"THE CHANGES that we do propose would leave British law the most restrictive on trade unions in the Western world." Thus Tony Blair's boast in the election campaign: yesterday he fulfilled his promise. The White Paper Fairness at Work gives the unions some important things they wanted, but they seem all the more significant because unions have become so used to losing rights and powers with each successive Act of Parliament over nearly two decades. Much of that shift in the balance of power at the workplace was right and necessary, but it went too far. A modest move back in favour of employees and - where they want them - their unions will still leave British employment law hemming in the activities of organised labour more than in any comparable industrialised democracy. But the balance achieved by the Government after months of tortuous negotiation is fair.

It is worth pausing to note how extraordinary this historic settlement is. Here is the leader of a party founded by the trade unions, who still hold 50 per cent of the votes in Labour's policy-making conference and who still pour millions into party coffers, striking a balance between the interests of employers and unions which is not merely impartial but tilted - rightly in our view - in favour of the right of managers to manage.

Some employers' organisations are reported to be upset that employees will have the legal right to be accompanied by or represented by someone in the case of any grievance or disciplinary action. That "someone" could of course be a trade union official. But it is extraordinary that any half-decent employer should seek to deny such a right to an employee. Indeed, this is an indicator of just how far the pendulum has swung.

More justifiable is the anger of the unions over the imposition of an arbitrary 40 per cent threshold for "Yes" votes in workplace ballots on union representation. This was the requirement which wrecked Scottish devolution 20 years ago: a similar threshold would have stymied both Welsh devolution and a London mayor this time round. There is simply no argument which holds water for setting such a threshold. However, it will not make much difference in practice and if it helps to reconcile business to the rest of the package it will have served a purpose.

But this imposes an obligation on employers to prove that they can make a "flexible" labour market work more efficiently than the "sclerotic" arrangements on the Continent. The emphasis in the White Paper is on individual rights, but many employees want collective representation too. The massive growth in employment tribunal cases might be moderated if more grievances were resolved informally by dialogue between employers and unions. To the extent that the Government's proposals mark a small move in this direction, they should be welcomed. For all the mockery of the Prime Minister's "third way", if this is what it looks like, then let us have more of it.