Tony Benn, lifelong supporter of the empowerment of the working class and architect for industrial change as part of the Harold Wilson-led Labour Government between 1964 and 1970, has died aged 88. He opened the Post Office Tower in 1966 as Postmaster General, then oversaw the development of Concorde and the formation of International Computers Limited as Minister of Technology – but, for readers of AROnline, his biggest impact on the industrial landscape was his role in the creation of British Leyland.
Tony Benn had been a rising star in the Labour Party sincing joining parliament in 1950, and would make himself an indispensable part of Wilson’s 1964 Government, which chimed perfectly with the times. Britain was confident, forward-facing and building brilliantly for the future, embracing what was coined at the time as the ‘white heat of technology’. Despite the outward confidence, Britain’s economy was struggling, though, with a balance of payments deficit and falling industrial output. And with a Socialist manifesto to pay for, the first matter of business was to cut defence budgets, and bring to an end the British Empire.
Tony Benn’s grand vision for industry was something to behold. It involved amicable mergers between the principal players – and, in the car industry, that meant encouraging Donald Stokes to start talking to George Harriman with a view to BMC and Leyland joining forces. At the time, this policy of merger was commonplace within the motor industry – one only needed to look at Germany and the formation of Audi out of NSU, DKW and Wanderer, and their subsequent take over by Volkswagen to see that this was an international phenomenon, and not just the ambition of a British politician.
Benn was committed to protecting manufacturing jobs in Britain and maintaining UK ownership of the country’s largest carmaker was essential in achieving that aim. The creation of British Leyland, therefore, was his idea. He would subsequently say that he, ‘did not want the British Motor Corporation destroyed by Ford and General Motors. If we had done nothing, BMC would have collapsed.’ Co-operation was the way forward for Tony Benn and, when successful, the cost to the taxpayer would be minimal, while the benefits could be great – when it worked.
The formation of British Leyland should have been a merger of equals but, following a couple of poor financial years, the balance of power tipped in Leyland’s favour. That meant Donald Stokes and Leyland essentially annexed BMC, changing the dynamic of the agreement and causing seismic shifts in what was to become of the national carmaker. Not least in the relationship with the unions, which were gaining strength and confidence to fight the management at every opportunity. Benn, who was also Chairman of the Industrial Reorganisation Committee, always felt that British Leyland’s management, and not the unions, were to blame.
Within a year of British Leyland’s formation, Tony Benn recalled, ‘Had lunch with Donald Stokes and the Leyland board. The number of strikes now in the motor industry does indicate a complete breakdown of communication. When we began talking about this, they said that Barbara Castle’s speech last year – in which she had said that power was passing to the shop floor – had done more damage than anything else. I said that it seemed incredible that if this was true – and none of them denied it – there should be any difficulty about it being openly declared. Although they were conscious of their own managerial defects, they were still a long way from realising that relations with the workforce required a great deal more time and effort, thought and participation than they were giving.’
In 1970, Labour unexpectedly lost the election and remained in opposition until October 1974. During those four years, British Leyland’s once-bright future had become unstitched, thanks to a combination of lost output through strikes, a collapsing world economy because of the Energy Crisis and a weak model range. Within weeks of returning to office, Labour was forced to bail out British Leyland and it was Trade and Industry Minister, Tony Benn, who told the House of Commons that the Government would be buying a majority stake in the company – and then subsequently propose its model and industrial strategy.
Harold Wilson and Tony Benn were forced to save British Leyland from going under – the effects on the Midlands, had the company gone under, would have been unimaginable in 1974. The company still operated from more than 50 factories and employed around 200,000 workers. The Government commissioned the Ryder Report and it was Tony Benn who agreed its contents, putting it forward to Parliament.
Sadly, it was flawed from the outset, as the company’s management under Wilson’s Government, was encouraged to work to Benn’s treasured policy of ‘industrial democracy’. This was meant to empower the workforce and have them roll their collective sleeves up and work hard to save British Leyland. Instead, it handed power to the shop stewards, and the subsequent loss of production, due to industrial action, was a tragedy on an national level – and one that an idealist like Benn would never have imagined. But then, he was far more principled than those to whom he’d handed over power.
Benn then became Energy Secretary and Eric Varley replaced him at Trade and Industry Minister – his direct involvement with British Leyland was over. In March 1976, Harold Wilson resigned as Leader of the Labour Party and Benn’s attempt to run for leader failed, with him finishing fourth. James Callaghan won, and Benn remained on as Energy Secretary.
The British Leyland experiment was very much on life support when Tony Benn’s talents were diverted elsewhere in 1976 and, truth be told, as laudable as his ideas were for the nationalised carmaker, they were unhinged by excessive industrial action, that under-developed model range, a lack of rationalisation within the company and, most tellingly, an increasing loss of confidence from the British buying public. Of course, it would be easy that this was naïveté exhibited by a principled man that was out of touch with the mood of the working man – or at least their union leaders – especially considering that he’d already found them too militant back in 1969. That would, though, be underselling Benn’s grand vision for British industry.
It’s easy for armchair experts to criticise Benn for railroading BMC and Leyland into a merger of unequals, stating that the failure of BMC ended up bringing down the once-great Leyland part of the company, but the potential for success was there for all to see. Equally, by not merging, both could have been lost even sooner – as even successful Rover and Triumph never really had enough working capital as an independent entity to develop models for the future.
Benn’s legacy in the car industry might well be a controversial one but, without his intervention, the British motor industry as we knew it may well not have even made it into the 1970s – certainly BMC was on the edge of oblivion when the company was taken over by Leyland in 1968 – and, again in 1974, when the company was about to fall off a cliff, he stepped in and managed its Government bail-out, without which, British Leyland would have died. Some would say that might have been a case of industrial natural selection but, without British Leyland, Birmingham, Oxford and many other production centres could have become industrial wastelands.
The mere thought of standing by and letting that happen was against everything that Tony Benn believed in…