Peter Mandelson – 1998 Speech to TUC Conference

Below is the text of the speech made by Peter Mandelson to the 1998 TUC Conference.

Thank you very much for that welcome. May I say that this is a very poignant moment for me indeed. I was one of the TUC’s brightest eyed young staffers when, 20 years ago to the month, I attended Congress. I will always be grateful to the TUC for the introduction it gave me to the world of trade unions, to practical politics, and to the values of systematic filing. Those were the days when I thought of John Monks as my boss. You can all take comfort from that. Old habits die very hard.

Then too another GMB General Secretary, the leader of my own union, was President of Congress, David Basnett, a man who had a similar reputation for choosing his words very carefully.

Then too there was a Labour Government and the Prime Minister came to address us, and you will be relieved to know that I am not going to take a trip down memory lane by trying to sing you a music hall ditty as he did, but those were times when you had to keep your spirits up.

In the mid 1970s an economic whirlwind of unprecedented ferocity had hit the world economy. The labour Movement faced that whirlwind with great fortitude and great solidarity. Inflationary collapse was averted. Unemployment began to fall. But, as the fatal winter that followed that Congress was to prove, Labour’s achievement was fragile. Tony Blair is determined that in the 1990s we will not repeat the mistakes of the 1970s. No one in this hall ‑‑ not you, not me ‑‑ will complain at that.

This Labour Government has good relations with the trade unions, but there is a key difference with 20 years ago. Those relations are now not too close for comfort. Today we have dialogue, good dialogue, but not under any duress. We should be able to agree and disagree without either being in hock to one another, or at risk of falling out — a mature practical relationship based on shared values and a shared agenda.

For example, we both believe that a workplace, based on mutual respect and minimum standards of protection, safety and consultation, is one which works better and more productively. That is why we have signed the Social Chapter, why we are introducing the national minimum wage, and why we are implementing the Working Time Directive without delay. It took a Labour Government to make these momentous changes, a New Labour Government.

The Fairness at Work legislation will be the central building block of this legislative package. This legislation will not turn the clock back to the days of strikes without ballots, flying pickets and mass actions. None of us want that; nobody is calling for that. What it will do is demonstrate that it is possible to have flexibility in the workplace, and to treat people well. Be under no illusion, these are controversial changes for which we still have to argue and win the case, particularly in light of the growing pressures on British business, but argue for it I will — for legislation that is seen by all to be fair and to be balanced if it is to win enduring support, as I am confident it will do.

To support this, to do this, I can think of no better ally than Ian McCartney to help me take this Bill through Parliament. You all know Ian McCartney very well. When I arrived at the DTi I will admit to being a little worried about Fairness at Work and I called Ian in to talk about it. I said “Ian, you know, it is a tall order this Bill” and he said “Don’t worry, Peter, I will make short shrift of the critics”. This reassured me enormously. This Bill will strengthen partnership at work. In today’s economy partnership is key to competitive strength. Britain is in a non‑stop race to boost that strength, to create comparative advantage, to add value ‑‑ all against the background of our current economic difficulties.

I understand the concerns that are being expressed about the level of the pound. We are all well aware of how tough life is out there, particularly for manufacturing industry and for exporters. Nonetheless, John Prescott was right on Monday to say that we should not talk ourselves into recession. Employment is not going down. The economy has generated over 400,000 jobs since Labour came into office. The Government’s policy for Britain is clear: a strategy for stability amidst instability in an uncertain world; a commitment to end once and for all the dismal record of stop‑go, and of boom and bust, the roller coaster of economic activity that has so damaged confidence and investment in the British economy over the past two decades.

This is why we have taken the politics out of interest rates by vesting authority in Eddie George and his colleagues at the Bank of England. That is why Gordon Brown has taken the necessary tough action to clear the Tories overdraft and to put the public finances back on track. Gordon’s is not an enviable job. He puts the interests of the country before those of any pressure group. He has the honesty to say “no” when others are tempted to let it be known that they might have said “yes”. I fervently believe that we will reap the benefits of the tough but wise decisions he and the Government have taken.

Nobody is saying it will be easy; it won’t. Asia, Japan, Russia, Latin America, jitters on Wall Street, collapse of the real economy in Indonesia — we face constant reminders that we live in a global economy. What effects one country affects us all. There is no magic fix of Government intervention or extra money that can solve these problems.

That is why economic cooperation between countries has never been more important than now and why we must strengthen Britain’s position in Europe, now our natural home market. On Europe the people who threaten to cut Britain off from this home market are the leaders of today’s Tory Party with their head in the sand policy on the single currency.

