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A central question facing any incoming Labour government will be the question of wages. This issue, as in 1964 or 1974, will be the essential touchstone Economic Assesment' -OOP

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face mounting unemployment.' Three things were now absolutely clear: acceptance of free collective bargaining had simply been a tactical ploy; the argument for control had shifted from 'in return for radical measures' to 'in return for stopping job loss'; and the government were now moving from persuasion and threats to action.

Labour' 's left was paralysed. As early as January 1975 Michael Foot had endorsed Healey's position. The defeat of the left in the June referendum over Europe and Wilson's ensuing swoop to remove Benn from the Department of Industry with no response from the union leaders put them on the defensive.

With average earnings increasing at 27% and the retail price index soaring the government and General Council moved to a formal incomes policy. Murray instructed unions not to base claims on anticipated price increases or attempt to protect their members against tax increases. The General Council were discussing Jack Jones's plan for overall flat rate increases.

As usual capitalist crisis provided the justification for attacking labour. In June 1975 the dissatisfaction of capital with the slow pace of Wilson and Murray sent tremors through the economy. The pound fell almost six per cent that month.

On July 1 Healey announced that wage increases would be held to 10% in the coming round If the TUC did not agree this 'voluntarily' it would be imposed by law. A mere 15 months after Labour's return to power, and iss than that since Heath policy was cleared away, the TUC agreed to administer control over the wages of its members.

There was to limit on flat The TUC failed be a f6 a week rate increases. to get the £6 as of right. Their request for a price freeze was also turned down on the grounds that it would affect investment. Despite the 'voluntary' nature of the policy there would be sanctions against employers who did not comply.

With inflation now running at 30%, the policy represented a real wage cut for most workers. Once again they were to pay tor capital's problems.

In return the unions got nothing. The temporary' policy soon entered a Phase II. Now it was required not just to stop unemployment increasing, but to stave off cuts in the welfare state. By the end of Phase II real earnings were 10% down on their 1974 level.

The economists Andrew Glyn and John Harrison argue that there had been no comparable collapse since the 1850s.

Unemployment nearly trebled from 600,000 in 1974 to over 1½ million in 1978. Nor was the welfare state protected. School building was slashed by over 60% between 1974 and 1979; council house building fell below the levels of the Heath years; and hospital construction was cut by over a third as Wilson and Callaghan blazed the path for Margaret Thatcher.

Because today's capitalist crisis is deeper, we could expect any Labour government to move even faster towards wage control. But what the 1974 experience shows is that the General Council would be even quicker off the mark.

As Dennis Healey said of 1975: 'The most impressive thing has been the speed with which members of the General Council have themselves reached a voluntary agreement on a limit to pay which falls considerably short of the full compensation for the increase in the cost of living and which will mean some reduction in real take home pay. I do not think there has been any previous occasion in the history of this country or maybe any other country in which the trade union movement of its own will has not only agreed to such a policy but has agreed to it in very great detail' If we cannot rely on the union leaders to fight an incomes policy we cannot rely either on the left MPs. There is no evidence that Benn argued against incomes policy within the Parliamentary leadership.

Thirty-four MPs voted against Hagat on one to the in the Common: and lan MiParty Conference. But the left MP's line on the maintenance of the government at any cost, and their conception that any alternative would have to be implemented by Parliament, left them impotent, with no alternative. Having made the breakthrough on incomes policy, Wilson was then able to gut the remainder of the very limited Alternative Economic Strategy.

Yesterday the Social Contract. Today the Economic Assessment. Always incomes policy. The major lesson of the 1974 experience is that whilst we have to fight within the Paliamentary Party and the union hierarchies, the basic fight against incomes policy would have to come from the shop floor. And whilst the "74 experience unmasked the limitations of democracy in the labour movement, it also illustrated the limitations of militancy pure and simple.

The rank and file failed to overcome the orchestrations of their leaders. Crucial sections of the rank and file saw no alternative.

Inflation is a problem for workers although a different problem than it is for the employers. We have to fight negatively against incomes policy but to say no is not enough. We have, to provide alternatives The labour movement should demand that a new Labour government legislate a national minimum wage - and deal with the problem posed to the working class by inflation by legislating for automatic monthly rises in wages and benefits, tied to a working-class price index. And we should also the demand for inflation-protection of wages a programme for direct trade union action, against individual employers and against Tory or wage-cutting Labour governments.