Nationalisation returns to Labour conference agenda

The radical manifesto which Tony Blair insists Labour must produce to justify five more years in power will start to take shape during Labour's annual conference in Brighton this week.

If Mr Blair has his way, the week will be heavily dominated by domestic issues, including his recently brokered deal with the big trade unions, which have guaranteed most of the major economic debates will occur without any damaging rows.

"There are two questions we've got to answer," one of the Prime Minister's closest allies said yesterday: "why a third term, and why New Labour? We have got to show that we can offer a better life for hard-working families".

But apart from the shadow of Iraq hanging over the conference, the Prime Minister has two other problems that could spoil his week.

One will be a call led by the TSSA transport union for the railways to be taken back into public ownership, which has a very good chance of being carried with the backing of most of the big unions.

One of Mr Blair's first acts when he was elected Labour leader 10 years ago was to remove the reference to common ownership from the Labour constitution, and any little whiff of socialism - even if directed at companies as unpopular as rail operators - will bring back bad memories.

Mr Blair's other concern will be what sort of mood his brooding Chancellor, Gordon Brown, will be in. Mr Brown's speech tomorrow morning is being billed as a straight-forward homily on the importance of strict financial discipline at a time of rapidly rising oil prices. But many Labour stalwarts are still absorbing the implication of Mr Blair's decision to put his ally Alan Milburn in charge of election planning, in place of Mr Brown.

The latest blow for Mr Brown's camp is that none of the Chancellor's advisers or allies have been included in the 7.30am daily strategy meetings chaired by Mr Milburn, involving senior party and Downing Street officials.

One insider said: "People will be surprised that Alan Milburn seems to want to run a divisive campaign. They'll wonder why people who delivered two massive election victories are being excluded."

However, Mr Blair's week will be made much simpler by the agreement reached with the four big unions during the July session of Labour's National Policy Forum. The big four - Unison, the TGWU, the manufacturing union Amicus and the GMB general union - put forward a series of demands on workers' rights, pensions and public services, all of which - to their surprise - were agreed without a fuss. This means their main concern in Brighton is to hold Mr Blair to what is already agreed.

However, Unison, the TGWU and the GMB will all back the call to nationalise the railways - which will be highly embarrassing for Mr Blair, who only last week was delighted to be photographed with Richard Branson to publicise his new Virgin tilting trains. The resolution will say Mr Branson's time as a train operator should end when Virgin's west coast franchise expires in 2012.

One of the biggest concerns for public sector unions is that when work normally done by NHS or other public sector staff is farmed out to private firms, agreements reached with the Government over wages and conditions go out of the window, creating a "two-tier" workforce. Tony Blair has said he will put a stop to this.

A resolution tabled by the public sector union Unison - which will be passed without opposition - will criticise the fact it has taken so long and hold him to his promise.

Another resolution from the big unions, with which Mr Blair apparently agrees, will concern rights enjoyed by employees on the continent that do not apply to the UK because the Government has not signed up to the relevant objectives. This mostly affects temporary and agency workers. The resolution will say British workers must have the same rights as those in Europe.

Pensions now matter almost as much to unions as wages, with the disappearance of so many company schemes. The GMB wants the Government to bring in a compulsory second pension on top of the state pension. They will not force a vote on that but will insist employees' pensions are protected by law when companies change ownership, that unions have a statutory right to negotiate pensions, and that the government set up a new pension protection fund.

The conference is also likely to vote that council tenants are not disadvantaged if they elect not to have their estate managed by another organisation, like a housing association. Under current legislation, if council tenants vote to go with such an association, they received government money denied them if they vote to stay with the council.

Tony Blair does not want an elected House of Lords, fearing it would become a permanent challenge to the authority of the House of Commons. Many, perhaps most, Labour members disapprove of having an unelected house. There will be a vote, but the leadership might win this one because the big unions are frankly not interested in the subject.