TUC Conference: Industry - Mandelson denies Post Office sell-off

PETER MANDELSON offered unions a choice between "opposition and legitimate influence" yesterday and seemed to rule out privatisation of the Post Office.

In his first speech since becoming Trade and Industry Secretary, he warned the TUC conference in Blackpool that the Government would "never be a soft touch".

Derek Hodgson, general secretary of the Communication Workers Union, took Mr Mandelson's announcement that "no decision had been taken to privatise the Post Office" as an indication that it would remain wholly-owned by the state. He said that private conversations had reinforced that view. It is thought, however, that there is a continuing rift in the Cabinet on the Post Office issue.

Mr Mandelson, who worked for the TUC 20 years ago, received a polite reception.

John Monks, TUC general secretary, regarded the speech as "encouraging", but there remains deep suspicion in the movement about Mr Mandelson's views. The minister acknowledged that unions had made "huge efforts" to modernise, with the result that industrial relations had been transformed in many companies from the old-style battlefield to new-style co-operation. "But that modernisation must go further still. Indeed if my analysis is right, it is never- ending," said Mr Mandelson.

He believed passionately that modernisation was essential and drew attention to the movement's failures. Only 6 per cent of young employees were union members and only 18 per cent of those under the age of 30. "The density of trade union membership is the lowest in the fastest growing sectors of the economy," he said.

He advised that unions should concentrate on three areas: delivery of better services to members; developing partnerships with employers and welcoming their profits, and working with the government to protect employees and develop public services. Trade unionists had to make the choice between "opposition or legitimate influence". The debate should not be about whether unions were too strong or weak; the choice was effective, modern unions or ineffective organisations "frozen in time".

The Trade Secretary refused to guarantee that the "Fairness at Work" White Paper would be implemented in full. Employment rights legislation had to be seen to be "fair and balanced" to win enduring support.

Mr Mandelson was expected to place a limit on compensation for unfair dismissal, while the White Paper calls for its removal. "This legislation won't turn back the clock to the days of strikes without ballots, flying pickets and mass action. What it will do is demonstrate it is possible to have flexibility in the workplace and to treat people well."