of 1983 were there some indications of industrial activity, when the gross domestic product (GDP) increased by 2 per cent. However, industrial output even in 1986 remained lower than the pre-crisis level. This temporary recovery was primarily due to North sea oil and gas and the extension of services. The manufacturing industry — the backbone of the British economy — continued to be depressed. 25 per cent of the country's industrial capacity remained idle. Though there was an improvement in the balance of payments, the country's foreign debt remained high.
The government's economic policy was bent on encouraging private enterprise and de-nationalization. The most profitable state owned enterprises were sold out to private capital.
The home policy of the Thatcher cabinet was based on stringent principles of monetarism associated with limiting the circulation of money. In order to stimulate capital investment the government shifted emphasis from direct taxation to indirect, thus reducing direct taxes on the biggest monopolies by 3.5 billion pounds (simultaneously increasing indirect taxes twice). State expenditures were cut by 4 billion pounds which meant that social security funds, construction, science and culture would be the main losers. The Thatcher cabinet intensified the process of de-nationalization which hard hit the steel, oil, aerospace and other industries, as well as air transport. In October 1980 the government removed all restrictions on the export of capital which existed for more than 40 years. Overseas investment in 1979 — 84 equalled 50 billion pounds. The bank rate was raised to 17 per cent. These measures explicitly expressed the interests of 'big business'. Moreover, the encouragement given to the development of high technology industries at the expense of the traditional industries of the country precipitated the problem of mass unemployment, which by far exceeded 3.3 million in 1986 according to official statistcs and by trade union estimates was more than 5 million. The military expenditures, over 18 billion pounds in the 1985 — 6 fiscal year, a 22 per cent increase as compared with 1979, meant a deterioration of the living standards of the British people. The Conservative government launched an ambitious programme of stepping up nuclear arms, rearmament of the British submarine fleet with Trident missiles. The Thatcher cabinet gave full approval of British participation in the notorious 'star wars' project.
The foreign policy of the Conservative cabinet is motivated by the interests of the British ruling class and by its commitments to NATO of which Britain is an active participant.
The war between Britain and Argentina in 1982 over the disputed Falkland Islands indicated that Britain was ready to use force to defend its territorial ambitions overseas. The Falkland Islands or the Malvinas as the Argentinians call them, situated in the South Atlantic at a distance of 400 miles from Argentine territory and more than 8,000 miles from Britain were seized by the British colonizers in the 1830s. Argentina never recognized British sovereignty over the islands. In 1982 war broke out between the two countries. Britain using her military might and with full American backing won the war, which cost the British people more than 2 billion pounds. Moreover, further military construction on the islands meant 4 billion pounds out of the budget. The British government attaches strategic importance to the islands. The United Nations overwhelmingly backed Argentina in her claims of sovereignty over the islands.
The policy of Great Britain towards South Africa is motivated by the interests of 'big business', which is deeply involved in the economy of South Africa. The British monopolies derive great profits by exploiting the vast resources of the state. This explains why Margaret Thatcher stubbornly refused to impose sanctions against the apartheid regime defying the appeals of the African and Asian states to take joint action against a white minority regime based on terror and mass police reprisals against the African majority.
As regards Anglo-Soviet relations one should note their changeable character with all their frosts and subsequent thaws. Recent years, especially after the official visit of the Soviet parliamentary delegation headed by M. Gorbachev to Britain in 1984 are marked by most positive developments. There has been an increase in the volume of bilateral trade which exceeds 2 billion roubles.
The official visits of the British Prime Minister to the Soviet Union in 1987 and of Geoffrey Howe, the Foreign Secretary, in 1988 contributed notably toward the development of a dialogue between Britain and the Soviet Union in all fields of cooperation. However, the official state visit of M. Gorbachev to Britain in 1989 with all the ensuing results heralded a new most positive page in the history of Anglo-Soviet relations. The summit meeting between M. Gorbachev and M. Thatcher gave a powerfull fillip to a marked improvement of relations between the two states in all fields of cooperation in full keeping with the concept of a new mentality in international relations advocated by the Soviet government.
