Unions block Blair's big NHS promises

Trade unions won the conference's backing for their call for a halt to the expansion of the private sector's role in the National Health Service. The conference also defied the Government by demanding compulsory pension contributions by employers and employees - and for the state pension to rise in line with earnings.

The rebellion over health policy came only a day after the Prime Minister told the conference that the "old monolith" of the NHS had to be broken down and new providers brought in. Although the result of the vote will not be announced until today, the unions were confident they had mustered enough support for their call for a review of the use of the private sector by the NHS, which they see as back-door privatisation.

Ministers admitted they would lose the vote but insisted they "won the argument", pointing to support among constituency Labour party delegates. They will shrug off the defeat today, saying the Government's policy will not change because it was in the election manifesto.

The attack on the NHS reforms was led by Dave Prentis, general secretary of the Unison public service union. He accused the Government of breaking up the NHS without any consultation and going much further than the manifesto.

He said managers of primary care trusts were fighting for their jobs while health visitors, community midwives, occupational therapists and district nurses were being threatened with transfer to the private sector and "left to the vagaries of the market". This "government by diktat" was "simply not acceptable", he said.

"They are now being told from on high the NHS has to be fragmented, hospitals competing for patients and if an NHS hospital can't compete, can't win contracts, it will close," he said.

But Patricia Hewitt, the Health Secretary, said the NHS needed to use spare capacity in the private sector to achieve the target of ensuring a maximum 18-week wait between a referral and operation by 2008.

"This is not privatisation," she said. "We are not selling off NHS hospitals. We are not turning a public service into a private service."

Treatment by the private sector would account for only 1 per cent of the health budget and 10 per cent of elective operations, she said, and the NHS would remain free at the point of use.

After calls for the profits of private health companies to be ploughed back into the NHS, Ms Hewitt told delegates: "Haven't we learnt that profits are not a dirty word? They are part of a healthy, dynamic economy." The rebel motion on pensions denounced the Government's "attack" on the retirement benefits of public servants and urged ministers to honour a deal that there should be no changes to existing schemes without union agreement.

It demanded state pensions be linked to average earnings and employers and workers should be forced to make contributions. Tom Brennan of the GMB said the blueprint would enable pensioners to "avoid the humiliation of poverty in old age".