Election '97: A factory of the future shows the way with pay

Tony Blair paid a visit yesterday to what he believes is the business of the future - a factory where workers are paid less than the Low Pay Unit recommended minimum and where unions are almost non-existent.

The visit, to Landis & Gyr Communications in Croydon, south London, came in recognition of the fact that the company had voluntarily laid down its own minimum wage - pounds 4 an hour - without union involvement.

But that is 42p an hour less than the Low Pay Unit recommends, 26p less than the favoured Unison rate and lower - by an unspecified amount - than what the Transport & General Workers Union and the GMB general union would like to see. For the past two years, the GMB has been running a campaign entitled: "More Than pounds 4".

Asked by The Independent whether he could live on such a wage - pounds 152 a week before tax - Martin Brennan, managing director of the company which made pounds 4m last year, replied: "I would find that difficult. I am concerned for my workforce but if I pay too much, I am out of business, so which do you want?"

Mr Blair toured the factory where smart cards and payphones are manufactured for BT, and he posed for photographs with Selvimadan Selvakumari, 48, who tests the phones.

Asked whether this was a business of the future, Mr Blair said: "Sure. It is investing in its employees and treats them fairly. It is successful and is exporting to world markets in a way that is applying new technology with an educated workforce." Asked whether he thought pounds 4 was fair, he said it was a matter for management and the workforce to negotiate.

Mr Brennan said he would accept union collective bargaining if more than half of his 200-strong workforce wanted it - only six are in unions - but Mrs Selvakumari said staff were so happy they did not need it.

Bharti Patel of the Low Pay Unit felt pounds 4 an hour was too low, but added: "We see a lot worse - in some cases pounds 1.79 an hour". She said only 8.2 per cent of Croydon workersearned less than pounds 4.42 an hour.