Johnson's plans to liberalise Britain's economy brought him into clashes with organised labour
“I want an open society with rules; one that delights in its tolerance and pursues justice not only within our borders but outside them. Protectionism in the economy; isolation in world affairs; nativism in society; means weakness in the face of challenge. We can be strong. We can overcome the challenge of global change; better, we can relish its possibilities. Over the coming months, we will be conducting this debate and refining policy on the basis of it. Take part in it. Organised labour has a crucial role to play. It is exactly where modern trade unionism should be. And if we can shape the debate in the right way, and get solutions that are fair and practical, we will do well by the count. We will show that politics, true politics can deliver the progress we all want to see.” - Prime Minister Alan Johnson’s speech to the TUC (2006)
The SDP was the unions and the unions were the SDP, at least that’s what National said. Sometimes this benefited Alan Johnson, like when he spoke at the TUC conference. Today, not so much. As part of reforms to target Britain’s bloated public sector and to pull Britain closer to the EU, Johnson had taken the knife to the one place the Junta dared not touch, public sector pensions. The reforms included raising the retirement age for public sector workers and scrapping the “80 rule”, which allowed local government workers to retire early if their age and years of service combined exceeded 80. With state contributions to public sector pensions reaching nearly £10 billion, Johnson saw a place to make cutbacks.
This put Johnson on a collision course with the Association of Government Workers, one of the largest and most powerful trade unions in post-transition Britain, representing middle and lower government workers including local civil servants. The AGW, alongside several smaller public sector unions voted to strike and over a million public sector workers walked out of their jobs. Teachers, librarians and sports centre workers all took to their local town halls to march and share their grievances. The AGW’s pension action was the largest example of industrial action since the General Strike that helped topple the Junta in 2003.
"Jonathon Riley, the architect of trade union autocracy, was dropped as minister. This marked a liberalizing turn that recognized the need to trade to meet the basic needs of the population. The postal strike and the general strike that followed, contributed to this restructuring. Though many more arduous protests would be mounted before democracy came to Britain, the strike marked a turning point. It signaled a shift from the brutal military-fascism of the 1970s and 80s, to a more rational-bureaucratic Junta in the 2000s. As well as the growth of a ‘social opposition’ base. The grandiose Junta and all its repressive effects to which Hill-Norton clung was dissolved after 2003. The mystique of the 68 coup, the main formative influence of the regime, was diluted." - The British General Strike of 2003, Peter Catterall (2009)
The AGW had helped to topple one government not long ago
Alan Johnson was used to organising strikes, not being on their receiving end, considering all his government had done the unions had been extraordinarily patient. Not only did the AGW lead workers in walking out, but they also announced they would suspend donations to the SDP until an agreement was made. The AGW formed the SDP’s second largest donor and with an expensive EU referendum a few months away the SDP couldn’t afford the hit to their coffers. One would expect in these situations the radical left Socialist Alternative to benefit from the SDP’s woes, but despite the fact they voted against pension reforms, they did provide the SDP with confidence and supply. For many trade unionists, the SA’s hands were dipped in the blood, even more reason for John McDonnell’s internal opponents to sharpen their knives..
Now there was the question of what to do with all the librarians running amok. In the good old days you’d send the boys in blue to beat them up, or failing that the boys in green, but in the new democratic Britain sending soldiers to beat up Mildred the librarian was generally frowned upon. The Government had to embark on the long forgotten dark arts of union negotiation. Somewhere deep in the Department of Industry civil servants were opening negotiation handbooks that had been shut for 40 years. The situation was no less strange to the trade unions, who until recently had operated underground, and then under strict supervision, making demands to the government was unheard of.
Negotiations in plush offices had replaced clashes on the picket line
The strike would continue for several months, going well into May, local swimming pools would remain shut for the Easter school holidays as angry constituents wrote to their MPs. The striking AGW workers showed iron discipline, many of them had been beaten or shot at before, a snide comment from their managers was nothing. Their General Secretary Keith Sonnet ran circles around the Industry Secretary Chris Huhne. A former writer on economics, Huhne was used to the warm cushion of theory rather than the cut and thrust of trade union relations. Under mounting pressure an agreement was finally reached in a humiliation for the Government. The Johnson administration was forced to accept a much smaller cut in pension contributions, with the retirement age, most importantly the 85 rule, left untouched.
The strike also demonstrated the great strength of Britain’s public sector, and the unions that organised within them. Years of repression had made Britain’s trade union movement militant and fearless. Whilst Johnson had been forced to back down this time, the trade union movement wasn’t just something he could ignore, not with the whole world watching. For now this was a fight that could wait until after Britain was safely in the European Union. The pension reforms had failed, all they had achieved was breaking any trust left between the Johnson administration and the union leadership.
“Alan Milburn has called for a sweeping overhaul of party funding which will curb the influence of the unions over the SDP, MPs were told last night. Under Mr Milburn's plan union members would be required to agree to annual donations to the party through their unions. The total donation made by each union would also be subject to a cap. Milburn is consulting on whether to propose a cap of £50,000 a year although one source said last night that the limit could go as high as £250,000. Publication of his report into democratic party financing, scheduled for this month, has been delayed until the new year. The current lack of rules enable union leaders to wield considerable financial clout - and political pressure. But MPs believe Milburn will propose "individualisation", where each union member opts in or out of contributing.” - Milburn supports plan to weaken unions' grip on party, MPs told, Will Woodward, The Guardian (2006)
Figures on the trade union left like Prescott would not allow any weakening of the SDP's alliance with the unions