DIGBY Jones, head of business lobby group the Confederation of British Industry, last night stepped off the plane into another row north of the border, two years after becoming embroiled in controversy over his remark that anti-English sentiment was damaging the Scottish economy.

Addressing an audience of 800 business people at the CBI Scotland annual dinner, Jones attacked the trade union movement, accusing it of becoming ''increasingly irrelevant'' because of its ''outdated'' notions about the world of work.

In 2002, Jones was labelled an ''English prat'' by Scottish Liberal Democrat MSP Ross Finnie, the environment and rural development minister.

Sparking a fresh rift with Scottish industry, Jones told the audience at the Hilton hotel in Glasgow that fewer employees needed a union because rising skill levels meant workers were more resistant to exploitation.

He added that employees were ''perplexed'' by the way union leaders competed to be more militant than one another in a bid to attract new members. Jones said: ''They just don't get it. They are doing no more than marching valiantly towards 1970.''

The Scottish TUC reacted with anger to the claims. Bill Speirs, STUC general secretary, said: ''I am astonished at Digby Jones' remarks.

''While the STUC work with the Scottish Executive and a range of employer organisations on a day-to-day basis to improve Scotland's product-ivity, Digby has yet again parachuted in to Scotland undermining our joint work and lecturing us on the error of our ways.''

Jones urged the unions - which meet for their annual convention later this month - to ''reform and, by encouraging flexibility, help the nation win the battle for competitiveness or wither on the vine of growing irrelevancy''.

He added: ''The only protection people need in a tight labour market with skills shortages is to be so adaptable, trained and valuable that no employer would dare let them go or treat them badly.''

Acknowledging that some workers still need unions, Jones said that the millions of unskilled employees remained vulnerable to exploitation, a problem which the unions could help fight.

However, he added that where the labour market was stuffed with skilled workers, unions stuck in the mindset of yesterday's ideology became less relevant.

In a scathing attack on union values, Jones cited some unions support for the Working Time Directive and the Agency Temps Directive as he blasted those who inhibited personal choice and destroyed flexibility.