The Social Contract was a policy by the Labour government of

Harold Wilson James Harold Wilson, Baron Wilson of Rievaulx, (11 March 1916 – 24 May 1995) was a British politician who served as Prime Minister of the United Kingdom twice, from October 1964 to June 1970, and again from March 1974 to April 1976. He ...

in 1970s Britain. In return for the repeal of 1971

Industrial Relations Act The Industrial Relations Act 1971 (c.72) was an Act of the Parliament of the United Kingdom, since repealed. It was based on proposals outlined in the governing Conservative Party's manifesto for the 1970 general election. The goal was to stabi ...

, food subsidies, and a freeze on rent increases, the

Trade Union Congress The Trades Union Congress (TUC) is a national trade union centre, a federation of trade unions in England and Wales, representing the majority of trade unions. There are 48 affiliated unions, with a total of about 5.5 million members. Frances ...

ensured that its members would cooperate with a programme of voluntary wage restraint. The Social Contract aimed to avoid the difficulty of former incomes policies, allowing the employers, who in nationalised industries were the state, to treat individual groups separately in wage negotiations. There would be 12-month interval between wage settlements to prevent repeated wage demands and allow the state some level of predictability in future wage expenses, and negotiated increases in wages should be confined either to compensating for inflation since the last settlement or for anticipated future price increases before the next settlement. It was to be the foundation on which the

Chancellor Chancellor ( la, cancellarius) is a title of various official positions in the governments of many nations. The original chancellors were the of Roman courts of justice—ushers, who sat at the or lattice work screens of a basilica or law cou ...

Denis Healey Denis Winston Healey, Baron Healey, (30 August 1917 – 3 October 2015) was a British Labour politician who served as Chancellor of the Exchequer from 1974 to 1979 and as Secretary of State for Defence from 1964 to 1970; he remains the longe ...

could introduce a stronger budget in order to control the high inflation that Britain and most other Western nations had begun to confront, which Edward Heath's previous government had failed to do.

References

The Miners Strike and the Social Contract
The National Archives
1974-1979 - The Social Contract
London Metropolitan University, 2012 * Politics of the United Kingdom 1970s in the United Kingdom Harold Wilson History of the Labour Party (UK) {{UK-poli-stub