Mark Seddon: Labour needs a new concordat with the unions

The disappearance of an influential lieutenant does herald longer-term problems for Mr Blair

Barely a handful of seasoned industrial correspondents remain – including The Independent's Barrie Clement – so it is hardly surprising that the seismic changes now underway in Britain's second most powerful union, Amicus-AEEU, have bought forth a torrent of excited but largely irrelevant comment.

The victory of the relatively unknown Derek Simpson as general secretary of the engineering union – and the inevitable resignation of Sir Ken Jackson over the weekend – has given way to grainy shots of rubbish piled high during the 1978-79 winter of discontent. The implication is that, along with the AEEU upset and a one-day public services strike, Tony Blair is being held to ransom by a new breed of union militants.

Such is the woeful ignorance about trade unions that, last week, a fluffy BBC reporter rang to ask if "Jack Jones had anything to do with the Transport & General Workers Union". When Jack Jones stood at the helm of the mighty T&G in the 1970s, his partner in crime – or progress – was Hugh Scanlon of the engineering union. As industrial pressure rose, the Prime Minister, Harold Wilson, reportedly told "Hughie" to "get your tanks off my lawn".

This was in a period, after the Opec oil price rise and before the winter of discontent, when Mr Jones and Mr Scanlon held as much influence as their counterparts in the CBI and the Institute of Directors. Fast forward to the present, and it quickly becomes apparent that the unions no longer have the muscle they once commanded; the economy is in much better shape and a raft of anti-union legislation helps ensure that Britain has some of the most restrictive employment laws in Europe.

Which goes part of the way to explaining the shock result that has propelled Mr Simpson, a former Sheffield sheet-metal worker, to the top table. Mr Blair and New Labour have felt confident enough until now to offer the unions the bare minimum, and, while "fairness not favours" has been much talked about, many trade unionists have had to watch as most of the favours were showered on New Labour's friends in big business.

None of this was lost on the engineers, most of whom work in the private sector. Nor were they impressed by the campaign videos mailed to them by Sir Ken's supporters; videos that featured the first knight of organised labour being fêted by, among others, Mr Blair and Gordon Brown. Being practical people – rather than militants – many members wondered why their general secretary was not more concerned with the manufacturing recession and what it meant for their jobs.

Yet Derek Simpson's stunning victory does have serious long-term ramifications for Tony Blair and New Labour. In the quarter century since the departure of Hugh Scanlon, his old union has been under the iron grip of a tough, right-wing regime that was reinforced by the merger that took place with the notoriously hard-line electricians union in the 1980s.

The electricians, first under Frank Chapple and then Eric Hammond, delighted in being the black sheep of the trade union movement. They happily crossed printers' picket lines at Wapping and broke TUC rules by recruiting – or poaching – members from other sectors of the economy that were the preserve of different unions.

The AEEU schooled New Labour in stifling dissent and in a command-and-control centralisation that it had perfected. At the union's bi-centennial celebrations in 2001, at the Dorchester Hotel in London, its left-wing past was airbrushed out.

As Mr Simpson moves into the hot seat at the union's headquarters in Bromley, south London, he will find that his union is not only bound to New Labour, organisationally and financially, but that it has powerful links to many pro-Nato and pro-American organisations that grew out of the Cold War hostility to communism. How ironic that Mr Simpson was once a card-carrying member of the Communist Party.

The election of Mr Simpson may not presage an immediate return to the shop floor unrest of the 1970s, but the disappearance of a close lieutenant in an increasingly restive trade union movement does herald longer-term problems for Mr Blair.

Labour's rising – and record – debt is an immediate concern. Mr Simpson is unlikely to write blank cheques. Nor will he, nor indeed any of his colleagues, be prepared to offer New Labour a bridging loan in advance of state funding being introduced. And while the outgoing TUC general secretary, John Monks, will be delighted that the engineers will begin to be more co-operative in the TUC's higher councils, the same cannot be said for the Labour Party annual conference – or the party's National Executive Committee.

The new generation of independent-minded and radical general secretaries know that they have a stark choice in front of them: either walk away from Labour and start again, or use the power still invested in them to change Labour from within. It is the latter course that Mr Simpson and his colleagues are likely to embark upon. They will be aware that, in the short term at least, it is easier to effect change from within than from without.

In the past week, Britain's industrial landscape has been dramatically altered. Mr Blair will need to reach a new concordat with a very different breed from those upon whom he could once depend to do his bidding, both in the Labour Party and at the factory gate.

SeddonZQ1@aol.com

The writer is editor of 'Tribune'