Jobs, not wages, are what really matter to Blair and Brown

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The Independent Online
TWENTY YEARS ago, to mark the end of a nine-week-long firemen's strike Terry Parry, general secretary of the Fire Brigades Union, bought himself a racing greyhound. In honour of the settlement - which linked firemen's pay to the top segment of male manual workers' earnings and which still holds good today - he called the beast Upper Quartile. But then Parry was entitled to his stylish celebration. Not many strikes over pay ended in such unambiguous triumph, even then.

For all the common assumptions routinely repeated about the unbridled power of the trade unions in the late Seventies, the firemen's victory was actually a rather rare event, borne in large part of the unique public popularity deservedly enjoyed by the firemen themselves.

That rarity value was part of what very gradually persuaded the trade unions that their outright hostility to a statutory minimum wage was misplaced. The unions frequently found it difficult to use their collective muscle to deliver on wages at any level; at the lowest end of the income scale, even more so. Yet now that (some) union leaders are complaining that a figure of pounds 3.60 an hour is much too low, it's worth remembering how long and how vigorously many of them opposed the idea of having any kind of minimum wage, high or low.

True, Rodney Bickerstaffe's Nupe, now part of Unison, had long and honourably been in favour. But the Transport and General Workers Union used its block vote, year after year, to ensure that until 1986 the Labour Party conference maintained outright opposition to a minimum wage. Its reasons were dressed up as the ancient doctrine that the state had no place in what used to be called free collective bargaining. The reality was the haunting fear that if workers were entitled to a minimum wage, they might not feel the need to be in trade unions at all.

This fear was largely misplaced. Many of the potential gainers from the minimum wage were employees in small private sector businesses that functioned in a buyers' labour market and and in which unions had anyway been unwilling, or unable, to organise. For such men and women the alternative was not minimum wages or the union, but minimum wages or no protection at all. Nevertheless, misplaced or not, the fear was a potent one.

Yet having missed the point in the 1970s and 1980s, the unions are in serious danger of missing the point again. First, if their intention in attacking the rates recommended by Professor George Bain's Low Pay Commission is to stop the Government tampering with them by being more cautious still, then they are unlikely to succeed. It's a safe bet that the adult rate of pounds 3.60 an hour will be implemented intact. But there is much more doubt over whether the proposal for a differential youth rate of pounds 3.20, confined to workers between 18 and 21, will survive the intense ministerial scrutiny that will continue next week.

There are two views in government. One is that Professor Bain - having been asked by the Government to take into account the case for exempting (or at least fixing a lower rate for) workers between the age of 16 and 25 - has come up with a considered answer, and his recommendations should be followed. But I would be surprised if either Tony Blair or Gordon Brown swallow this argument without testing it to destruction.

The international evidence is that the greatest risk to jobs from the imposition of a minimum wage is among young workers. Whitehall officials have already calculated that the proportion of younger workers affected by the Commission recommendations is well over twice as large as that of adult workers. And this comes at a time when ministers are single mindedly pursuing their goal of ending youth unemployment through the windfall tax-financed New Deal.

If Brown and Blair judge that the proposed youth rate is high enough - or the age range covered by it narrow enough - to jeopardise that particular election pledge, they will put the brakes on and call for an even more restrictive regime for younger workers. But the Commission's union critics could have even more to complain about before the issue is closed.

This is just where those critics risk missing the point. The trade union movement's historic error - which a handful of its leaders are now in danger of repeating - is to equate its own members' interests or worse, its own institutional interests, with that of the most vulnerable segments of society as a whole. Those union leaders who go through the motions of re-iterating demands for a rate of pounds 4.61 ignore substantial evidence that one above pounds 4 would cost significant numbers of jobs - and in the process risk charges that they are hypocritically ignoring the interests of those who are not in unions because they are not in work.

The minimum wage is part of a bigger programme - from Gordon Brown's improved in-work benefits to reduction of national insurance contributions for low paid workers - designed to make work pay. No-one can know yet how will it will work If it fails the Blair administration will rightly be harshly judged. But in the meantime unions should be a little less curmudgeonly about what is a hugely historic step.

From time to time, the Government will no doubt credibly be accused of forgetting the weak at the expense of the strong. That argument won't stick here. If jobs are lost, it will be the weakest, core voters even, who will suffer most. Socialism - or even social justice - isn't by definition, as Herbert Morrison claimed, what Labour governments do. But neither is it merely what union leaders want.