The historic 1981 General Strike that changed the island’s political direction and a tourism economy that was the envy of other destinations started 40 years ago today.

The island’s biggest labour dispute in its history capped a decade of social unrest and runaway inflation.

A deadlock over wages between the Government and the Bermuda Industrial Union spiralled into two weeks of national paralysis in April that year before a deal was struck.

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The two-day standoff that changed the island’s political and economic climate was yesterday remembered by Sir John Swan, a former Premier, then the home affairs minister, and Ottiwell Simmons, a former president of the Bermuda Industrial Union – who faced each other across the divide.

Sir John said inflation, spurred by the oil crises of the 1970s, had rocketed to between 22.5 and 23 per cent – a figure the union was aware of when it asked for wage increases.

Blue-collar Government workers and hospital employees came to the table with the Government in 1981 and demanded a 24 per cent pay rise.

But Sir David Gibbons, the Premier and finance minister in a United Bermuda Party Government, was only prepared to offer 15 per cent.

Sir John said: “It was a massive gap. We were trying to get to a solution and could not.

“Sir David was concerned with a fall-off in revenue. There was rigidity in the merchant community and the Premier feeling we could not afford it and that with all the civil servants getting an increase in income it would ricochet.

“In those days, although we didn’t have massive debt, money was not plentiful.”

Sir John and Mr Simmons, friends from childhood, agreed on one thing – neither side would budge.

The dispute spread to other unions and thousands of hotel workers were out on picket lines over 25 days.

Teachers briefly protested, trash was uncollected, and tourists had to carry their bags across the Causeway to the airport on foot.

Mr Simmons said he hoped for a settlement through arbitration that never materialised.

He added: “The press were saying the island could be shut down. I don’t recall us ever making that statement.”

Mr Simmons said Sir David refused to negotiate an agreement.

He added that Sir David had insisted that “Ottiwell Simmons is responsible for whatever goes wrong from the strike” and that “that got on my nerves”.

Mr Simmons said: “He made us out to be the enemy of the Government.”

Mr Simmons said he believed there were divisions within Cabinet over the crisis, but the Government stuck to its guns.

He highlighted that, after a tough decade of labour unrest and the 1977 riots, “the Government and the BIU were not on a friendly and conciliatory page”.

But Sir John pinpointed the start of problems even further back.

He said: “They didn’t like each other because of history – going back to slavery and employment and housing conditions that were horrible.”

John Harvey, a former head of the Bermuda Hotel Association and the Hotel Employers of Bermuda, said that the Government’s economic advisers had warned that blue collar workers were behind about 21 per cent in pay – a figure the union knew.

Mr Harvey added a leading figure in the Progressive Labour Party had said the two sides ought to strike a compromise on an 18 per cent pay rise.

He said: “They got into negotiation, and either they weren’t in communication or they could not afford it – but the communication was not so good.

“It led to this huge breakdown.”

Mr Harvey said tourism was at its peak at the time and May was “traditionally a fantastic month”.

He added: “Our thought was, please leave us alone. It crippled the industry. We could not provide service to the guests. We had to make the decision to close.”

Mr Harvey said that the hotel division of the BIU, which had thousands of workers on its books, was a powerful bargaining force.

He added: “For the hotels, it was an awful experience.”

Sir John said Mr Simmons addressed him as “Johnny” when they finally met at the Cabinet building with a final offer.

He added: “That’s what I was called as a young person. I’ll never forget it.

“He said 18.5 per cent is the best I can do. We shook hands on it.”

The strike ended on May 7 and the union won wage increases with an average of 20 per cent.

Sir John said: “I give Ottie credit. If it had been anyone else who didn’t have his commitment to find a solution, I don’t know what would have happened.”

But Sir John added: “It was still the end of the tourism business.”

He said the dispute also led to a change of tack by the Government.

Sir John explained: “We changed policies and Government committed to stopping the fires at Pembroke Marsh, building infrastructure, housing and things that would bring about change, including human rights.”

He said that the dispute echoed a message down to the present day.

Sir John added: “My point is, as we look back, if we’re not careful we will be right back but worse.

“We have so many businesses on the verge of collapse. With a minimum wage without getting the economy going, I just see history repeating itself.”

Mr Simmons said he looked back on the industrial conflict with pride.

He added: “That dispute called on the strength, sincerity and honesty of the working class of Bermuda.

“It made a big difference in the political situation. The UBP never really exercised the amount of power that they used to.

“It’s amazing, as far as I can see, the amount of progress that the PLP, the BIU and Black people have made since those times.”