Unions challenge Blair over economy

THE PRIME Minister will today be urged to intervene in an attempt to prevent manufacturing industry dragging Britain into a full-blown recession.

Leaders of the country's biggest unions want more input into economic decision-making and will urge Tony Blair to listen more closely to employers.

The demands come as David Blunkett, the Secretary of State for Education and Employment, admitted that the growing world economic crisis could cause problems for the Government's flagship welfare-to work programme.

He told BBC Radio 4's The World This Weekend: "Welfare-to-work has a bigger challenge as the economy tightens." The project would be "more difficult" in the present climate.

A senior union delegation to 10 Downing Street today was scheduled to discuss next week's TUC Congress, but the session will now centre on the economic situation amid mounting redundancies.

Last Friday Fujitsu, the Japanese company, announced the closure of its electronics factory in Mr Blair's Sedgefield constituency, with the loss of more than 600 jobs. It came on top of the closure of the Siemens semi- conductor plant in Tyneside, with the loss of 1,100 jobs.

And yesterday it emerged that another 600 jobs could be lost in the region if the Vickers tank factory in Newcastle does not win a pounds 1bn order for Challenger 2 tanks from Greece. Doug Henderson, the Defence minister and MP for Newcastle North, said he would throw his weight behind the bid.

Roger Lyons, leader of the white collar and technical union MSF, will call for a special task force made up of ministers, employers and unions, which would help to co-ordinate policy towards manufacturing.

Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, will urge Mr Blair to work in partnership with both sides of industry in developing an overall economic strategy.

Mr Jackson said the Bank of England's monetary policy committee, which meets on Wednesday, had "one last chance" to show that it was concerned about industry by cutting interest rates.

He added that the Treasury now needed to show, for the first time since the Second World War, that it accepted that industry mattered to Britain.

"Manufacturing is heading for meltdown. We agree that there must be no return to boom and bust, but the problem facing manufacturing is so acute that action must be taken now. Social partnership is the only government. Unions and employers can solve the huge problems we face."

Senior AEEU officials are angry not only about the attitude of members of the monetary policy committee, but also the degree to which ministers dismiss anxiety about the "real economy". Mr Jackson said: "The Bank of England seems to live in an ivory tower afraid to enter the real world of manufacturing. I would also urge the Gvernment to involve unions in finding solutions to the problems facing the economy."

Mr Lyons's proposal for a task force echoes the old tripartite approach of governments in the 1970s. He said the group should cover inward investment, regional development and training, to achieve a co-ordinated approach.

John Monks, general secretary of the TUC, who will lead the delegation today to Downing Street, believes the interest rate-setting committee should be changed to include a representative from industry. "I would like to see somebody with oil under their fingernails in a position to advise on such a key economic instrument."

It is clear that the looming recession will dominate proceedings at next week's TUC conference and the Labour Party conference in October.