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Strike and counterstrike

David Cameron stands to beat the unions. But he must fight hard and fight now

2 July 2011

12:00 AM

2 July 2011

12:00 AM

For years, David Cameron has known that he would have to fight the trade unions and that the outcome of the battle would define his premiership. But neither side expected to fight so soon. The unions had intended to wait until the cuts would be at their deepest and the government was at its least popular. But the Prime Minister is moving too quickly, and making faster progress than his predecessors. School reform now looks unstoppable. Pension reform is next. The union bosses, Christine Blower, Mark Serwotka and Dave Prentis, are not ready for a long conflict — but they believe they have little option other than to strike now.

In public, they make blood-curdling threats about the greatest disruption since the General Strike. In private, they must admit that their lack of support is obvious. Ed Miliband, who was made Labour leader thanks to union votes, has withheld his backing. The unions barely have the support of their own members, let alone the Labour party and the public. If there is to be a fight, a Tory victory looks certain. Even Ed Balls, to whom combat comes as easily as breathing, warned unions that to strike would be to walk into a ‘trap’ laid by No. 10.

But that is to give the government too much credit. Rather than tricking the unions into picking the wrong fight at the wrong time, No. 10 has been trying to avoid one at all costs. Cabinet members have for months been instructed to say nothing that may provoke the unions. Francis Maude has even served the union barons sandwiches, if not beer, on their visits to the Cabinet Office. It seems that, even now, the Prime Minister has no idea what a strong position he is in. So this is not a Tory trap — but, if used properly, it can be made into one.

The teachers’ unions are the angriest. Christine Blower, the militant leader of the National Union of Teachers, had hoped to stop Michael Gove allowing state schools to go independent. As this magazine reported, she hoped the NUT could pick off schools one by one, threatening head teachers considering independence with strikes or worse. Her strategy has failed utterly. At present, a third of all secondary schools have been granted Academy status or are in the process of applying for it — a stampede which the NUT has been unable to control. Too many teachers, it seems, were keen on Gove’s policy.

When Blower held the NUT’s strike ballot, ostensibly on the issue of pensions, a mere 40 per cent of her members turned up to vote. This is a deeply embarrassing pattern for the union militants. The Association of Teachers and Lecturers found that just 35 per cent of its members voted in their strike ballot. The idea of school freedoms, the end of national pay bargaining, star teachers being paid whatever the head thinks they are worth, all seemed to go down better in classrooms than in union headquarters. Blower (who was recently given a 10 per cent pay rise) was becoming isolated. She had to strike.

Even the issue supposedly at the centre of this week’s strike, state pensions, is not one which has set the nation ablaze with anger. Over the past decade, most workers have seen the steady extinction of the final salary pension scheme and accepted they will have to work longer. So if most taxpayers — men and women — are working until they are 66, why should those in public sector unions still be given their full pensions aged 60? When the Public and Commercial Services union held a ballot, just a third of its 251,000 members took part. The union barons’ claim that this is a historic struggle for justice does not appear to be a view shared by the membership.

Why the lack of enthusiasm? Because in both school reform and pension reform, the government’s proposals actually favour state sector workers at the bottom — at the expense of those at the top. Take the pension reform proposed by Lord Hutton. Actuarial analysis shows that a lower earner (starting from £15,000 a year) would see a 21 per cent increase in their pension by switching to the new system. A higher earner, in the top tax bracket, would see a 17 per cent reduction.

The Blair-era Labour MPs, who cut their political teeth fighting with the unions, reckon David Cameron has an extraordinarily strong hand. ‘You defeat the unions by splitting them — but this time, they come to the battle already split,’ says a Labour privy councillor. ‘If Cameron has the faintest idea about unions, he’d fight now and press this advantage home now.’ Christine Blower is struggling to claim she represents teachers, especially the younger ones who dislike bureaucratic control and quite like the idea that if they are successful, they could set up a school.

With the unions so vulnerable, Cameron has a once-in-a-premiership chance to remove the biggest obstacle to his government’s agenda. His reluctance to attack is even stranger given the extent to which the unions already control his government. Michael Gove was appalled to learn that teachers’ unions had been granted passes for the Department of Education and walked in regularly to consult his officials. This week, it emerged that there are 360 union officials not only working full-time in government departments but paid by the taxpayer to do so at a cost of some £19 million. During the Labour years, Gordon Brown allowed a merging of the government machine with the public sector unions. The unions could frustrate Tony Blair’s reforms effectively because they had infiltrated the government machine.

