The unions hold their heads up again

Is new Labour finished and the Third Way obsolete? Many on the left think so. Robert Taylor reveals

The salubrious surroundings of the Institution of Mechanical Engineers in London are to host an event later this month that promises to be a new landmark in the often tortuous relations between the unions and the Labour Party. Assorted luminaries from parliament, academe and the media, plus a formidable array of union leaders, will assemble under the avuncular eye of Lord (Roy) Hattersley to launch a serious ideological challenge to what remains of Tony Blair's Third Way.

Bill Morris of the Transport and General Workers' Union will be there, as will Dave Prentis of Unison, the public service union, and John Edmonds of the GMB general union.

Trailed as a discussion followed by a drinks reception to bless a merger between two think-tanks, there is much more to this event than meets the eye. The launch of Catalyst Forum, as it will be called, had been planned (before 11 September intervened) for the Labour conference last autumn; at that time, many people, particularly union leaders, saw it as a rather desperate old Labour attempt at a rearguard action. Now the likes of Edmonds are convinced that new Labour is "finished" and that "a vacuum" of ideas needs to be filled on the centre left. Edmonds's optimism may stem from a recent eye operation that has enabled him to dispense with his thick spectacles, but it is also based on a conviction that Third Way politics are obsolete and everybody knows this.

This is not the only sign of renewed confidence among trade unionists. On 27 April, an impressive array of them - including the new, militant generation of leaders such as Bob Crow and Mick Rix from the rail unions - was at Friends Meeting House in London to swear allegiance to a charter on workers' rights. They are willing to use strikes in the time-honoured union way. They are also ready, as is Edmonds, to cut their cash flows to Labour in protest at its pro-business policies. But they look impeccably social democratic in their aims: they simply want the government to abide by the workplace standards agreed long ago when Britain signed core International Labour Organisation conventions.

Whether the unions can reassert their power inside Labour remains debatable, however. Not even the most optimistic of their leaders expects a return to social contract-style deals that gave them front-row seats alongside cabinet ministers and employers. Rather, they hope for some new understanding - however vague or opaque - that will give them roles other than as mere spear- carriers in Blair's project. The TUC - whose general council has agreed unanimously that it supports the increased national insurance contributions to fund the NHS - is offering the PM "a partnership" to ensure effective reform of the public services.

The unions are probably going to be disappointed for the moment. Not even Gordon Brown can be bothered to say positive things about them, even when he speaks to their conferences in old Labour language. His intellectual focus is on devising schemes to help small firms, rather than on backing workers' rights. Neither he nor Blair has anything to say about social partnership. Only in Britain and in Silvio Berlusconi's Italy are the unions kept away from any state responsibilities.

Ministers promise a consultative document on how they will implement new Brussels regulations that require information and consultation committees in all companies employing 50 or more workers. But because Blair - in close alliance with big business - fought against this modest proposal to the bitter end in Brussels, we can expect him to accept only a minimalist proposal, which is likely to be challenged in the European Court of Justice. Though he ended Britain's opt-out from the social chapter of the Maastricht treaty, the PM has continually sided with employers to delay or water down improvements to workers' and union rights.

The unions still have few friends at court. In Labour's first term, Ian McCartney did valiant work as a go-between at the Department of Trade and Industry, and delivered the minimum wage and recognition procedures. But he was shunted to the relative obscurity of the Cabinet Office, after business lobbyists convinced Blair that he was in the TUC's pocket. Jon Cruddas, in the PM's office, also spoke up for the unions, but now, as Labour MP for Dagenham, he does not disguise his impatience with the state of union-government relations. Yet Blair may need all the union friends he can find if labour relations deteriorate in the public sector.

To the excitable faithful on the far left, there is a whiff of the old times in the air. Rank-and-file mobilisation is back in fashion. But Britain is no longer an industrial country as it was in the 1970s, with large manufacturing plants, self-standing shop stewards and a politically sensitive generation of union activists. The unions could not stage industrial battles in the classic mould even if they wanted to. But that meeting at the Institution of Mechanical Engineers could herald the birth of a new social and responsible unionism, uninhibited by memories of a lost golden age. Out of the ruins of the Third Way, an alternative that reunites Labour with the unions around a revitalised social democracy may still be possible.