TUC general secretary Frances O'Grady has warned that both unions and the Labour Party will need to change to deliver a radical new economic settlement that will lift the UK out of a lost decade of stagnation.
Delivering the annual Attlee lecture at Oxford University, Frances warned that the Labour Party must make a break from New Labour managerialism and the idea that deregulated markets can be given a human face.
She also warned that unions cannot retreat into a comfort zone of narrow sectionalism or oppositionism.
“Both Labour and unions must learn from the lessons of the past, in order to forge a new ideological settlement for post-crash Britain,” said Frances. 'If we are to build a future that works for all, then both sides of the labour movement need to change.
'For the Party, there must be a decisive break with New Labour managerialism, the notion that deregulated markets can somehow be given a human face.
'And for us in the trade unions, there can be no retreat into a comfort zone of narrow sectionalism or oppositionism. Our long-term viability ultimately rests on our capacity to shape a new economy, not from the sidelines but from within.'
Looking ahead to the challenge facing unions, Frances said: 'Unions need to be smart and realistic about what we seek from a new settlement. Much as we would like the next Labour government to be like a videotape run backwards undoing all the coalition policies we dislike, we have to recognise that there will be a difficult and different starting point.
'Of course we need to undo the damage done by this government and the crash, but there will need to be new thinking and a recognition that not everything will be achieved at once.
'That does not mean that we in the trade union movement be timid in what we seek. We know that even with an end to forced austerity, there will no longer be the illusory resources generated by the finance bubble. But if there is less to spend, then we need to look for precisely the big structural changes in the economy that the last Labour government shied away from.
She called for a future Labour Government to properly deal with problems such as low pay, not spray money at them by subsidising poor employers.
'And in seeking radical economic change, unions need to avoid the strategic error we made after the war. We should embrace industrial democracy and take up every chance to redefine economic relationships. Trade unions cannot afford to stand aside as we did after 1945. This time, history would simply pass us by,” said Frances.
'In the future, unions and working people need to be at the heart of the economy, having an effective voice, winning fairness, building the businesses that will deliver our prosperity in the decades to come. That poses a challenge to government, to business and to managers.”
A strong believer in the concept of the common good, Frances said “Most of all, industrial democracy poses a challenge to us in the trade union movement. It implies a role that is not just more ambitious, but more demanding, than the one we usually have now. It means accepting responsibility, moving out of a comfort zone of short-termism, to taking the long view and championing the greater good.'