The British government greeted the INF (Intermediate Nuclear Forces) treaty signed between the USSR and the USA in 1987. However, Margaret Thatcher refused to abandon her nuclear deterrent policy. The champions of peace demand that the British government should take practical steps to a non-nuclear world and to an end of the arms race.
The home policy of the Thatcher Cabinet was characterized by new anti-trade union legislation: three acts were passed in 1980—4 aimed at curbing trade union activity and splitting the ranks of trade unionists. Moreover, moves were taken to pass a fourth act banning support given by one union to another in the event of a labour conflict.
The actions taken by the Conservatives led to a future polarization of British society. Living standards in Britain in the 1980s were about 11 per cent lower than the West-European average. The number of poor people increased from 6.1 mln in 1979 to 11.9 mln in 1986. Statistics indicated that in 1987 every third adult in Britain was living on the verge or under the official poverty level. The gap between the rich and the poor widened greatly in the years of Tory government. Unemployment figures indicate that about 10 per cent of the economic active population remained jobless and a large percentage was unemployed for more than a year. Especially hard hit are the young people, women and the non-white population.
The working class of Great Britain is conducting a resolute struggle against the onslaught of the Tory government under adverse conditions of mass unemployment and stringent anti-working class legislation. Labour militancy was reflected in the unique year long miners' strike of 1984 — 5 against the attempts of the Tory government to make thousands of workers jobless. There was mass solidarity with the miners both at home and abroad. Workers of more than 50 countries including the Soviet Union supported the British miners. Once again the Britith working class displayed its militancy and determination to resist the Tory onslaught. Working class unrest was vividly expressed in the printers' strike of 1986, the actions taken by nurses and other medical workers for the improvement of labour conditions within the national health service in 1987 and many other labour disputes in the country. The peace and anti-missile movement reached unheard-of heights, especially in 1982 — 3. Hundreds of thousands of people of all faiths and occupations protested against nuclear arms, deployment of American missiles in Britain. The mass protests at the Greenham Common base in which women of all ages actively participated caught the sympathy of the people in Britain and abroad.
The shift to the left was reflected in the Labour party when a new leader, Neil Kinnock, was elected. It was also reflected in the change of rules in the Labour party in electing the leader and selecting MPs, in the positive Labour programme of unilateral nuclear disarmament and support of the latest peace proposals of the Soviet Union. Positive changes were adopted by the latest congresses of the trade unions. The Communists in Great Britain together with other progressives in the labour movement struggle to unite all the left forces in the country against the onslaught of the monopoly class.
These aspirations were vividly expressed by the delegates of the 41st Congress of the British Communist party held in December 1989.
In June 1987 the Conservatives won their third successive victory in the general elections (42.3 per cent of the votes cast) securing 375 seats in the House of Commons. However, in fact only a third of those who had electoral rights voted for the Conservative party. A mere 75 per cent of the electorate participated in the elections. The election results clearly manifested the undemocratic nature of the electoral system.
Different factors contributed to the victory of the Conservative party. The capitalist mass media launched a mass campaign presenting the Tories and their leader as the most efficient managers of the British state.
The elections were timed to coincide with a boom experienced by the economy which benefited mainly from North Sea oil.
Margaret Thatcher won support among those sections of British society which benefited from her policy of privatization: 'big business', the well-paid highly skilled workers (the labour aristocracy), the new owners of houses. In the course of denationalization the Tory government sold out shares to individual holders: by 1986 there were 3 million share holders in the country. Cheap municipal housing was treated likewise: more than one million units of municipal housing were sold out on favourable terms. As a result the well-paid employees and workers became owners of individual housing. The reduction of the inflation rate was most benefited by the well-to-do too. All in all a combination of these factors widely propagated by the bourgeois mass media contributed to the Tory victory.
However, many serious analysts in the country, including the Labour party maintain that the government's claims of success were inflated by distortion and that these gains would not hold. The introduction of the community charge or the poll tax met overwhelming opposition in the country. This led to a serious setback experienced by the Conservative party in the local election in May 1990 and to a fall of the popularity of the Prime minister.
Under such conditions the only option for the working class and all the democratic forces in the country is to attain unity of action. The future development of the country depends in the long end on the class-consciousness of the working people, their unity and determination to promote peace, security and friendship among the nations of the world.