Congress, in yesterday’s debate you proved yourselves far more sensible than them. On this issue, Government, business and unions are at one and we are working in partnership in Europe. Now, at the DTi I know that John Monks believes that my new role is actually the first real job I have had since leaving Congress House. I would not go that far but the job is certainly a real challenge. Some have scoffed that under the Tories the DTi was the Department of Timidity and Inaction. Under my leadership I can tell you, no more. My mission at the DTi is to use all the tools at our disposal to strengthen industry, enhance business performance and to create an environment in which enterprise flourishes.

Britain can do better — much, much better. As a nation we have a world class science base. We have talent and creativity galore. What we lack are the entrepreneurs to turn these natural strengths into products and services that customers want. We must overcome these weaknesses. For unless we do, Britain will never succeed in exploiting the potential of the knowledge based economy of the future. In that knowledge based economy scientific discovery and technical progress will reach more directly and much more swiftly into every aspect of our lives. The key to competitive success will lie in the exploitation of knowledge for commercially profitable ends, as much in manufacturing as in services. In the knowledge-based economy, the increasing reality of liberalised markets and open trade will destroy the tradition sources of competitive advantage. Once that stemmed solely from the skills and techniques of production. Now it depends much more on the creativity that surrounds it; the know how that dreams up new ideas; the innovation that brings forward new products and the marketing that builds new brands.

In this new world, Britain has a simple choice. To move with the times or be swept away by them. My clear view is that we must make change our friend, not our enemy. That is how in simple terms I define the mission of my department. It is a task in which I want your full support; because together we can put the future on Britain’s side.

But I know many of you in this hall will have an even bigger question at the back of your minds. “Where do you think, Peter, the trades unions fit into your bright, knowledge-based vision of the future? I can be very clear where I stand. I believe in trades unions, not just for reasons of sentiment – though when your first job opportunity was working for the unions, that sentiment is real enough – not just either because I will always remember how the trades unions helped Neil Kinnock save the Labour Party in the 1980s, just as in my grandfather’s time the trades unions saw the Party through the upheavals of the 1930s.

No, it is much more than sentiment. For millions of people, trades unions are both relevant and necessary in today’s world. The relationship between employer and employee is by its nature a fundamentally unequal one, one that the unscrupulous employer can exploit.

We all know that individuals at work still need the protection of trades unions against the arbitrary abuse of management power. We all know that a good relationship between trades union representatives and an employer can help to promote flexibility and productivity at work. Yes, I believe in trades unions. It is precisely because of that belief that you will always get from me honest, straight talking and candour. No grandstanding, no playing to the gallery, no more spin, honest.

Let me set out my vision of the role in society which I sincerely believe the unions can and should play.

Friends, a new economic future is beckoning for us in this country. For industry, it means adaptability, willingness to change, flexibility of working and a constant drive to modernise. If the trade unions want to be part of that future, then it means the same thing for you. In the 1980s the debate raged about whether the trades union were too strong or too weak. For some, that is still the dividing line. That is not a choice I accept, or one that the Government accept. For us the choice is between modern trades unions and those which are frozen in time, between effective trades unions and ineffective ones. I want to see modern unions working with successful companies in shaping Britain’s future.

I recognise that the trades unions have already made huge efforts over the years to change and modernise. Modernisation through the New Unionism project and the Organising Academy which is bringing a modern, business-like approach to the unglamorous but vital role of recruiting new members. I recognise that in many companies industrial relations have been transformed from the old-style battlefield of “them and us” to the new-style of co-operation in achieving shared success – shared success.

Good managers and good trades unionists have been responsible for that transformation. They need each other. But that modernisation and transformation must go further still. Indeed, if my analysis is right, it is never ending. I realise that this is not an entirely welcome message in a hall where in the past two decades so much painful change has had to be swallowed by so many. I know that to some of you I am seen as a non-stop moderniser, hell bent on change at any cost. I make no apology. I passionately believe that modernisation is essential in the trades unions’ own interest.

I saw some staggering statistics the other day. Only 6% of young employees are members of trade unions; only 18% of employees under the age of 30. The density of trades union membership is lowest in the fastest growing sectors of the economy. Of course I accept that there are rogue employers who actively discourage trade union membership, but for too many people trade unions appear only marginally relevant.

