Brown hits back with pledge on pensions

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Gordon Brown hit back at his critics and won over the Labour Party conference yesterday by promising more money for all pensioners while standing firm against demands for a cut in petrol duty.

Gordon Brown hit back at his critics and won over the Labour Party conference yesterday by promising more money for all pensioners while standing firm against demands for a cut in petrol duty.

The Chancellor received one of the warmest responses he has received from a party conference after a combative speech in which he said he was listening to the voters but insisted that he would stick to his long-term economic strategy.

Mr Brown devoted a large section of his speech to pensions, the policy issue that is dominating the Brighton conference, in an attempt to head off a defeat for the leadership when it is debated tomorrow.

Although he rejected the calls for the basic state pension to be raised in line with earnings, Mr Brown hinted strongly that his draft Budget in November would include an inflation-plus rise in the basic pension.

He conceded that the Government had "much more to do" on pensions. "We have to do more not just for the poorest but for millions more, all those pensioners who have yet to share enough in the rising prosperity of the country.

"We will build upon the basic state pension. The basic state pension is now and willremain the foundation of everything we do."

Mr Brown promised that a new pensioner credit, to beintroduced in 2003, would direct money at low-income andmiddle-income pensioners, who would receive more cash each year than would be provided by an inflation-based or earnings-based rise.

In the meantime, there would be transitional arrangements "to the benefit of all pensioners" and he would publish a detailed plan in the next few weeks. Crucially, Mr Brown emphasised the word "all" to point delegates towards a big rise in the basic state pension.

However, the Chancellor insisted the state pension could not be raised in line with earnings. Today, he said, one in six couples retired on an income of more than £400 a week, a figure that in time would rise to one in three.

"It is a progressive principle that we should do more for those who have the greatest needs," he said. "Our priority cannot be that the wealthiest get exactly the same as the neediest. A flat-rate increase will not do enough to help pensioners on modest incomes and do nothing to diminish growing inequalities but instead reinforce them."

He confirmed that the minimum income guarantee, which now tops up the £67 basic pension to £78 a week for people without other income, would rise to £90.

He reassured the conference by announcing that the Government has asked the Low Pay Commission to report next year on a rise in the national minimum wage, which could rise from £3.70 to £4 an hour. He promised morefamily-friendly measures, including action to make it easier for women to win equal pay, better maternity pay and leave, more childcare provision and the right to take time off when a family member was sick.

On fuel, the Chancellor said the Government would do everything possible with Britain's international partners to ensure that oil production increased and the price of crude oil came down.

In the run-up to his Budget, he would listen and make his case to the farmers and hauliers involved in the fuel protests. But he said he would also listen to nurses, health workers, teachers and public servants and those who depended on public services.

He promised that future Budgets would include "targeted tax cuts" rather than the "blanket, irresponsible" cuts offered by the Tories which, he said, would put the long-term future of public services at risk. He called for a "great national debate" on "the choice" on tax and spending.

The Chancellor also heralded the prospect of tax cuts to boost enterprise in deprived areas.

By next year, 250,000 young people would have moved from welfare into work. Mr Brown said the prospect of full employment in a generation and Labour's boost for pubic services "did not just happen - the priorities and tough decisions of a Labour government made them happen".

He went on: "We will not return to the old short-termism. There will be no sudden lurches in tax or spending policy. And there will be no irresponsible pre-election sprees or pay demands that put youth jobs or any jobs at risk."