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Punching below their weight, by Judy Hirst

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09 September 2005

As the TUC and government square up for their annual seaside contest, ministers face a movement riven with divisions and agonising about its future. Judy Hirst predicts tough times ahead for public sector unions

People are always writing obituaries for the unions, and never more so than during the run-up to the annual Trades Union Congress junket. This time last year CBI director general Sir Digby Jones declared unions 'irrelevant', claiming they were 'marching valiantly towards 1970'. Now, with soaring oil prices, terrorist bombs and wildcat strikes providing uncanny echoes of the 1970s, Labour MP Barry Sheerman has adopted the role of official doomwatcher. He has accused British Airways secondary strikers of exercising a 'malign influence' on industrial relations.

For the rapidly ageing body of delegates to this, the 137th TUC Congress, such ritualistic verbal abuse is par for the course; a source of pride even, as they trudge their weary way to Brighton. Not only are the unions patently still here and capable, on occasion, of flexing their withered muscles, they are also, contrary to all expectations, picking up recruits – sometimes in unusual places. Lap dancers, clerics and Chinese take-away staff are apparently among the latest converts to trade unionism, as the GMB, Amicus, Usdaw, Unison and other major unions step up their efforts to reach non-unionised employees – more than 70% of the workforce.

Even so, this year there are more reasons than most for the TUC's 800 delegates to feel glum. As they inspect the scores of motions, composite motions, amendments and standing orders on everything from Gate Gourmet to Gershon (including one congratulating the BBC for bringing back Dr Who), the brothers and sisters cannot fail to be aware that the unions' credit rating with government is at a new low.

'Stagnant', 'irritable' and 'bad-tempered' are among the epithets being used, on both sides of the table, to describe the current state of government-union relations. At the last meeting of the Public Services Forum, the government-union talking shop created in the post-prandial glow of the Warwick two-tier workforce agreement, Cabinet Office minister John Hutton was visibly agitated by the lack of progress being made on signing up the unions to Number 10's latest thinking on contestability, charter marks and other nostrums of public service reform.

For its part, the TUC is fighting a rearguard action against Leftist critics within the big unions, who regard it as increasingly impotent and, yes, irrelevant. It has even been suggested that the proposed merger between the giant unions Amicus, the T&G and the GMB will effectively make it redundant.

But TUC general secretary Brendan Barber has played down talk of a longer-term split between the larger unions and the congress. In a pre-Brighton briefing with Public Finance this week, he said: '[The merger] will be a major change in the landscape of the trade union movement, of that there is no doubt, but I want to ensure that shouldn't be achieved at the expense of the relations with other unions and the crucial role of the TUC as a single, coherent trade union voice.' Barber instead focused on 'a lot of frustrations' with the New Labour government that are shared across the union movement, such as the lack of progress over the implementation of the European Union's agency workers' directive, which is undermining the unions' plans to establish clear employment terms and conditions for British workers.

But the major issue around which all this dyspepsia is cohering right now is the rather age-appropriate one of pensions. The unions' 7 million members are greying by the decade. In the public sector, the age profile is even more pronounced. So it's no wonder that tempers are frayed over the likely fate of public sector pension schemes.

A series of motions to the 2005 Congress threaten widespread industrial action if, as is threatened, the government attempts to raise the public sector pension age to 65 and impose changes on final salary pension schemes. Ministers narrowly averted a strike by 1.5 million public sector workers in the run-up to the general election by revoking the proposed new pension arrangements – and promising further talks and a 'fresh start'. But, at the last Public Services Forum meeting on pensions, Trade Secretary Alan Johnson made plain the government's determination to press ahead with a normal pension age of 65. The public sector unions are increasingly suspecting they've been had.

Barber says the pensions issue 'remains an unresolved problem' and is open about the fact that it has so far proved impossible to agree even the principles of retirement reforms with ministers in advance of the next PSF pensions meeting – scheduled for later this month. 'Whether or not we agree a conclusion [on the principles], I don't know yet. There is still a lot of detailed work going on,' he says. In the present climate, talks could still break down.

Ian Brinkley, the TUC's head of economic and social affairs, says that the issue is overshadowing everything else. 'It has genuinely enraged the public sector workforce, to an extent that has surprised union leaders. And it's making relations elsewhere that much more difficult.'

The significance attached to pensions is not just down to demographics either. It has assumed near-totemic status as one of a number of things eroding the 'contract' between public servants and government, says Brinkley. 'People in their thirties, forties and fifties are saying hang on, I thought I had a deal over issues like job security and pensions. It's seen as an act of bad faith on the part of government.'

So is the Gershon-inspired round of civil service job cuts and wider public sector efficiency reforms, the object of a number of hard-talking motions to Congress. So far, despite lashings of rhetoric from Public and Commercial Services union leader Mark Serwotka, the response from trade unionists on the ground has been relatively muted. But that, says Brinkley, is because so far Gershon has tackled only 'the easy bits'; for example, the civil service areas with high levels of natural wastage and turnover, like the Department for Work and Pensions, and the savings to be made without too much pain from rationalising public procurement.

Things are likely to get a lot more difficult as budgets feel the effect of the squeeze on public finances, with local government the most likely target. Union-employer relations here are already pretty adversarial, and likely to get more so, with the announcement last month by the Local Government Association's new lead pay-negotiator, John Ransford, that the days of 'cosying up' to the unions are over. Despite the efforts of the Local Government Pay Commission, the pay spine and equality reforms it recommended have run into difficulties, often due to lack of funding and efficiency cuts or, in the case of backdated equal pay claims, tax and insurance demands from central government.

