BBC On The Record - Broadcast: 03.11.02

Film: PAUL WILENIUS reports on how the recent increase in trade union militancy is straining the Government's relationship with business.

JOHN HUMPHRYS: The trade unions in the public sector have been getting more and more stroppy in these past few months. The Fire Brigades Union is only one of them saying: they want much more money and better conditions. Everyone remembers the so-called bad old days of the seventies and wonders whether we might be heading in that direction again. Certainly the bosses are getting nervous. They're warning the government that they're going to have to stand firm... or else. Paul Wilenius reports. PAUL WILENIUS: Well before breakfast, the working day's begun for successful businesswoman Sarah Anderson. She runs her own employment agency. John Davis hasn't got a job, but he treats his daily tasks as if he had. At dawn he's off to the picket line, as he's done every day since he was sacked. Union leaders wants new laws to protect him. Yet business leaders are worried this could hurt people like Sarah. One of new Labour's greatest successes was shedding its pro-union image and becoming more business friendly. Yet here at the headquarters of the CBI, Britain's biggest business organisation, doubts are starting to grow over the direction of the government. They're worried that the rise in militancy could force ministers to give ground to the unions over public sector pay, European employment rules, and more rights for workers. DIGBY JONES: If the government actually start to accede to yet more union demands, in the boardrooms of Detroit and Seoul and Tokyo and Johannesburg, overseas investors will start to say, aye, aye, who's running the country? Is it the democratic elected government or is it trade unionism? WILENIUS: John's one of eighty-seven workers sacked by the boss of the Friction Dynamics plant in Caenarfon, which makes clutch and brake linings. They all lost their jobs, one day after the eight week legal strike protection ran out. Eighteen months later they're still on strike . JOHN DAVIS: It's been very hard financially and health wise for all the families. Cash wise it's been very hard because all we've been getting is forty-seven pounds a week from the union - strike pay. A picket line is one of the loneliest places in the world. You can be standing here day in an day out. As you know we're here twenty-four hours a day, day and night. It's open exposed wind rain, sun, we get all the elements here. And when it's pouring down with rain morale can be very low. WILENIUS: John belongs to Tony Blair's union, the Transport and General. It's just one of a number of voices demanding a re-balancing of the country's employment laws, so that they give a fairer deal for workers . GEOFFREY ROBINSON MP: The immediate pre-'97 election period and immediately after that, there's no doubt that the pendulum probably swung a bit too much in favour of industry. as it was bound to do as we tried to find the balance, we had to first redress it. DEREK SIMPSON: Well I do think that Mrs Thatcher's laws should be confined to the dustbin of history. I think they did no service whatsoever, they certainly changed the balance, the pendulum swung very much in favour of employers. WILENIUS: The firemen's dispute is the darkest cloud so far on the industrial relations horizon. The firefighters want a forty per cent pay rise, with no strings. The Deputy Prime Minister has been dragged into the pay talks. It's reported there's already sixteen per cent on the table. However, a string of high public sector pay awards like this, could swallow up a large chunk of the government's big public spending programme. ALAN JOHNSON MP: We're determined that that will not happen, but we're determined to work with the unions as the Prime Minister said at party conference, to work with the unions to improve public services, they have the ideas, the experience, and in terms of how we channel this money through, their input is going to be essential, but it cannot be and I think the unions understand this, it cannot be a situation - it cannot be right to channel that money purely into wages and conditions. DIGBY JONES: Our message to this Labour government is they must stand firm at this very crucial moment for the British economy and for the future of the country. One because it will be inflationary if they gave in to these enormous awards without it being matched by productivity. And they've got to stand firm because actually they were not elected to give in, they were elected to deliver better. That needs more money but it needs reform. And I think the country itself is actually watching to see how this one plays. WILENIUS: Sarah's also watching the government. She's concerned by the growing mountain of red tape she has to deal with in her business. She doesn't want to be burdened with even more bureaucracy. Together with the CBI she's against the government applying a new European directive on information and consultation to a small firms like hers. It could have a big impact on many businesses. JOHNSON: Well we're having a discussion at the moment about how information and consultation will work in this country, we signed up to the directive in June 2001 having ensured that it was not a one size fits all directive. We always made it plain that we agreed with the principle of informing and consulting workers. It's become an issue because workers at Vauxhall for instance heard they were being made redundant over the radio. That's wrong, that shouldn't happen. We will look at that aspect in terms of redundancy, we will clear some of the myths that are around at the moment. WILENIUS: Sarah's off to see one of her larger clients. Indeed, it's many of the bigger companies who are most worried. Under the directive they'd be forced to keep their staff informed, especially