date: March 8 2002 embargo: 10:30am Saturday March 9 2002

Attention: industrial, political

Monks warns Labour that union support could haemorrhage

TUC General Secretary, John Monks, has warned the government that 'an explosive cocktail of issues' could lead to a 'haemorrhaging of trade union support, especially at the polling booths.'

Mr Monks told the Unions 21 conference meeting at TUC headquarters in London that there is a range of issues where 'Labour is leaving space to its left for one or other of the mainstream parties to occupy.'

These include the decline of manufacturing 'and a sense that the government is resigned to it'; the involvement of the private sector in public services 'including the government’s apparent reluctance to tackle the two tier workforce'; the future of pensions 'given the alarming flight from final salary schemes'; the government’s seeming admiration for the business world and 'the government’s opposition to the existing European Social Model and to new employment legislation, made very clear in the positions agreed with one of Europe’s least attractive politicians - Silvio Berlusconi.'

Mr Monks says those in the trade union movement arguing for a break with Labour are wrong as they are not 'advocating a European and pluralist approach to union engagement with politics, but arguing for unions to engage with the small socialist groups' who have 'bugger all' support.

'The real danger is, as ever, in the mainstream and especially from a one nation Tory Party with some radical confidence and some scepticisms about the virtues of some in the business world.'

'We have high hopes of this Government. We know it is not just a trade union Government. It must govern in the national interest. It must get on with the best of British business. We are up for deals, for social partnership with employers, and for change in public services. But let’s not have to repeat a variation on the famous Kinnock charge at Derek Hutton. That a Labour Government, a Labour Government let us down applying the values of genuine social democracy. '

Full text of speech

There’s two ways unions get in the front pages of the newspapers - strikes and rows with the Labour leadership. (And there‘s plenty of both around at the moment).

I will come to them in a moment. But first a word on the state of the unions. Many things are going well.

Unemployment is low, employment has never been higher. Inflation is low. Public sector employment is booming and public sector investment has been boosted tremendously. New recognition agreements are nine times what they were in 1997 and household name companies like Honda, Easy Jet and Virgin Atlantic have been brought within the union fold. Large scale financial support for union learning services and the TUC alone has 50 new staff in the regions working in this area; supported by the Government.

In the TUC, the Organising Academy is going well with a high number of recruits this year. The Partnership Institute has established itself well and is helping unions and managements with handling difficult changes.

A new concept, Worksmart is on the test bed - offering a web and call centre based gateway to the union world.

There’s plenty to celebrate as well as plenty of challenges and Jeremy touched on some of them. But inevitably public talk is about the re-emergence of strikes as front page news and the intensity of differences with Labour.

On strikes, I regard these as inevitable in a democratic society. More than that, they are a hallmark of a democratic society. But they represent a failure of relationships, a breakdown in the processes of negotiation, conciliation and arbitration. The fact is that despite the recent strikes in rail and the civil service in particular, there are few strikes by all historical or international standards and we must keep things in proportion.

On relations with New Labour, I wish I could be just as sanguine. There is an explosive cocktail of issues around. Here are some of those issues

• the decline of manufacturing and a sense that the government, with some brave exceptions, is resigned to it.

• the involvement of the private sector in the delivery of public services, including the government’s apparent reluctance to tackle the two tier workforce - we saw that in a leaked document on Thursday

• the future of pensions given the alarming flight from final salary schemes by many companies, and the 'work until you are 72' messages.

• the government’s seeming admiration for the business world.

• the government’s opposition to the existing European Social Model and to new employment legislation, made very clear in the positions agreed with one of Europe’s least attractive politicians - Silvio Berlusconi.

• A raft of difficult transport issues - railways, NATS and the London Underground.

• And the future of the Post Office.

Each of these is a massive problem. But while the Government gives the appearance of undue respect for business lobbyists, relations with the TUC will worsen.

The CBI has gone to war with us on the two tier workforce. Now we call on the Government to honour its pledges. Many of the good contractors support us. Digby Jones and those who are, I hope overconfident of the Government’s timidity must be disappointed.

Employers too are going to war with us on pensions. The only pensions that seem inviolate are those for the Board of Directors which are shamelessly munificent, compared to the rest of the workforce.

Employers, too, marshalled by the CBI, are likely to be difficult on the Government’s review of employment law which will among other things cover the Employment Relations Act, the status of workers and information and consultation.

I could go on with other specific issues but my point today is not to demoralise. I do not support breaking the link or holding back on financial support to the Party. Under our political system, that way risks divorce.

But more seriously, I warn the Government of the risk of haemorrhaging trade union support, especially at the polling booths. If the Conservative leadership had the wit to move to the centre and embrace, say, strong defence of good pensions and rail nationalisation, it could occupy space to the left of Labour and gain huge advantage. These are middle - Britain issues as well as ours.

On all the issues, I listed earlier, Labour is leaving space to its left for one or other of the mainstream parties to occupy.

There have been, and continue to be, real advances won under the Labour government that must be generously acknowledged - big spending on public services has just begun; legal rights for people at work have improved; there would be no prospect of the UK joining the Euro without a Labour government ; the anti poverty strategy; and the list could go on. Our concern should not obscure genuine advances. But we must not be taken for granted.

Much of the current impetus to leave Labour comes not from those advocating a European and pluralist approach to union engagement with politics, but from those arguing for unions to engage with the small socialist groups. But the best they could claim at the last general election was that they had got as many votes as the CPGB did in the 1951 general election ie bugger all.

The real danger is, as ever, in the mainstream - and especially from a one nation Tory Party with some radical confidence and some scepticisms about the virtues of some in the business world. Such an outcome would not be in the trade union interests. What must be our interest is for Labour to address our genuine concerns with confidence and conviction.

The TUC is not affiliated to the Party but I have been a member of the Party for nearly 40 years. I stuck with it when it was dangerously out to the left and through more than a few defeats. I deeply relished the triumph in 1997. I am not a quitter.

But the trade union world must have relationships wider than the Labour Party. We have had a good relationship with the Liberals on Europe and public services. We will talk to anyone about manufacturing, pensions and public services.

We have high hopes of this Government. We know it is not just a trade union Government. It must govern in the national interest. It must get on with the best of British business. We are up for deals, for social partnership with employers, and for change in public services. But let’s not have to repeat a variation on the famous Kinnock charge at Derek Hutton. That a Labour Government, a Labour Government let us down applying the values of genuine social democracy.

I hope that lesson was high on the agenda at the Chequers meeting yesterday.

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Press release (1,600 words) issued 9 Mar 2002