TUC President's speech -STEPHEN BYERS

As Secretary of State I have welcomed the advice, representations and views
put forward by the TUC.

That doesn't mean that I will always agree with the points put forward.There
will be times when I have to say no. Times when I can say yes.But in a
democracy this is a healthy relationship.

Not an overly close one that many felt existed under previous Labour
governments.

Now I appreciate that at times decisions we take in Government will cause
tension between us. There will be disagreement and occasionally a feeling of
anger and frustration as far as you are concerned.

When this happens we need to ensure that we maintain a dialogue. Our actions
in government will always be to put the national interest first. That means
that in all we do we will operate on the basis of fairness not favours.This
Government was elected on an agenda of modernisation and reform.

Not to be rooted in the past nor - as many Governments before have been
-overwhelmed by events in the present. But a Government with a clear vision of
the future direction of British society and the British economy. That vision
and sense of direction is vital as we are witnessing a fundamental shift
taking place in our economy and society. It is driven by globalisation,
knowledge, technology and innovation.

It is changing the nature of work and of the workforce itself.The successful
economies of the future will excel at generating and developing ideas and
exploiting them commercially.The first industrial revolution - in which we led
the world - was largely based on investment in plant and machinery.

The industrial revolution that is now taking place is a knowledge based
revolution and it will require investment in skills, training and learning.In
all this education is the key. As a government we are doing things
differently. I appreciate that for some this is not easy.

But week in and week out we are delivering policies and doing so in a way
which will retain and consolidate the support of that historic coalition that
gave us our landslide victory in May 1997.

Let's look at some of our achievements over the last two and half years. We
restored Trade Union Rights at GCHQ and cut corporation tax. Signed the Social
Chapter and led the case for reform in Europe.Began an investment of 40
billion in our schools and hospitals while at the same time cutting the rate
of income tax.Introduced a National Minimum Wage and cut the rate of tax for
small business to its lowest ever level.Within the month we shall see the
introduction of the Working Families Tax Credit and we have also introduced
tough measures to tackle fraud in our benefits system.

We've established the New Deal for the young and long term unemployed and a
Research and Development tax credit for business.Now the Tories still oppose
the National Minimum Wage. Their new DTI Shadow Minister Alan Duncan described
the minimum wage as a cretinous idea.Now a cretin is a fool or stupid person
- a far more accurate description of Alan Duncan than the minimum wage which
has directly benefited two million people.The Tories would scrap the New Deal.
They say it's been a failure.

Let's look at the facts not the prejudice. 300,000 young people already
helped. Youth unemployment cut by a half. Tories regard that as a failure.
They would be, but we are not prepared to see a whole generation laid to waste
- they must have hope for the future.The Tories say that they would not
support the introduction of the Working Families Tax Credit. This is the
latest sign that they have learnt nothing from their election defeat.

Support for hard working families is now a key dividing line . The Working
Families Tax Credit will make work pay and give parents a real incentive.It
will leave one and a half million families an average 24 per week better off.
The end of July saw the Fairness at Work legislation onto the statute book.

A new settlement for the workplace. A settlement based on partnership and
minimum standards.Part timers with the same employment rights as full timer
workers. Part time workers no longer to be treated as second class
citizens.Trade union recognition if that's what the workforce wants.Unfair
dismissal regulations applying after 12 months not two years.

An end to blacklisting for trade union activity and discrimination against
someone because they chose to belong to a trade union.Whistleblowers - those
courageous employees who expose wrongdoing in the workplace are now entitled
to unlimited compensation if they are unfairly dismissed.Given the crucial
part played by health and safety representatives I was pleased to introduce a
late amendment to the legislation which entitles them to unlimited
compensation if they are unfairly dismissed.

Of course, in the Fairness at Work legislation, the union movement has not
secured everything it wanted. Neither has the business community.A balance had
to be struck. This was fairness not favours in action.

One of the great challenges facing parents is how to juggle the responsibility
of bringing up a family with holding down a job.We need to introduce family
friendly policies into the workplace and we are beginning the process of doing
exactly that.

we have extended maternity leave by four weeks

additional maternity leave will be available after 12 months of employment -
a reduction from the present two years

introduced 13 weeks parental leave for both mothers and fathers

a right to time off work to deal with a family emergency

This right will start from day one of employment.

No longer will a working parent have to worry about losing their job if they
are called away to care for a sick son or daughter or an ailing parent.

I recognise that the long hours culture that exists in our country is not
supportive of family life.I know that many of you have concerns about changes
we have proposed to the working time regulations.What is clear to me both in
relation to the working time regulations and our proposals for family friendly
policies more generally is that we need to win over hearts and minds.

The adoption of these policies represents a major change in labour market
policy. A change that can benefit both employers and their employees.But they
will only be of benefit if they are introduced in a sensitive and sympathetic
way.I believe that these changes can be introduced in a way which secures our
objectives without placing an undue bureaucratic burden on business.

