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Sunday, 3 February, 2002, 13:55 GMT
Blair battles on with reforms
Tony Blair
Mr Blair arriving at Cardiff for Sunday's speech
By BBC News Online political correspondent Nick Assinder

Ever since the last election, Tony Blair has been spoiling for a fight over reform of the public services.

He first planned to engage with the unions at the TUC conference last autumn but his speech fell on 11 September and was abandoned.

Ministers are well aware that simply pouring cash into the public sector black hole will not bring about the improvements the prime minister wants

But the conflict was only postponed and, thanks to his speech at the Labour conference in Cardiff, he has now got the fight he was after.

Union leaders have been queuing up to attack the prime minister over what he has insisted is the central policy of his second term.

He carefully avoided directly targeting them in his speech, but that did little to calm their anger.

Many even believe the government has deliberately been sending out contradictory messages - one day suggesting it is the champion of nurses, teachers and the police, the next apparently suggesting some of them, or their representatives, are amongst the wreckers trying to hold the government back.

Whose cash?

Even though there is a large swathe of the union movement ready to accept his challenge, there are enough big hitters opposed to his plans to cause him severe problems.

The bottom line is the argument over how the public services are financed - through taxation and borrowing or private investment.

And John Prescott only added to the union¿s deep-seated concerns when, speaking on BBC¿s On the Record, he said private companies were more likely to be efficient because they are driven by the profit motive than the Treasury which would simply ¿pay the bills¿.

John Prescott
Mr Prescott appeared on the BBC's Breakfast with Frost
But, apart from all the talk of private investment and PFI initiatives, it is still less than clear exactly what else the prime minister has in mind when he talks about reform having to go along with investment.

Discounting the PFI deals there has been precious little else in the way of concrete policies emerging from No 10.

Ministers are well aware that simply pouring cash into the public sector black hole will not bring about the improvements the prime minister wants.

Large-scale structural reform is also required but, so far, there are no clear government initiatives to address that problem.

When they do come, they will also undoubtedly add to the union concerns.

A secondary argument is that the Labour party is cosying up to big business, like Enron, while increasingly distancing itself from the unions.

Both these things cause serious worries in the Labour movement so it is no surprise that the prime minister is facing a battle with the unions.

Small c conservatives

And, while he and his ministers may insist it is the Tories they have identified as the "wreckers" many union members and old Labour supporters believe they are in Mr Blair¿s sights - particularly when he talks about "small c conservatives"."

He clearly wants to defeat leaders like John Edmonds and Dave Prentice but, at the same time, he has to keep the wider movement on board - not least for their cash.

As a result, many expect to see significant concessions from the government before the policy develops much further.

It is a hugely difficult balancing act for the prime minister and, at the moment, it is far from certain whether he can pull it off.

See also:

11 Sep 01 | UK Politics
US attacks stun TUC
02 Feb 02 | UK Politics
Ringside view of union fightback
01 Feb 02 | UK Politics
Don't blame it all on us - Blunkett
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