Blair Seeks To Calm Union Concerns On Globalization

Blair Seeks to Calm Union Concerns on Globalization (Update1)
By Gonzalo Vina and Reed V. Landberg

Sept. 12 (Bloomberg) — Prime Minister Tony Blair sought to soothe labor union concerns about immigration and the loss of jobs to emerging economies, saying the government will help British workers adapt to economic change.

Blair told the Trades Union Congress annual conference that the government understands the unease unions have voiced about globalization.

“Suddenly we feel under threat, physically from terrorism on our streets, culturally as new waves of migrants change our society and economically because the open world economy sharpens competition,'' Blair said in the south-coast resort of Brighton. “People feel they are working longer but are less secure.''

Blair is making his final appearance at the TUC conference as prime minister after the resignation of eight junior members of his government last week forced him to say he will step down within a year. In his nine years in office Blair has had strained relations with unions who oppose his efforts to increase the role of non-state companies in public services such as health care.

Blair, 53, is under pressure from many of his own Labour Party lawmakers to quit immediately. The party last week descended into its worst infighting in more than two decades after former Home Secretary Charles Clarke accused Chancellor of the Exchequer Gordon Brown, the likeliest to succeed Blair, of orchestrating a plot to oust the prime minister.

Union Role

Unions will play a key role in the contest to succeed Blair, since they control a third of the votes in Labour leadership elections. Brown, 55, is due to address union leaders at a private dinner tonight where he may face criticism over health-service reform and pensions, including plans to raise the retirement age.

Unions, which helped found Labour in 1900, have seen their grip over the party wane over the past decade after Blair and Brown recast it as “New Labour'' to broaden its appeal to middle- class voters. Blair joked last week than his departure would be “to the relief'' of both him and the TUC.

Union membership has fallen since Blair took office to 6.68 million in 2005 from 6.9 million. Some unions have questioned their financial support or the party — union funds accounted for more 70 percent of Labour's total in the second quarter –, mainly over what they say is the “privatization'' of public services.

Health workers yesterday voted to hold the first strike in the state-run National Health Service in 18 years, over plans to sell NHS Logistics to a private company, Deutsche Post AG's DHL unit.

Open Markets

Blair said unions must accept open markets, cross-border trade and competition from abroad. In return, he said the government will fund education for workers whose jobs are eliminated and impose tighter immigration controls to keep a lid on migration.

“We have to escape the tyranny of the `or' and develop the inclusive nature of the `and,''' he told delegates. “The answer to economic globalization is open markets and strong welfare and public service systems, particularly those like education, which equip people for change.''

At least 600,000 migrants entered the U.K. when Poland, Hungary and the Czech Republic joined the EU two years ago. The government had forecast 20,000 would come. Blair said migrants have helped the U.K. economy and that they should receive proper protection under U.K. labor laws.

To contact the reporter on this story: Gonzalo Vina in London at .

Last Updated: September 12, 2006 10:15 EDT