Hamish McRae: The unions need to rediscover their roots

The concerns of the workforce are different from those of the workforces of Victorian factories

So what should trade unions do in an ever-more globalised world economy?

Tony Blair's speech to the TUC was more about global politics than about the global economy. That seems a bit of a lost opportunity because the future of the trade union movement depends not one whit on what the Government does in the Middle East, it depends tremendously on how this country meets international economic competition. Put starkly, what can working people here do better than people on the other side of the world, who will work for much lower wages, and what can the unions do to help them cope with these pressures?

The years of Labour government will have been dispiriting for the union movement. Since 1997, the movement has had a government that has been broadly favourable to its aims. It has a seen a huge rise in the size of the public sector. Yet while the decline in union membership has halted, it remains well below the level of 1997. Official figures suggest the proportion of union members has stabilised at about 29 per cent of employees and seems also to be steady at 26 per cent of the total workforce (allowing for the growth of self-employment). However, unofficial calculations of the size of the increase in the workforce, with immigration from the new EU members, would suggest the proportion of union members in the workforce may still be falling even now.

Besides, there are structural weaknesses in the make-up of union membership. Northern Ireland, with its large public sector, has the highest percentage of union density (40 per cent), while in the most prosperous part of England, the South-east, only 22 per cent of employees are members.

In any case, the apparent halt to the decline has been under uniquely favourable circumstances, unlikely to be repeated. The movement faces a clampdown on public spending, even under the plans set out by Gordon Brown, and quite probably a government less supportive of its aims in a few years' time.

The reasons for the decline are widely appreciated: the loss of jobs to lower-cost economies and the growth of sectors without a strong tradition of union involvement. One aspect of the hugely complex phenomenon we have dubbed globalisation has been the export of lower-waged jobs to eastern Europe, China and India. Another has been the inward migration of people from the "new" EU. Neither seem likely to be reversed in the medium-term future.

This is a British perspective. But pretty much the same retreat from trade unions is taking place in just about every developed country in the world. Countries are ranked in the international competitiveness league tables by such measures as business innovation, access to venture capital, proportion of the workforce in education and so on. Old measures such as prevalence of strikes or employer/ union relations no longer appear. Outside of the public sector, unions have already ceased to figure much. It is not that they no longer matter: to some extent they still do. It is just that other aspects of competitiveness matter much more.

So what is to be done? One answer would be that nothing much can be done to change the present trend. Under this option, the movement would become principally the representatives of public sector workers, retaining only a residual role in the private sector. It would represent the public sector workforce as vigorously as possible. It would fight for better benefits than those available in the private sector, such as earlier retirement, indexed pensions and shorter holidays.

This is a perfectly rational response. You cannot do anything about the loss of power as a result of globalisation, so you focus on the parts of the economy that are least likely to be affected by it, namely the public sector. But it is a response that carries danger, for it would mean setting public sector employees more explicitly in conflict with private sector ones. Resentment of the differential treatment accorded to public sector workers has risen sharply after Gordon Brown's expansion programme. It seems set to rise even more as taxation is planned to climb further as a proportion of national income.

If this is a rational response, it seems to me to be an unwise one. The union movement was built to represent the broad mass of working people, not a narrow segment. Strategically, it can hardly be sensible to box yourself into the corner of principally representing the smaller numbers of workers who are paid by taxpayers, rather than the much larger number of working people who pay the tax.

The alternative response would be to look at the needs of the entire labour force as it is now, confronted by globalisation and insecurity, and to figure out where it needs help. More specifically, the union movement could think through where it can help people more effectively than can the various commercial service providers.

For example, people who move jobs a lot and will spend periods in part-time work or self-employment need help with pensions. Employers are retreating from provision. The private sector, post-Maxwell and post-Equitable Life, has a trust problem. And the whole system has become unutterably complicated. People at the top of the earnings chain are able, at a price, to buy the professional advice they need. People lower down can't.

Here is a prime opportunity for the union movement to boost its membership in the private sector by acting as a trusted adviser, maybe a provider. A lot of people don't trust their employer, and feel the financial services industry will rip them off. But there are very few not-for-profit organisations to which they can turn.

There are many other areas where the sheer complexity and insecurity of modern life creates opportunities for ethical not-for-profit organisations. Taxation, access to public services, coping with heath emergencies, mortgage advice, when to be self-employed, how to start a business - all these are the concerns of the modern workforce. They are different from the concerns of the workforce of Victorian factories, but they are just as real, and working people need just as much help as they ever did.

This is not to argue that unions should simply duplicate in a cheaper and more ethical way - services the private sector already offer. Rather, it is to say that the more complicated the pattern of people's working lives, the greater their need for co-operative associations to help them pick their way through the muddle and make sensible decisions. To ask unions to do this is to ask them to go back to their roots: helping workers be more secure and, indeed, more happy.