Steve Richards: Mr Brown has his own ideas for the public services, and the unions won't like them

He might as well hold a placard above his head: 'Vote for me - I am not marching to the left'

Gordon Brown must be getting exhausted. In his Mansion House speech last night, he attempted to prove once more that he would be no soft touch as the next Prime Minister. There is a familiar pattern. An extreme Blairite, a leading Tory or parts of the media warn that Mr Brown will move to the left and lose votes. Mr Brown pops up to demonstrate that he is more damned tough than his weak-kneed critics.

Last night he declared support for the renewal of the Trident nuclear programme, and called for the reforms of public services to "broaden, deepen and intensify", which made the prospect sound like a particularly violent massage. He might as well have stuck a placard above his head: "Vote for me - I am not marching to the left".

Mr Brown s desire for broad, deep and intense change to the public services is repeated often and kept deliberately vague. Yet the Chancellor does not make statements for the sake of it. He might take part in contrived and embarrassingly unconvincing media stunts, such as inviting a Sunday newspaper to report him watching an England World Cup match, thereby highlighting clumsily the Scottish question rather than addressing it. He would not make promises about introducing further reforms to the public services without intending to do so.

In which case, what will he do? Publicly and in brilliantly forensic detail, he has highlighted the limits of markets in some public services. He knows also the narrow boundaries of the choice agenda. This leaves space in one relatively unexamined area of the public sector: pay and the potential for savings and productivity gains that could arise as a result of reforms. Moves into such an explosive area would test Mr Brown's relations with the unions, which are already more complex and multi-layered than widely realised. There are signs that he is contemplating making such a move. If he were to do so, he would be seen to be distinctively tough.

The current state of relations between Chancellor and unions is slightly misleading. Disillusioned with Tony Blair, the unions eagerly await Mr Brown. More of a Labour Party man than the Prime Minister, Mr Brown has a rapport with some union leaders. This has led to speculation, not least among excited Tory strategists, that a Brown government would be a pushover for the unions.

Not for the first time Mr Brown will disappoint the Tory strategists. I would not be surprised if at times union leaders express a yearning for the Blair era as they adapt to Mr Brown's version of "reform". I doubt if they will regard the deep and intense changes as the equivalent of a comforting massage.

Mr Brown's relationship with the unions has been tense from the Government's early days. One of the first missions of his press secretary, Charlie Whelan, was to brief that the new government was not going to "blow" valuable investment on big pay awards and the unions better get used to the idea.

In the autumn of 1997, I interviewed the general secretary of the GMB, John Edmonds. He had not got used to the idea at all. The not inconsiderable Edmonds ego had been far from flattered by his visits to the Treasury. Mr Edmonds had got the impression that Mr Brown was not very interested in what he had to say. He had found Mr Blair more willing to listen, or perhaps to show that he was listening.

In relation to pay and flexibility, Mr Brown has always had a tough message to unions. One of the great myths is that the Chancellor becomes a socialist when he speaks at the annual TUC conference, telling his audience what it wants to hear. Recently I looked back at his speeches at these gatherings and each one has more or less the same message about the need to restrain public sector pay and the virtues of flexible markets.

Indeed, parts of the media are thrown each year by their own mythology. As the audience gives a restrained response, correspondents pop up to observe wisely that "against expectations the Chancellor delivered a tough message". It might have been against their expectations, but he has always been tough in relation to these particular themes.

This was also the case in relation to senior Brownites at the left-of-centre Compass conference at the weekend, which has been portrayed by those that did not attend as a socialist love-in. In his largely misreported speech, the Treasury minister, Ed Balls, stated explicitly that flexible labour markets were a necessity in a globalised economy. Mr Balls did not state merely what parts of the audience wanted to hear, and as a result got a subdued reaction from some of those attending.

How will relations between Mr Brown and the unions be tested in the future? There are some illuminating clues in recent and past speeches. Once more a few weeks ago Mr Brown warned of the need for restraint in public sector pay.

In his Budget that coincided with the fall of Saddam in the spring of 2003, Mr Brown raised the possibility of far greater regional pay variations to take account of differences in the cost of living. That must have been the least reported Budget in history, as misguided optimists hailed the end of the war against Iraq.

No one noticed the actual policy announcements, let alone the tentative proposals. Still it was there, and becomes more relevant as the disparity in the cost of living grows in different parts of the country. In more generalised ways Mr Brown has expressed an interest in public sector pay taking more account of delivery and performance.

Such reforms would serve several purposes. Most important of all, they are long overdue. Symbolically, the sweeping changes would expose the silly claims that Mr Brown is "anti-reform".

The unions would not approve of such changes, but this would not harm Mr Brown politically as he seeks to escape from the vote-losing caricature depicted by a range of different sources. The unions have no other candidates in whom to place their hopes

In advance of a leadership contest and afterwards, they will not want to cause much trouble in the build-up to a general election. David Cameron hails the virtues of the public sector because he needs the votes of those who work in it, but there are no enlightened policies to accompany the melodious tunes. The unions will want a fourth Labour term and they recognise that on other fronts Mr Brown shares their aspirations.

The Chancellor embarks on a nail-bitingly precarious path as he seeks to rebuild a coalition of support for Labour. I can see many dangers ahead for him as he signals approval for Mr Blair's agenda on policies such as the renewal of Trident and yet seeks to show at the same time that he would be different. A skirmish with the unions over a new agenda for public services is one of his safer options.

s.richards@independent.co.uk