Blair rebuffs unions on jobs

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The Independent Online
TONY BLAIR brushed aside demands yesterday for a change of economic policy to meet growing concerns about manufacturing industry.

The Prime Minister's official spokesman, speaking before union leaders met him at 10 Downing Street, insisted that the "fundamentals of the economy are sound".

He said the Government's decision to "take the politics out of interest rates" had been correct and that ministers would not rein back the independence of the Bank of England's monetary policy committee.

Mr Blair's aides said that union leaders who attacked the Government's economic policy should compare its record with that of the Conservatives in the early 1990s, when interest rates were 15 per cent and inflation 10 per cent.

Mr Blair later told employees' leaders that he understood business concerns, but that the Government's priority remained long-term stability, and that required a disciplined policy toward inflation.

Union leaders leaving the meeting in Downing Street last night made clear that they had got little change out of the Prime Minister.

John Monks, the TUC general secretary who was head of the union delegation, said: "He was forthright in his views and we were forthright in ours."

The clear difference of opinion means that the economy is likely to be the main issue at next week's TUC Congress and two weeks later at the Labour Party's assembly.

Anxiety over manufacturing was brought home to Mr Blair at the end of last week when Fujitsu, the electronics company, announced the closure of its plant in the Prime Minister's Sedgefield constituency with the loss of more than 600 jobs.

After the meeting, Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said the Prime Minister gave the TUC delegation the impression that employees' representatives were attempting to talk the economy into recession.

"I suppose you would say he gave us a bollocking in a nice kind of way," he said. Mr Jackson said the unions' message to Mr Blair was that 250,000 jobs were at risk unless there was immediate action.

The monetary policy committee, which meets tomorrow, had "one last chance" to prove that it cared about manufacturing industry by lowering interest rates, he added.

Roger Lyons, leader of the Manufacturing Science and Finance union, said the delegation made clear that the Government should make greater efforts to understand the problem of manufacturing industry.

News Analysis, page 13

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