Many companies have built honest and credible partnerships with their employees with no involvement by trade unions at all. And if employers and employees are content with that, it is not the job of government to order them otherwise. Of course, it is not. As trade unions you can make the difference yourselves. To meet fully the challenge of modernisation, I suggest that you need to focus on three key areas.

You need to focus on delivering quality services to your members; helping achieve employers’ success and being seen as responsible to the general public.

First, delivery on behalf of your members. You are absolutely right to have put the emphasis back on what your members really care about – protection against arbitrary management behaviour or discrimination; fair levels of pay; safe working conditions; a pension to look forward to and the other essentials of decent conditions of employment. If together the trade unions and the Labour Party learnt one lesson from the 1970s and the 1980s it was the imperative to respond to the needs of individual members, not a vocal minority.

Trades unions cannot rely, and should not, on governments to deliver them a bigger membership. Unions have to win their position by demonstrating their value to members and potential members, but the Government do have some role in helping unions to represent their members in the most effective and most constructive way.

For example, in the Fairness at Work White Paper we said we intended to set up a Partnership fund to promote best practice in employee relations and their involvement.

You will be pleased to hear that I can today confirm that we are going to establish such a fund. Money will be made available for a series of projects to give employers and employee representatives a much better understanding of the challenges each face and what can be achieved by working together as companies like Tesco, Boots, Unisys, Blue Circle and European Gas Turbine are doing.

Working in partnership with employers brings me on to my second point: the need to focus on employer success. No union benefits from harming the companies its members work for. In the private sector that means actively working for and welcoming profits. In the public sector it means delivering ever better services of higher quality.

By the way, contrary to what you have read in the newspapers, no decisions have been taken to privatise the Post Office.

Congress, success in the public or private sector means awareness of labour costs. No one now deceives themselves that we can compete on costs regardless of quality. So no one should deceive themselves that we can compete on quality regardless of cost. It means sharing in the company’s success but also showing moderation in wage demands and flexibility in pay levels in times of economic difficulty. I say this every bit as much to company boards and to their directors as I do to trades unionists. By all means enjoy the rewards of success in the good times, but make sure those rewards are merited and make sure you are willing to share pain in the bad times, too.

The third test is being seen to be responsible to the public. I believe that unions have an important role which extends beyond the workplace. Trades unions are a force for good in our society in setting workplace minimum standards; in ensuring adequate health and safety; in promoting training and skills and in pressing for proper provision of pensions and other benefits.

Any responsible Government should always listen to what the trades unions have to say in these areas for they are unique in their ability to bring to the consideration of public policy the voice of direct workplace experience. The Government want to work with you in all these areas. We did on the National Minimum Wage. We have done so through the Skills Taskforce. We are doing so on the Competitiveness White Paper, and we shall do so in the development of the stake holder pension. I want to work with the trades unions.

But the extent to which the unions have a voice that carries influence and respect will always depend on the credibility and persuasiveness that unions themselves can command. That means co-operating in the modernisation of public services. It means working with us in forging other reforms, in the welfare system, in the schools and higher education, in de-centralising government. Above all, it means not attempting to veto change but embracing it and helping to manage it in the interests of all.

Tony Blair’s Government will never be a soft touch. We will do our duty whatever. We will never again contract out the governance of Britain to anyone, not to the TUC or its member unions, any more than we would to big corporate interests either.

As far as my Department is concerned, there is not a front door for some and a back door for others. There is one door for all – and it is always open.

Congress, the choice is yours – opposition or legitimate influence. I know my preference: it is for trade unions that draw increased strength from being modern, democratic, representative and influential, that day in and day out prove their relevance to their members, that match realism with responsibility in their dealings with employers and government. I believe that in working together in this way, we will not only generate respect for each other but that the unions will succeed in reinvigorating the public esteem they merit.

Take it from me. I know a little bit about public relations and improving images. So much so that one of these days I might even be able to do something about my own. But I am told that it will probably take me more than 48 hours in a week to do so.

Imagine depends on substance. Public relations will not succeed unless there is something real behind it. Trades unions do have the basis of such genuine appeal; a believe in social justice, an understanding of the real world, an ability to get to grips with practical workplace issues, a commitment to democratic methods and a willingness to co-operate.

That is not just a platform, it is a springboard for the trades unions. In leaping ahead to the new unionism demanded by economic change and by your own members, I can assure you that you will have my backing and that of the department I head.

I have battled for years for an electable Labour party. I am now battling for a successful country, strong in services and manufacturing, generous at home and abroad, with acclaimed public services and a dynamic private sector.

Congress, join me, please, in the battle for success.

Thank you very much.