Leading Article: Old labourism bites Blair

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TONY BLAIR was effectively given a smack in the teeth yesterday at the Trades Union Congress. Jimmy Knapp casually dismissed the Labour leader's plan to settle the signal workers' strike by binding arbitration. The stoppages will continue. There will be no compromise. Although Mr Blair was clever enough to make his intervention covertly, it will be a salutary reminder to him of the difficulties he faces in negotiating a path beyond the labourism of his predecessors.

Remarks over the past few days by John Monks, the TUC general secretary, have also suggested that unions are back on the offensive. Mr Monks paid tribute to Mr Knapp yesterday for showing that 'trade unions have not lost their bite'. The previous day he heralded the dispute as 'a thoroughly modern strike'. In the sense that the RMT has followed the rule of modern law, that is fair; given that the strike is partly about simplifying a baroque and outdated system, that assessment is at least questionable.

Unfortunately for Mr Blair, several of his most senior colleagues disagree with his views on Labour's links with the unions. At yesterday's conference, David Blunkett, the party chairman, strongly made the case for consolidating rather than weakening the connection. Frank Dobson, Labour's transport spokesman, has adopted an uncritical attitude to RMT throughout the strike, missing no opportunity to declare that the Government must tell Railtrack to pay up.

It is easy to see the temptation in Labour's path. Mr Monks reminded his audience yesterday of the opinion poll evidence which suggests public backing for the strike. But Labour would be unwise to read too much into this. So far, the disruption to the public caused by the rail strike has been relatively slight and may still be diminishing.

If Labour's 'pay up' stance is projected more widely across a public sector which is still operating within the Chancellor's paybill freeze, it promises to lay up formidable problems for an incoming Labour government in 1996 or 1997. In the shorter term, Michael Portillo's appointment as Employment Secretary suggests that the Government's recent conciliatory approach to the unions has been dropped. The Conservatives may see it as in their interests to foment conflict with public sector unions, whose recent record of success in strikes is poor. Labour risks serious damage if industrial action again becomes commonplace.

In short, Mr Blair needs a strategy for dealing with public sector pay, a subject upon which Labour's modernisers have so far been remarkably silent.

The idea of binding arbitration, although it might just help both sides to get out of this dispute, is hardly a substitute for a more considered view on the future of pay review bodies and the linkage between public and private sector pay.

When Mr Blair dines tonight with the TUC leadership, he should not spend too much time on mutual congratulation.