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Gary Younge
Tolerated, at best

It was by all accounts an impressive speech - well pitched, well written and well delivered. In fact the only thing you could not say about it was that it was well received. It was not badly received. There was no hissing, booing or heckling. But no one was going wild in the aisles either. The applause was polite. Some got to their feet at the end but most did not. And those who did stood in dribs and drabs, an afterthought offered in respect, rather than rapture.

Coming less than a month after Labour's commanding victory, it was a salient illustration of how the unions have come not so much to support a Labour government as to tolerate it. For the past decade or so the party has been distancing itself from what was once called its "industrial wing" because it feared it had become an electoral liability. At the beginning of the second term, union leaders are beginning to think that, in the interests of self-preservation, it might be wise to respect that distance.

Six weeks ago the delegates at a Fire Brigade's Union conference vowed to support candidates who stood against official Labour candidates. The champagne was barely flat at Millbank before Dave Prentis, the leader of the largest public service union, Unison, warned: "If Labour thinks it has been given a mandate to go ahead with further privatisation of public services, then it had better think again." It was a threat he repeated at a conference of Labour activists over the weekend. Bill Morris, the leader of the TGWU, opened last week's conference with some predictable praise followed by harsh criticism of everything from vouchers for asylum seekers to pensioner poverty.

During the first term, these were the kinds of criticisms the government would have relished as evidence that they were taking on the "forces of conservatism" and vested interests in the labour movement. Defined more by what they had abandoned than what they had gained, New Labour actively went in search of worthy adversaries. Following one budget announcement, Charlie Whelan, the chancellor's former press secretary, called one union leader to ask whether he would complain.

The second term already looks very different. If Tony Blair went to the polls with humility he has emerged from his victory feeling bullish. Since the election he has fallen out not just with the unions, but disabled people, doctors and his own backbenchers. Not bad for a month's work.

So far the showdown with the unions has been prompted more by cock-up than conspiracy. New plans for including the private sector in public services have proved vague and contradictory. Last week Alan Milburn was forced to correct a statement from his most senior official, who suggested the private sector could help to rescue failing hospitals. A few days earlier schools' minister Stephen Timms, suggested private sector operators will be able to run departments within state secondary schools. In both cases the unions whose members would be affected were astonished and annoyed. It wasn't so much that the party had gone out of its way to marginalise them. It simply hadn't thought they were worth consulting at all.

Whether through conflict or consensus, this will have to change. Blair needs to deliver on public services. It is here that the unions are strongest. On average, 60% of employees in the public sector belong to unions, compared to 19% in the private sector. It is also where they are most popular. If he chooses conflict, the unions will have no choice but to fight back. Their members would not let them get away with anything less. And if tube privatisation is anything to go by, then they will have the support of the public too.

Once again, as was the case with pensioners and the cut in benefits for single parent families in the last parliament, the Labour government is proving itself unable, or unwilling, to read the nation's political temperature. It ignores the shift in popular attitudes that is far more concerned by fatcat pay, privatised incompetence and the threats to health and safety they bring, than by the remote prospect of a massive revival of the unions.

For unions are not the easy target they used to be. Despite a recent rise in membership, trade unions have suffered a precipitous decline in the past 20 years. But, whether consequently or incidentally, their standing among the public has increased. According to the British Attitudes Survey, the number of those who thought unions had too much power plummeted from 54% to 15% between 1985 and 1996, while the percentage of those who felt they had too little more than doubled. They appear to have understood that the unions' role does not just stop at the interests of their members, but extends to the civil society at large. The most vibrant debate at the TGWU conference was over asylum seekers - most of whom by definition could not possibly be members as they do not have the right to work.

Unions now have the potential to build alliances not just with each other, but with anti-racist movements, ecologists, feminists and the new wave of anti-globalisation protesters. To do so would present a challenge to their traditional, ponderous structures and culture, but would bring with it the opportunity of a wider, more diverse and more dynamic support base which could form a powerful opposition outside parliament.

None the less, Mr Blair's insistence that he will do what is right rather than what is popular is an admirable trait. If only he would use that resolve to take on the right over asylum seekers, we would know that he meant it. Similarly his desire to embrace what works rather than what suits ideologically would hold some appeal, if it put patients in beds, nurses on wards and teachers in schools. As the unions point out, the trouble is that all the evidence suggests that it won't. Once again, if he applied the same logic to the railways which clearly do not work and pledged to renationalise them, we would feel assured that it was not an argument of convenience. Say what you want about Tony Blair, he did not make the trains run on time.

Such consistency would provide the legitimacy that the government seeks to pursue its agenda. Without it one cannot escape the conclusion that the New Labour project is not about challenging the established dogmas of the left; it is about entrenching the dogmas of the right. The unions are uniquely positioned to block their path. To do so would not make them Labour's greatest liability, but its greatest asset.

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