Union negotiators have told Public Finance that some of the government-union deals forged in recent years – including that on two-tier working – are now at a 'very fragile' stage. Meanwhile, the Cabinet Office response to union initiatives on issues like absenteeism and diversity has not always inspired confidence. 'They've done little more than draw up some check lists and set up a task force or two,' said one official. 'And government advisers have been pretty dismissive of our evidence on sickness leave.'

It's not all bad news. Workplace reforms such as the NHS Agenda for Change and the Schools Workforce Remodelling agreement represent a significant breakthrough, says David Coats, associate director at the Work Foundation. 'They reflect progressive agendas, and a different way of thinking about the unions' role. It's the way we should be heading.' He is also convinced that, slowly but surely, the government is beginning to understand that it too is 'the employer'; that when it lectures everyone else about the importance of consultation and taking the unions with them, that goes for government too.

'That was the purpose behind setting up the PSF,' he says. 'The idea was to develop this approach as part of a wider public services agenda.' Or, as the Work Foundation itself put it in a report commissioned early on by the PSF, what matters is meaningful dialogue between unions and employers, based on a 'shared understanding of the case for reform'.

Barber still toes the party line on the forum. 'If it wasn't there, I'd certainly want to invent it,' he insists. 'There are a number of low-profile, but very important pieces of work that have been done through it, including agreeing some basic principles that govern the approach towards pay and reward across the public services. We've not had a transparent set of principles from the government previously. There's also some very useful work being done on approaches to encouraging genuine involvement of staff in managing change.'

This optimistic outlook, though, seems a far cry from the tetchy exchanges that have characterised recent PSF proceedings. Things have probably not been helped by the endless revolving door of ministers chairing the forum during its short life (Douglas Alexander, David Miliband, Ruth Kelly and John Hutton in less than two years). Nor by the chancellor's habit of springing nasty surprises, like announcing tens of thousands of civil service job cuts over the heads of the unions (watch this space for the next pre-Budget report). Questions are being raised from both sides about whether the PSF is really worth the effort: another reason why the unions badly need a positive outcome on pensions.

The Cabinet Office agrees that this issue needs to be at the top of the PSF agenda. 'Finding a way forward on reforming pensions is clearly the immediate priority,' a spokesman told Public Finance. But it also says that the wider challenge for the TUC and public service unions is to 'articulate a vision for modern public service unions, which positions them unequivocally as shapers of change' – a task the Cabinet Office admits is 'not an easy option'.

This role of junior partner in a government-driven public service reform agenda, dominated by the '3Cs' – choice, competition and contestability – is one the public sector unions find none too appealing. 'It's not a question of being against reform, but of wanting to see a more marginal role for outsourcing and marketisation, and a continuing place for bodies like local education authorities,' says Unison national secretary Malcolm Wing.

But he also concedes that the unions have been caught on the back foot when it comes to responding to the government's agenda. 'Contestability is the big question, and it's one the movement is not addressing adequately. We need to put a lot more resources into organising outsourced workers, as well as into more effectively making our case.'

TUC public services officer Rachel McIlroy says the trade union movement 'has not got its head around choice and contestability. But things have come to a head now, and it's being recognised that we need to be more constructive, rather than just being seen to criticise all the time.' A task group has been set up, under the umbrella of the unions' Public Services Liaison Group, to look at the 'big issues'.

All this is, of course, light years away from the 1960s and 1970s, when the unions were a 'fifth estate' and a force to be reckoned with; an era when Labour prime minister Harold Wilson famously told engineering union leader Hugh Scanlon, in the middle of a wages battle, to 'get his tanks off my lawn'. These days the unions have neither tanks nor big battalions with which to press home their claims, something Johnson, Gordon Brown and other ministers will be well aware of as they address the conference next week.

At its height, in 1979, UK union membership reached 13 million. But over the following two decades the unions lost 5.5 million members, the result principally of a radical shake-out of the manufacturing industry, and successive rounds of legislation designed to curb union powers. Today only 29% of employees belong to a union, fewer than one in five in the private sector, though still three in five in public services.

However, as London School of Economics industrial relations professor David Metcalf points out in a recent Work Foundation paper, British unions: resurgence or perdition?, public sector trade unionism has kept its end up largely due to the substantial rise in public service employment since 1997. With the squeeze on public finances, this situation is coming to an end. In any case, union 'density' in the public services – the proportion of union members to jobs – has continued to decline over the same period. In fact, says Metcalf, despite a generally less hostile climate for the unions than in the 1980s and early 1990s, overall membership has remained stagnant and density has fallen by 2%.

No wonder the movement is going through a period of intense soul-searching, with modernisers pitched against traditionalists in a battle over how best to survive. Next week's Congress agenda reflects affiliates' concern at the unions' failure to reach out to new, particularly, younger workers, and to the 'free riders' – employees covered by collective agreements, but not in a union. The TUC's organising academy, Unions21, and other initiatives are all, in different ways, trying to address the 'what are we here for?' question – but are struggling to come up with convincing answers.

David Coats thinks it's all about making the unions more relevant to today's workforce. 'The old “insurance policy” function is no longer enough – just saying, join us and we'll help you out if you have a problem. In the modern labour market, you've got to offer initiatives on lifelong learning, career development, gender equality and flexibility, and do it in partnership with the employers. The unions that are doing this successfully are growing, both among low-paid, low-skilled women workers and highly paid professionals.'

Could this be what ministers mean by 'shaping change'? In the conference hall and fringe meetings, along Brighton's windswept seafront, the debate will continue. A movement battered and bruised, and in search of a purpose – but still making waves, and not yet all washed up.

The TUC Congress will take place in Brighton from September 12–15

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