Union split may avert defeat on pensions

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Labour leadership was still battling last night to head off a defeat over pensions policy when the party conference debates the crunch issue today.

Labour leadership was still battling last night to head off a defeat over pensions policy when the party conference debates the crunch issue today.

Ministers said they were "not out of the wood" despite Gordon Brown's promise in his conference speech to boost the incomes of all pensioners over the next two years. Some unions signalled that they would not withdraw motions calling for the basic state pension to be raised in line with earnings.

In another setback for Tony Blair, the Transport and General Workers Union is leading a rebellion over the Government's policy on asylum. The union has won its battle for an emergency debate at this week's conference, when it will call for the reversal of the decision to give asylum-seekers vouchers rather than cash benefits.

The unions' resistance on pensions means that the conference could end up facing both ways on the issue today. It could approve union demands for pensions to be increased in line with earnings and also issue a statement supportingpolicy agreed yesterday by Labour's national executive committee.

There were further signs of tension between Mr Blair and Mr Brown over the pensions issue. Close allies said the Chancellor was furious that the Prime Minister agreed to meet trade union leaders in Brighton ahead of today's vote to discuss their demands.

Mr Brown was said to be "gunning" for Sally Morgan, the Downing Street political secretary who acts as a link between Mr Blair and the party, for pressing the Government to compromise. It is believed Mr Brown adopted a more conciliatory tone in his speech after pressure from Mr Blair.

A Blair aide said: "We didn't have to move far to bridge the gap. It wasn't worth having a mega-row with the unions."

One ray of hope for the Government last night was that the union vote - which makes up half of the total - would be split. The public service union Unison was expected to back Government critics, while the GMB general union could be persuaded to adopt a loyalist line.

Rodney Bickerstaffe, general secretary of Unison, said he regretted the government's refusal "to put a stop to the ever-decreasing value" of pensions. He said: "It is important that basic payments are not allowed to wither on the vine. I have heard no guarantee that it will be updated each year so that it doesn't lose its value."

Government representatives had indicated that over the next two years pensions would increase in line with the general level of prosperity, but there was no guarantee after that.

"If someone offers you a bowl of gruel for five days and no assurance you will receive anything after that, what are you going to say?"

Mr Bickerstaffe told The Independent that the Government's plan to introduce new pensioner credits in 2003 did not mean that the basic state payment would keep pace with the growth in wealth.

Referring to the Prime Minister's keynote speech to the conference, Mr Bickerstaffe said: "The Government's plans on pensions are not about bringing the whole country together."

The GMB union was taking a more emollient line than Unison and was attempting to play down the divisions between the Government and the party. However, constituency representatives in particular were expressing dissatisfaction with references to pensions made by the Chancellor of the Exchequer Gordon Brown in his speech on Monday.

John Edmonds, the GMB leader, said: "We were calling for the Government to listen to us and that's what they did. It's clear we have secured significant and real increases for all pensioners and that has always been our priority. Restoration of the link is a means to an end rather than an end in itself.

"It's important we now explain to all pensioners that the Government is genuinely committed to erasing the stain of the 75p a week increase granted pensioners last April."

There was irritation among some delegates that the Chancellor had not provided any figures in his speech, even though he is planning to raise the basic state pension in April by about £5 a week for a single person and £8 for a couple.

Baroness Castle, leader of the campaign for the state pension to be raised in line with earnings, regretted that the only figure announced by Mr Brown was his pledge to raise the means-tested minimum income guarantee from £78 to £90 a week. She told Mr Brown that pensioners were saying: "Don't treat us as paupers, but citizens who have contributed to an insurance scheme all our lives."

Michael Jacobs, general secretary of the Fabian Society, said the Chancellor could have been more direct: "He probably could have been simpler. Part of the problem is that he does not want to look as if he is giving in to pressure."