Born in Miskin, near Mountain Ash, Bailey attended the Gwyn Ivor School until he was twelve, then worked for a cobbler before becoming a coal miner.
However, in 1915 he suffered an accident which prevented him from working underground, and in 1917 he enlisted in the South Wales Borderers.
The following year, he returned to Mountain Ash, and was elected to the local council.
He then moved back to London as the party's national organiser, and in 1942 was appointed as its general secretary.
In the role, he led calls for the Labour Party government to promote co-operative ownership.