when they hit stormy economic weather. The man who negotiates with many of the UK's largest companies gives it total support. SIMPSON: I think we should implement the European directive in full. I mean we're part of Europe, we're being told that that's where the destiny is, that's where we have to be, so what's the equivocation about European legislation in this matter? WILENIUS: Sarah is not the only one who thinks her business needs less, not more regulation. Her fears are shared by the CBI. They argue that if the directive is imposed in too heavy handed a way, it could harm the economy and the country. SARAH ANDERSON: The challenge of regulation now is just phenomenal, there is both regulation in the pipeline, there's regulation that's taken place that's particularly hit our industry. DIGBY JONES: The impact of a poorly implemented information and consultation directive, would mean that firstly businesses would actually think that employing more people isn't worth it. Secondly, they would actually have to implement it in a way that is awful for the moral of a workforce. I mean imagine being told we're going to lose a load of jobs in the next six months, I can't tell you who it's going to be, but over the next six months I just want you to worry yourselves, while we go through what this Brussels' directive has told us we've got to do. ROBINSON: What I'd say to businessmen who say we want a light touch or we don't want a review is that's too negative, we live in a dynamic world, things do change, attitudes change and we have to accommodate ourselves to what comes out of Europe. WILENIUS: On the picket line in Wales, John and his colleagues believe they're the victims of bad employment rights laws, which have left them sacked and locked out of their own place of work, for so long. The TUC backs them, and has put in a twenty-three thousand word submission to government designed to stiffen their resistance to the business case. BRENDAN BARBER: I complain that too often they listen too much to some of the bleating voices from employers about how difficult some of these changes have been. And I'd like to see them be bolder in taking forward a positive agenda for employment rights at work. There's some unfinished business. When the Employment Relations Act was carried through, it was recognised then that we were going to need to look at how some of the provisions actually operated in practice. In particular the new arrangements for Trade Union recognition. And we think the first couple of years or so of seeing those provisions in action has demonstrated that there are a number of ways in which they can be improved. WILENIUS: Ministers would like to take the heat out of this contentious debate and get both sides of the nation's industry to agree a way forward. But there's little chance of that. The unions are expecting action from a Labour Government, while business leaders want them to do nothing which would damage the economy. JOHNSON: Well we said when we introduced the Employment Relations Act that we would review it after three years. We are reviewing the Act, not things that weren't in the Act, not things that people wanted in the Act but couldn't get in the Act, we are reviewing the Act and how it's operated over the last three years. Now the TUC's submission is quite long, that's nothing new, probably the CBI's submission will be equally long. JONES: We've been asked for our views on this review of employment legislation and our review response is very short but very meaningful and that is, leave well alone, let it bed down and actually review it and do nothing. WILENIUS: Ministers are working with and listening to the unions and the TUC more and more recently, with the support of many in the Labour Party. However, Tony Blair's advisors are very wary about being seen to be getting too close to the unions. They fear that business leaders are getting increasingly worried, that this could signal a return to the bad old days. JONES: When I saw a few weeks ago only what was it thirty per cent of the tube drivers actually voted for a strike, and then it paralysed eight million people. Well when a minority driven on by a militant leadership can cause misery to millions of people and put up a big sign that is adverse to the interests of the country in those markets where we operate, I have to say you do worry about whether we're heading off towards the discontent of thirty, thirty years ago. And that would be seriously damaging to everybody in Britain. SIMPSON: Now I'm still waiting for a government minister to stand up and say, well Mr Digby Jones just like they would do with Bob Crow, Arthur Scargill or anyone: you're talking like an idiot, you're an extreme representative of an narrow band of people, i.e. the employers with a vested interest and I'm sorry we're here to govern for the people. The people in the main are many, many thousands and millions of trade unionists, not just a few, handful of very rich powerful people with the influence of the CBI. JONES: It doesn't help when you see Derek Simpson saying publicly, he's going to give the democratically elected leader of this country a F-ing migraine. How do you think that plays in a boardroom in Detroit, or Tokyo or Soul, which is where investors in this country, wealth creators in this country, job creators in the country make their decisions? And they do start to think, oh yes, are we going back to the bad old days. WILENIUS: For John, these are the bad old days. For Tony Blair, there's little doubt he's got real trouble ahead from the unions, unless he does more to keep them happy. But the more he pleases them, the more he upsets industry and the more he risks waving goodbye to his hard won special relationship with big business.
NB. This transcript was typed from a transcription unit recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.