Leading Article: New Labour should avoid snuggling up to the unions again

WHEN THE former trade and industry secretary, Peter Mandelson, addressed the Trades Union Congress last year, he had one important and persuasive message. He told delegates that it was time to clear their minds of the notion that the interests of employers and employees are necessarily in conflict. They had to understand that all the stakeholders in an enterprise stood to gain from its success. He did not phrase it quite like that, but that was the gist - and a spectacular piece of ideological cheek it was. For a Labour cabinet minister to tell the union movement that the principle on which it was founded is bunk was quite something.

But it was the right thing to say and, whatever the failings that pushed Mr Mandelson from office, his message should be passed on. In that context, the publication yesterday of the Fairness at Work Bill should be seen as being at a tangent to the central issues of the modern workplace. Most of the measures contained in it are reasonable - even "fair" - compromises that represent a rebalancing of the dangerously tilted structures of industrial relations left over from the Thatcher era. Who could argue against restricting the right to dismiss workers "unfairly"? Who could disagree that, if more than 50 per cent of a workforce vote on a reasonable turnout to be represented by a union, they should be entitled to be so?

But we should beware of thinking that these basic safeguards have anything to do with the real issues of competitive advantage and the success of enterprises, which depend on their culture, skills and the ability to innovate. Many of the forward-looking unions and their leaders recognise that they now have a much smaller role than they had in the past, and that their best hope of influence is to support flexibility and risk- taking.

But there are disturbing signs that the Government, for all its New Labour modernisation Muzak, is snuggling comfortably into an unspoken compact. It has given the unions new representation rights and has shut up about the 50 per cent union block vote at Labour conferences - in return for a quiet life on public sector pay, and union votes in Wales for the Prime Minister's candidate to lead the Welsh Assembly.

This is bad for both sides. If the new Trade and Industry Secretary, Stephen Byers, is famous for one thing, it is telling journalists in a seafood restaurant in Blackpool that Labour should cut its links with the unions. He should say it again, and this time in public. Instead of yesterday's candy-floss please-all about family-friendly policies, it would have been preferable to hear the Mandelson message from Mr Byers. The interests of workers and bosses are not opposed. Mr Byers should say that again, too. If the Government cannot speak the truth to its paymasters, when it is winning, when will it?