Blair: I'll face down strikers over pay row

Tony Blair has warned that his Government's survival is at stake, as ministers brace themselves to face down a threatened strike wave by public employees.

His message has been reinforced by Gordon Brown, whose public spending plans have been hit by the stock market crisis. The Treasury is more than £1bn deeper in debt than Mr Brown had forecast.

The financial crisis has hardened ministers' determination not to give way to the Fire Brigades Union, which is counting on public support to force the Government to negotiate in the firefighters' dispute. The FBU has rejected an offer of a 4 per cent increase, demanding 40 per cent.

Last week, Mr Blair told a private meeting of Labour MPs: "Just because there's all this going on with Iraq, don't think I'm not completely focused on public services reform because this is what will win us the next election."

A source close to Gordon Brown told The Independent on Sunday: "There is not a penny more for public services above the three-year spending plans already announced."

The tough message rules out any real hope that the firefighters' dispute can be settled before industrial action is due to begin on 29 October. It also raises the prospect of more public sector strikes this winter.

Alan Milburn, the Health Secretary, is facing a potential dispute involving nurses and midwives, who have put in a claim to their review body for a "substantial" pay rise.

Five unions have joined forces to arrange a strike ballot of 70,000 lecturers and support workers in higher education. The result will be announced this week, and could mean a national strike.

There was disruption again yesterday for rail travellers because of a long-running dispute between the train operator Arriva Trains Northern and rail conductors from the RMT union. Arriva claimed that 75 per cent of its services were running.

Another rail operator, First North Western, is locked in a pay dispute with the train drivers' union Aslef. Staff on the Glasgow Metro may also call a strike ballot over pay.

Public sector borrowing in September was £5.2bn – £1bn more than expected – pushing the Treasury £12.4bn into debt in the first half of the financial year, compared with Mr Brown's forecast of £11bn for the whole year.

Ministers privately concede that the firefighters have public opinion on their side now, but predict that it will slip away as the strikes persist.

Nick Raynsford, the local government minister, has urged firefighters to put their trust in a report into the future of the service, written by a team headed by Professor George Bain.

Professor Bain, head of the commission that introduced the national minimum wage, is expected to suggest that fire authorities should be merged to cut administrative costs, and that the money saved could be added to pay. His report is expected on 11 December.

"The Bain Review is clearly fair, and the allegation that he is a government stooge is preposterous," Mr Raynsford said yesterday.

The firefighters' strike will bring yet more inconvenience for rail travellers. London Transport has said that 19 of its deepest Underground stations will close for safety reasons on the days when the fire brigade are on strike, but the RMT has warned that its members may decide to close the entire Underground. Metro systems in Merseyside and Tyneside may also close.