It is not our intention to exclude white collar workers from the protection
offered by the Working Time Directive and we do not believe that our
amendments to the regulations do this.We need to make this clear. I believe
the best way of doing so will be in the guidance to the regulations which we
will develop with the Health and Safety Executive.As our usual practice we
will discuss the guidance with the TUC and employers' representatives.

As we implement detailed measures in the whole areas of employment policy, I
want wherever possible, to avoid using the blunt instrument of regulation.
Instead, we want to develop more flexible approaches to solving these common
problems, through alternative mechanisms such as codes of conduct. Ensuring
we achieve our goals will therefore require more imagination and even greater
constructive engagement from unions, working in partnership with business.

That's why today I am pleased to announce that I'm inviting applications to a
Partnership Fund. The Partnership Fund will have 5 million to help foster new
attitudes and approaches to partnership in the workplace.

Partnership must be seen as more than a warm word. It should involve real
changes in the workplace.New ways of working together.New approaches to
training and development.New systems of performance and appraisal.There are
already many good examples of partnership in practice.

We want the Partnership Fund to act as a catalyst and we especially want ideas
based on family friendly policies and how the partnership approach might
benefit small businesses.

Here in Britain we are putting in place the policies which will lay the
foundation for our economic success in the future.Any consideration of our
future prosperity cannot ignore the question of Europe.

Now is the right time to make the case for Britain in Europe. We must do so
from the standpoint of the British national interest. Nearly 60% of our trade
- 100 billion- is now within the EU. The share of our exports going to EU
countries has risen rapidly since we joined the EU.

Many markets which were closed in Europe have opened up, and the UK has been
in the forefront of the liberalisation agenda. British jobs and investment
increasingly depend on Europe. It is our key market. Our exports to France
and Italy exceed those to the whole of North America.

Exports to Belgium and Luxembourg are double those to Japan. Financial
services, in which the City of London plays a vital role, now provide a
million jobs in our country and overseas earnings in excess of 25 billion a
year. Europe is of great and growing significance as a market for these
services.

In total millions of jobs depend on Europe. As any inward investor will say,
increased investment depends on two things above everything else - Britain's
modern flexible and stable economy and its membership of the world's largest
market.

There are 380 million consumers in the European Union. In the next ten years,
with enlargement, there will be 100 million more. This is the big prize that
attracts the major players in our global economy. It is against this backdrop
that the talk of renegotiation is so dangerous. Yet that is exactly what the
Tory party is doing.

The effect of the marked shift in Tory thinking in Europe is to ensure that
the issue of Britain in Europe is now at the heart of a party political
debate.It means that yet again that in this generation we will need to make
the case for British involvement and participation in Europe. For the
benefits of EU Membership.

This is now a battle that we must win.Over the years it is a question we have
faced on a number of occasions. In or out of Europe. In the end, often after
long and agonised debate we have always chosen to be in.

This conclusion has not been the triumph of political dogma or by submitting
to some powerful vested interest, but due to sound common sense, always
putting the national interest first.

Europe matters politically and economically. Influence and partnership in
Europe is essential to the British national interest.The Conservatives have
confused the powerful case for reform in Europe with the case for
disengagement and a retreat to the margins.

Those of us who believe in importance of Europe must be the first to recognise
and argue that the Europe we have today - its institutions, its working
practices and its policy priorities is not designed for the challenges we now
face. Reform in Europe is vital because its direction needs to be clear, It
needs to reflect the challenge of the global economy in the 21st
century.Europe must make a reality of the Single Market in all sectors.

It must recognise that regulation can be a barrier to economic growth and job
creation. To achieve this reform programme perhaps above everything else
Europe needs to be far more forward looking. Working to an agenda of
education, enterprise, innovation so that the knowledge based economy of the
future is seen as a bringer of opportunity and not as a threat.We need to be
engaged at all times, to be building political alliances and to be shaping
Europe's development. Not having it shaped by others which has all too often
been our experience in the past.

As soon as we came into office we pressed the case for economic reform to
make the product, labour and capital markets of Europe more flexible. Without
banging the table we have successfully promoted Britain's interests by arguing
our case - as a result we have been able to:

cap the growth in EU spending

win a higher share of funding from regional and structural funds for the next
six years.

safeguard our nations border controls

end the beef ban by agreement on the basis of objective scientific evidence

and we have protected our rebate.

So we can see the benefits of Britain in Europe and the success we can achieve
as a result of constructive engagement. In our dealings with Europe we must
always act in the national interest - the British people would rightly expect
nothing less.

This must also be our response to the single currency.There is endless
speculation about the government changing our position on the euro.That we've
gone cool on the idea or that we've become more enthusiastic; that the brakes
have been applied or the foot is now hard down on the accelerator. All this
press speculation has meant that a whole Norwegian forest has been felled for
no good purpose.

Our policy remains the same. It was stated by the Chancellor in October 1997
and repeated by the PM on 23 February this year.The government's view is that
membership of a successful euro would bring benefits to Britain in terms of
jobs, investment and trade. The Chancellor has laid out the five tests that
will need to be satisfied in our national economic interest.

And of course the final decision will rest with the British people in a
referendum. Some people argue that we should rule our joining for a period
whatever the economic conditions. Some say that we should set a date for
joining whatever the economic conditions. We may well hear these arguments put
during congress this week.

