It is a good time for Mr Blair to build a new relationship with the unions

The threat of the first national firemen's strike for more than 25 years is causing real tremors across Whitehall

The next British political event of any importance is the Trades Union Congress. It's been a long time since it's been possible to write that sentence with such confidence. In the era of previous Labour governments, whose very survival seemed to hang on the deliberations of the unions, it was all too easy. The centrality of trade unions to the British economic and political story was absolute during the Wilson-Callaghan years; but it continued through the epic struggles of much of the Thatcher-dominated 1980s. Arthur Scargill's recent retirement as president of a once mighty miners' union now reduced – not least by his own Leninist obstinacy – to a shrunken relic, is a poignant reminder of one of them. But that centrality ended around 1986-7 after Rupert Murdoch's success at Wapping. The unions weren't written out of the script. But they were no longer at the core of the political agenda, Labour's or the Tories'.

In terms of the 20 years from around 1966 they still aren't, of course, and they show no sign of becoming so. But they are beginning to preoccupy politicians once again. A series of elections has brought in a new cadre of union leaders sharply, in some cases stridently, critical of New Labour and Tony Blair. For the first time in many years, something like a coherent left-of-centre grouping of union leaders will make its mark at the September Congress.

The recent one-day strike by council workers was surprisingly – not least to the employers – well-supported, and it resulted in a swift settlement to the satisfaction of Jack Dromey, the main union negotiator. Mr Dromey is an interesting example of the new mood. Married to the modernising Labour minister Harriet Harman, he was once written off by Old-Labour critics as too Blairite. Now a pretender to the leadership of the TGWU, he has a notably harder edge to his voice when he criticises New Labour's addiction to rich businessmen.

Finally, the so-far under-reported threat of the first national firemen's strike for more than 25 years is causing real tremors in Whitehall, and may well cast its shadow over the TUC, since their union is due to hold a special conference just after it.

Tony Blair is certainly right not to see these developments as the beginning of a return to the Seventies. The entrenchment of union democracy, coupled with low inflation and an overall rise in living standards, militates against such a prospect. But that doesn't mean that he shouldn't be thinking about it over the coming weeks, as he doubtless will, and not only because he has decided to address the TUC in his first major speech of the conference season. Some recasting of the government-union relationship is overdue.

For a start, the times require it. Gordon Brown's Comprehensive Spending Review has warmed the unions strongly to the Chancellor. But it also creates inevitable problems of expectations – many of which undoubtedly deserve to be met. Of course this isn't a one-way street. If the services are to improve, then productivity matters hugely too. If the sometimes dire housing problems faced by key NHS workers or teachers in the South-east are to be solved by significantly higher pay, as they will have to be, that may speak for a break-up of the kind of central national bargaining that national union leaders naturally favour. And so on. Equally, there is much in the argument that a decently paid workforce is a better workforce. There are acute problems of recruitment and retention. There are areas of indefensibly low pay. The unions have a case – most especially where they can show that the consumer also benefits from meeting it.

All this is complicated by the relationship between the Labour-affiliated unions (and it is often forgotten that many still aren't affiliated) and the party itself. The RMT's vain attempt to bully its sponsored MPs may be an extreme case. But there are less dramatic examples of union leaders seeking to use affiliation as leverage for changes in government policy. This is counterproductive, because it provokes generalised anti-union rhetoric from the Government, which by extension brands unions for more than their party political behaviour. Ministers, including the Prime Minister, are entirely right to say that unions have no business using their affiliation fees to try to run the Government or the party. Where they are mistaken is to extend this to a broader anti-union rhetoric, supposing that this plays better with the wider public than it really does. Especially post-Enron, when big business no longer looks to the public anything like as all wise or benign as it did to many in New Labour back in 1997.

Two imminent issues, both emanating from the EU, are a case in point. One is a directive on information and consultation of employees, the other proposes better employee protection for agency workers. The TUC fears that the Government will do the absolute minimum it can without actually breaking European law. The most successful companies already fulfil most of the conditions of the first; in the case of the second, the unions are merely seeking to end the positive incentives to sack permanent employees at the expense of temporary ones often enjoying archaically poor terms. There is no reason for not wholeheartedly implementing both directives other than that the CBI is vociferously lobbying against them.

And there are two powerful political reasons for doing so. One of New Labour's errors in the first term may well be not to have negotiated more evenhandedly between the TUC and the CBI. Some of the latter's leaders at the time were genuinely surprised how easily Number 10 on occasions gave into their demands because of fears that business would break with the Government. If they had been tougher with the CBI, the modernising leadership of John Monks, general secretary of the TUC, would have been built up at the expense of those union leaders who were undermining him by throwing their weight about in the Labour Party. A result on the two European directives would strengthen the TUC leadership by demonstrating its capacity to deliver.

The second reason concerns Europe itself. Thanks in very large part to Mr Monks, TUC policy remains in favour of the euro. But a good deal of that support depends on the idea of a "social Europe", with which Jacques Delors inspired the TUC in the mid-Eighties. Blairite rhetoric, however, has sometimes suggested that the Government has no time for the idea. Nobody is suggesting that the Government should favour every whacky idea on worker rights that emanates from the employment directorate of the European Commission. But a refusal to implement fully even these two relatively modest directives can only make it more difficult to maintain union support – and funding – for a euro referendum if and when the moment comes. By demonstrating at the TUC next month that he understands that, Mr Blair would be issuing a powerful invitation to the unions to make their relationship with the Government a more sensible and constructive one.

d.macintyre@independent.co.uk