This also explains where all the money went in the Labour years. Brown, with the support of the unions, employed as much of the electorate as he could, adding almost a million more on to the state’s payroll. Half of all jobs created under Labour were public sector jobs and in some areas, such as the West Midlands, the government was the only source of employment growth. This disfigured local economies: state spending in the north of England is now at Soviet levels. But it created seven million workers with a vested interest in voting for a party that promotes spending, not cuts.

This is not just a battle about pensions. It’s a question of who governs Britain, and how to rebalance the economy. George Osborne explicitly aims to cut the public sector workforce, and plans that three private sector jobs will be created for every government one cut. To replace tax-consuming jobs with wealth-creating ones is an obvious good for the economy. But the unions will resist it with all their might.

So how can the government prevail? Three senior Conservatives are urging action, the first being the Mayor of London. Boris Johnson has been doing battle with Bob Crow, whose RMT trade union is arguably the most militant in the land. The Mayor believes it is time to exploit the unions barons’ lack of support with their own members, and pass a new law that would stipulate that public service strikes can only be valid if more than half of all members take part. So far, Cameron has not shown any willingness to pass this law. The Mayor has told him not to be so ‘lily-livered’.

George Osborne, too, is insistent that the coalition makes no concessions over pensions. He is uneasy with the Prime Minister’s growing reputation for U-turns: Britain’s credit rating depends on the markets being sure there will be no going wobbly on deficit reduction. He has let his deputy, the mild-mannered Danny Alexander, deal with the unions, under instruction that there is to be no quarter given.

And finally there is Steve Hilton, Cameron’s best friend and until recently his most powerful adviser. Hilton has been urging Cameron to reform at breakneck speed, making apologies along the way if need be. He watched in horror as the health unions dismantled Andrew Lansley’s NHS reforms, using their friends in the Liberal Democrats just as they used r
ebel Labour MPs under Tony Blair. The health unions found the coalition far easier to outwit than Blair’s government, in fact, and can now reasonably claim to have reversed a decade’s worth of reform.

To Hilton, this is of fundamental importance. What is the point of the Conservatives being in government if they can’t change the things that need to be fixed? As James Forsyth argues on page 10, he is deeply frustrated with the European Union and has decided Britain would be better off out of it. He also believes that the unions must be confronted, and now is as good a time as any. Yet Hilton is being outmanoeuvred by Jeremy Heywood, the permanent secretary of No. 10, who fears Cameron is already fighting battles on too many fronts. Heywood is fast becoming the most powerful figure in No. 10, and Hilton is increasingly lonely in his battle for reform. This has fuelled talk that Hilton may quit in frustration.

All this has left Cabinet members thoroughly confused. One minute they are being instructed to treat the unions with kid gloves; the next, they are being asked why they are not rebutting union claims. Without doubt, the union barons will be leaving the Cabinet Office encouraged: they will have seen a government at sixes and sevens with itself, not sure whether to fight or run. It is precisely this image, of an indecisive Prime Minister who seems to take pride in bowing to public opinion, that has led them to test his resolve.

Meanwhile, across the dispatch box, Ed Miliband is still agonising over what to do. He owes the unions, and knows it. On the night after his election, he bumped into Derek Simpson and Tony Woodley, who then jointly ran Unite, at the Labour party conference. He put an arm around each and said simply ‘thank you’. Now, however, his poll lead over Cameron has almost vanished, and he is facing questions over his leadership and need to exert control over his party.

For Miliband, this means breaking free from the unions — a rather difficult feat, given that they supply £9 in every £10 donated to Labour. The unions take the view that, in politics as in life, you dance with the one who brought you. They put him in charge, and they expect support. Miliband believes that he faces a simple choice: either he faces the unions down at this year’s Labour conference, or they try to get rid of him at next year’s conference — perhaps with the help of the always impatient Ed Balls.

Confrontation is not Cameron’s style. He prefers to assuage his enemies, then strike a deadly blow some months down the line. But to compromise with the public sector unions now would cripple him, perhaps as much as it crippled Ted Heath.

The alternative for the public sector unions is not oblivion, but a new model of co-operation. During the crash, a million jobs were shed by British companies. But instead of British Leyland-style battles, private sector unions worked with companies to keep job losses to a minimum — especially in the carmaking sector. It was an example of responsible unionism, which puts the public sector bully boys to shame.

Cameron finds himself drawn into what should be a modernisers’ dream: a battle that can be cast as past versus future, with himself on the side of progress. The union barons wish to cling to their status as chieftains of a new governing class, who enjoy better pay and shorter weeks than the people who pay their salaries. They have no case whatsoever. And this is why Cameron will, in the end, have to fight: to pass the laws against strikes, and take whatever action is necessary to defend the public sector against those who wish to exploit it. As he has always known, the public sector unions are his biggest single enemy. Such a chance to defeat them may not come again.

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