Unions unite to defeat Blair over PFI plans

Union leaders inflicted a significant defeat on Tony Blair yesterday as they forced through a conference call for a full-scale independent inquiry into links between the private sector and public services.

Delegates cheered as a coalition of Labour's largest union backers, including Unison, the GMB and the Transport and General Workers' Union, pushed through a motion attacking the use of PFI, only the second conference defeat for Mr Blair since he became Labour leader.

It accused ministers of failing to deliver on promises to prevent the creation of a two-tier workforce and attacked the Government for pressing ahead with new PFI deals "despite a growing list of failures".

Paul Boateng, the Chief Secretary to the Treasury, was booed and jeered as he attempted to persuade delegates that PFI deals were essential for Labour to deliver on its plans to build schools and hospitals."We cannot put that delivery on hold or even pause while we take a deep breath," he insisted.

Mr Boateng faced the rare indignity of slow hand claps and calls of "rubbish" and "sit down" as he wound up an angry debate on the use of PFI in the private sector.

Sixty-seven per cent of delegates backed the rebel motion, with just under 33 per cent against, after the call for a review of PFI was overwhelmingly supported by the trade unions.

But Labour leaders took heart from a breakdown which showed that a majority of constituency delegates rejected the call.

After a series of card votes, delegates also rejected a hasty statement from Labour's national executive backing PFI and threw out a composite motion backing the Government's stance.

The revolt broke out despite personal pleas from John Prescott, the Deputy Prime Minister, and Gordon Brown, the Chancellor, not to break down funding for new public services.

Mr Brown said: "Having promised at the election that we would put schools and hospitals first, we must keep our promise to the people; it is our duty to deliver. When the plans are drawn up, the building workers are there, and the money provided, the public will not tolerate delays."

Dave Prentis, the Unison general secretary, called on ministers to " take a long hard, honest look at where we are."

John Edmonds, general secretary of the GMB, said: "Over and over again the price of PFI failure is paid for by cuts in staff, cuts in quality and a reduction in patient care."

Union leaders had dropped their call for a moratorium. But Mr Edmonds asked: "If the Government is so right and we are so wrong, why doesn't the Government want a review so they can prove their case to the public?"

Bill Morris, the T&G's general secretary, added: "Giving foundation hospitals specialist status represents a vote of no confidence in the hard-pressed staff toiling day in, day out to prop up the public sector because, in part, of a lack of public investment. If we go down this road we will break the bond of common good, free from government, free to buy, free to sell, free to hire, free to fire, free from any sort of democratic accountability."

Constituency delegates and MPs lined up to support PFI. Martin Salter, MP for Reading West, said: "PFI can and has helped us to make up for years of under-investment".

He asked delegates: "Don't ask us to return to our constituencies and explain to Labour voters that the new hospital they were hoping for will now be delayed because we have confused dogma and delivery. Don't vote for delay and confusion."

Siobhain McDonagh, MP for Mitcham and Morden, told union leaders: "The reports and reports on PFI stretch from here to the Edinburgh Royal Infirmary itself."