In 1978-9, the famous Winter of Discontent brought down the Callaghan government. At that time the Labour government was trying to enforce a 5% pay cap for public sector workers. Widespread strikes brought much of the country to a halt eventually bringing down the government.
We are now facing a similar set of dynamics. Number 10 and the Treasury are holding firm to their promised 1% pay cap – at least until April 2018. But will they be able to withstand the pressure? They are fighting on three fronts: their own conservative back benchers (and some cabinet ministers); the sudden magicking up of £1 billion+ to seal a deal with the DUP; and an emboldened Labour opposition. All of that in the context of rising inequality and declining living standards driven in large part by the government stubbornly sticking to its hard Brexit rhetoric that continues to suppress the value of the pound and freeze business investment.
With DUP support (assuming it lasts) it seems difficult, though not impossible, for the government to be brought down in parliament. But the opportunity to try to deal a blow through widespread strike action may seem too good for Labour to pass up. The strikes have already started. Strikes are planned both in the NHS and at the Bank of England. It is likely that these will eventually be broadened both within those sectors and maybe beyond.
True, organising strike action will not be as straightforward today as it was in 1978. But balloting of union members will likely find a positive response unless the government capitulates first and shows itself willing to blow a hole in the national finances. Short of that, it is unclear how a weak government and an increasingly unpopular Prime Minister can resist a Labour/trade union onslaught. Public opinion is unlikely to be on the government’s side.
And all of this could further paralyse the government right in the middle of Brexit negotiations.
It is unclear how it will all play out. Or what action the government could take to prevent such a development. One easy win would be to move away from the perception that the government is intent on taking the country to the precipice in its Brexit negotiations – as we suggest in our recent report. That may not be enough but it would be a start.
Other than that, the country should be prepared for a very rough ride before 2017 is through.
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