ABSTRACT
The idea of a ‘social contract’ was first introduced by Thomas Balogh after Labour’s defeat in the 1970 election. Labour’s failure to control union wage demands in the 1960s had, asserted Balogh, led to inflation and the need to introduce unpopular deflationary policies. When next in office Labour would need a workable long-term incomes policy, and to secure it in return would have to offer more socialist policies than before. Many senior Labour politicians blanched at what they saw as a glaring omission from their economic policies, but their efforts to make the Trades Union Congress (TUC) relent on this matter came too little. In June 1974 the General Council unanimously approved a document entitled Collective Bargaining and the Social Contract detailing TUC policy for the 1974-1975 wage round. Soon after the TUC Annual Conference the trade union leaders began to consider what should happen in the next pay round.
