Enthusiasm for public sector pay awards tempered by concern over winter fuel payment cuts and job losses

Keir Starmer is the first prime minister to address the TUC for 15 years. Photograph: Gareth Fuller/PA

“We’re hearing an awful lot about tough times: it’s like being in a Dickens novel. What comes after the tough times? We need to hear about hope.”

Onay Kasab, the national lead officer for the Unite trade union, was addressing a leftwing fringe meeting, but similar sentiments reverberated through the bars and coffee shops at this week’s TUC congress in Brighton.

Keir Starmer got a standing ovation from delegates on Tuesday when he became the first prime minister to address the TUC for 15 years, and reaffirmed his commitment to “the biggest levelling up of workers’ rights in a generation”.

Yet the unions’ enthusiasm was tempered by anxiety – expressed privately, or out loud, depending on their particular slant – about Rachel Reeves’s tough approach to public spending.

In his speech, Starmer delivered his now-familiar argument about the parlous state of the country Labour has inherited. “Congress, even in our worst fears, we didn’t think it would be this bad,” he told them. “The pollution in our rivers. The overcrowding in our prisons. So much of our crumbling public realm.”

Given how many of his audience work in that crumbling public realm, they may not have been surprised. In a debate about public services on Monday, platform speakers had recounted first-hand stories about children being taught in temporary classrooms, and prison educators working in rat- and cockroach-infested rooms.

Reeves last month signed off above-inflation pay awards, averaging 5.5%, for many public servants, including teachers and NHS workers. Rightwing commentators portrayed these as a payoff for Labour’s union backers, but the chancellor made clear she saw them as essential to draw a line under strike action and tackle recruitment and retention issues.

While these awards were warmly welcomed by the unions, they are now asking whether Reeves’s Treasury will be prepared to make available the resources needed to repair shattered public services.

Congress kicked off with union leaders adding their voices to the clamour of concern about the decision to scrap winter fuel allowance for the vast majority of recipients. Unite’s general secretary, Sharon Graham, accused Reeves of “picking the pockets of pensioners”.

“What comes next?” asked Fran Heathcote, the general secretary of the PCS civil service union, who said her members are keen to see a “positive alternative” to years of public spending cuts. “We want to engage with the government to try and make that a reality – and some of this stuff is not boding well,” she said.

Delegates passed an amendment on Wednesday promising to oppose the winter fuel allowance cut, though given Labour MPs had backed the change a day earlier, it was a symbolic move at best.

Away from Brighton, the unions are still settling into a new role in public life as key stakeholders in policymaking.

Recalling a set-piece meeting to discuss the workers’ rights agenda, Mike Clancy, the general secretary of the Prospect union, said: “For the first time in my career as a trade union official we have seen something historic, the deputy prime minister and business secretary bringing the general secretaries of the largest unions around the same table as business leaders, to discuss how to improve the world of work.”

Unions report that civil servants across Whitehall are being urged to get in touch with them, and pinging emails to long out-of-date contacts because few officials in the Conservative governments of recent years had reason to stay in touch.

Rayner was given a standing ovation at the traditional council dinner with union leaders in Brighton’s Grand hotel on Monday evening, which fellow cabinet ministers Angela Smith and Anneliese Dodds also attended.

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“This government isn’t afraid to say that we want to see stronger trade unions … This is who I am, and this is what I will fight for,” Rayner told them in an after-dinner speech peppered with jabs at the Tories.

Despite her background as a union official, however, Rayner’s allies say she is determined not to be pigeonholed as “the union whisperer” and has a wider brief than workers’ rights. And, in fact, it is Jonathan Reynolds’ department for business and trade that will pilot the legislation through parliament. Starmer recently appointed Claire Stewart, previously of Unison, to liaise with unions on behalf of Downing Street.

Much of the new deal is about enhancing individual workers’ rights, but it will also create a historic opportunity for unions by giving them rights to organise in workplaces – something the movement’s leaders hope could mark a step-change in union representation.

Clancy said: “The significance of the plan to make work pay and the employment bill cannot be underplayed, they are a once-in-a-generation opportunity to improve workers’ rights in this country.”

However, the unions claim they are still waiting for another long-promised aspect of Labour’s plans for government – a coherent industrial strategy. The TUC congress coincided with alarming news from the UK’s industrial sector. The closure of the blast furnace at Port Talbot was confirmed, with 2,500 workers to go – albeit with the business secretary having secured better terms for their departure.

Scotland’s Grangemouth oil refinery is also to close down, it was announced on Thursday. Another 2,500 jobs at British Steel’s Scunthorpe site are also under threat, while the embattled shipbuilder Harland & Wolff in Belfast has not been offered the taxpayer bailout workers had hoped for.

Labour has promised a muscular industrial strategy, centred on creating hundreds of thousands of jobs in green technologies, with more detail on steel in particular expected soon.