Leading Article: Rail strike sends mixed signals

IT IS hard to believe that the dispute behind today's rail strike could not be resolved if both sides chose to show greater imagination and flexibility. The core issue is the measuring of productivity gains and the sharing out of the resulting savings. The Government's public sector pay policy imposes a freeze on wage bills. All increases must be funded from improvements in efficiency. Railtrack says the additional pounds 4.3m it offered the signalmen on Monday evening is thus recoverable. The Rail, Maritime and Transport Union claims Railtrack is understating the saving, so more should be available - and that signalmen should also be rewarded for previous gains.

This is deeply familiar territory, even if some features of the contemporary political landscape have a fresher look: an economy only recently emerged from a recession in which public sector unions settled within a 1.5 per cent pay limit; a Labour Party in the throes of choosing a new leader; and a government preparing British Rail for privatisation.

It should not be beyond the wit of those involved in the dispute to achieve a compromise that keeps everyone reasonably happy. Railtrack needs to be able to demonstrate that a better offer is also covered by gains in efficiency. The signalmen want to be able to attribute part of the award to past productivity gains; and for the Government, the improved offer must not be too close to the 5.7 per cent believed to have constituted Railtrack's first offer - the one John McGregor, the Transport Secretary, caused to be dropped.

The public's attitude remains equivocal. Last week's strike gained by taking place in glorious weather. Large numbers of commuters stayed at home, enjoyed the sunshine and toasted the union leader, Jimmy Knapp. The Government's intervention, which it at first denied, created the impression that the union negotiators had been misled by Railtrack. Majority sympathies were with the signalmen, archaic though their wage structure seemed.

But with two further strike days now scheduled, that could change. In the Commons yesterday, Mr Major sought to brand the acting Labour leader, Margaret Beckett, as 'the striker's friend'. Even today's shiny new centrist Labour Party is likely to be damaged by continued disruption by what could be portrayed as old-fashioned, thoughtless trade unionism. Paddy Ashdown will have struck a chord yesterday when he said that strikes should be the last resort, not the first.

In the longer term, it is in the Government's interests that the dispute should be settled swiftly and equitably. The market both for privatised railway franchises and Railtrack itself will be sluggish if potential operators fear being held to ransom by workers who operate the infrastructure.

Against the short-term gain of Labour discomfiture, the Cabinet should set serious damage to its already deeply flawed privatisation programme.