Digby Jones

Addressing the TUC conference, the head of the CBI has called on union leaders to back the government's agenda for reform of the public services.

At a gathering dominated by union discontent with policies such as higher education top-up fees and the creation of foundation hospitals, Digby Jones also called for a confrontation to be replaced by a constructive agenda for change.

And he warned union chiefs to remember that their members are consumers of public services as well as producers.

"Patients, parents, pupils and passengers must come first. You may be at the sharp end as deliverers - and I don't know what we would do without you - but you are customers as well," he said.

"You know that dedication and money, although vital, are not enough. The government's agenda for reform is here to stay, to make the most of that money and dedication. The need for productivity gains are just as important, no matter where the money comes from."

He said that unions had a "once in a life-time opportunity" to secure major improvements in public services.

"Let's make our legacy one of which our children would be rightly proud. Let's not throw it all away."

Speaking a day after delegates heard calls for a return to secondary action, Jones said there should be no going back on the Thatcher trade union reforms.

"The reputation of the UK as the investment location of choice is due to several factors - the macro-economic stability delivered by this government, low inflation, low interest rates, low unemployment and sustainable growth - but it is also partly due to modern trade unionism," he said.

"My members don't want that to change and they are not alone."

Noting that there are areas where bosses and unions agree, such as training and government procurement, Jones also warned against further union demands that could drive investment overseas.

"Companies are not whinging when they make clear the temptations to move overseas," he said.

"I can tell you now - and I have private meetings with senior business leaders every day of the week - the threats to our jobs are real and I am worried.

"The UK has to retain its pre-eminence as the place to do business in Europe and beyond. If we want quality jobs for ourselves and opportunities for our children we must not fail to rise to the challenge, but the methods of yesterday are not the answer."