Without wishing to cause offence I must make it clear that we reject both
approaches. No-one will push us into adopting either of these two positions.
Because they are not right for Britain.

They are not in our national interest.Meeting the economic conditions will be
the test. It is principled, pragmatic and practical. It is our settled
conviction and will remain our policy.

We are living in a world of change.The nature of work is changing. More work
part time. More people work on a temporary basis, or have fixed term
contracts.Fewer work on the shop floor, and there's been an explosion of
service based jobs. More work in small businesses.The composition of the
workforce is also changing. More women are working. Some 52% of married women
with a child under 5 now work, again more than double what it was a generation
ago. More families depend on two earners.

The businesses and organisations we work in face new challenges.More
competition. A greater pressure to innovate to stay ahead. A greater pace of
change.

Businesses are having to become more flexible. With more and more people being
asked to take on real responsibility. Change is the order of the day. We
all need to recognise that. The union movement is no exception. The
advantage of having laid down the conditions for economic stability is that it
gives us the space we need to react to these longer term trends.

We can see change as an opportunity not a threat.We all have a role to play
here, but only if we are prepared to embrace change. Because these new
working patterns put new responsibilities on us all. On Government, on
businesses and on trade unions.A responsibility on Government to ensure
minimum standards of fairness and treatment for all in society. A
responsibility on business to work in partnership and ensure that the task of
making a reality of the flexible labour market does not fall solely on working
people. A responsibility on trade unions to seek consensus not conflict to
support dialogue and avoid damaging disputes.

Flexibility does not have to - and must not - mean insecurity and poor
treatment.

This only leads to additional stress for many whose lives are already all too
stressful. And it leads to low morale and poor productivity. We must help
people to adapt to the new world of fast changing markets and shifting
patterns of work without sacrificing their quality of life. On many occasions
over the years trade unions have been at the forefront of change.Unions have
been swift to adapt to the vast changes in collective bargaining which have
occurred over the last twenty years.

Unions now negotiate a far wider range of packages for their members embracing
new forms of pay and new forms of working. Unions were among the first to
recognise the importance of training. With support for modern apprenticeships
and the need to train workers in broad based skills. Unions have embraced the
Investors in People approach. One reason why the UK's health and safety
record is one of the world's best is the important role which trade unions
have played on safety issues.

Union structures and services have adapted greatly to changed labour markets.
But the challenge for unions as for our country is to reform. To find new
ways to work with members and their employers to raise skills, improve
productivity and to play a role in making Britain a more prosperous and
competitive nation.

Working in partnership with business. Working with members to strengthen
their skills and to deal with a more challenging labour market. This is the
unions' new agenda and one which we in government support. To look back in a
world of change is to condemn yourself to opposition. This is a lesson William
Hague needs to learn. We simply cannot build a future for our people based on
a return to all our yesterdays. Those who resist change are not learning
lessons from history but living in it.

Half way through a Parliament is often the most challenging time.Voices call
for consolidation and a reconsideration of our objectives and direction. But
this is not the time to stand still. It is the moment to push forward on our
agenda of modernisation and reform. If the world changes but we as a political
party do not then we become redundant. Our principles become dogma. That is
why as a party we have changed.

In government we have demonstrated the nature of this change. Not to betray
our principles but to fulfil them. Not to lose our identity but to keep our
relevance.

It is because of change that we are able to be a progressive force for
fairness and justice and not an historical footnote.There can be no
distractions or diversions.Our objective must be a dynamic knowledge based
economy founded on individual empowerment and opportunity.

Where government enables but does not dictate and the power of the market is
harnessed to serve the public interest.The challenge for government is how to
prepare Britain for a world in which change is continuous and knowledge is
the new currency.

Successful economies and societies will be those that can adapt to the demands
of such rapid change, that are flexible and creative and manage change rather
than being overwhelmed by it. Finding ways to include all their people.

An approach built around a new coalition, but with clear objectives to create
a better standard of life for our people, to ensure British business succeeds
at home and abroad, to tackle exploitation in all its forms. An approach
which recognises that the role of Government has fundamentally changed, but
that it still has a critical part to play in improving the performance of the
British economy and in improving life for all.

First and foremost, we can create a stable economic environment, ending the
wealth destroying cycle of boom and bust that has dogged Britain's post-war
development.

We must never forget those days in the early 1990s with inflation at 10% ,
interest rates at 15% and over 1 million manufacturing jobs lost. Stability
matters more than ever in the new economy. Because more than ever we need
businesses to invest in knowledge, to take risks to stay ahead in fast moving
markets. We can ill-afford this vital investment to be put off through fears
about the economy and its long term stability.With stability achieved,
uncertainty removed, there are great opportunities ahead.

But they will only be achieved if we embrace the new and leave the old ways of
doing things behind. On the eve of the new century that is the challenge we
all face.I am confident that by working together, trade unions, business and
the government we will be able to meet that challenge. In so doing we will
discharge our responsibilities to our people and our country.

Ends