Previous attempts to introduce such legislation have foundered because of the difficulty of defining essential services and the prospect of widespread protest strikes.
However, sources at the Department of Employment say that Mr Portillo is determined to introduce tougher rules on industrial action in at least some areas of activity. Officials believe that the new Secretary of State would have sought new legislation even if there had been no serious strikes, but that the action by signal workers had provided the necessary 'excuse'.
Mr Portillo is particularly keen to ensure privatisation of the rail industry goes ahead smoothly and investors are not deterred by the prospect of dealing with militant unions.
The Government's renewed interest in clamping down on industrial action comes on the eve of the 14th stoppage by signal staff who will be on strike for 48 hours from noon today. Railtrack, their employers, said yesterday that around 45 per cent of the network would be running and British Rail predicted that there would be half the normal services.
In a survey of 300 of its members, the Institute of Directors (IoD) estimated that the signal workers' action had cost British industry pounds 180m, and that the impact was especially serious in the South of England.
The institute warned that the longer the strikes continued, the more likely it would be that business would be transferred from rail to road - increasing the pressure on Mr Portillo to overcome the practical difficulties of banning strikes in essential services.
Ann Robinson, the head of the IoD's policy unit, said the results of the survey showed that the industrial action was imposing considerable costs on business. 'It is now time for the Government to prevent strikes like this happening in future,' she said.
Dr Robinson also called for a system of binding arbitration to settle disputes in key services, although Mr Portillo may have difficulty in reconciling such a mechanism with the Government's policy of freezing public sector pay bills.
The institute pointed out that most other countries had procedures for restricting strikes in certain areas. Mr Portillo should complete 'the unfinished business of trade union reform'.
The IoD said 60 per cent of directors had used alternative methods of working on strike days to keep their businesses running, including home working, changing holidays and altering shifts. Almost one in 10 had provided alternative transport for their employees; Barclays Bank had spent more than pounds 100,000 on providing coaches for 800 of its staff who work in central London.
About one in three directors in the South of England described the impact of industrial action on their businesses as serious, and a small number had switched their custom permanently from rail to road.Reuse content