Brown faces pensions anger

Brown may drop hints about pensions

By BBC News Online political correspondent Nick Assinder

Chancellor Gordon Brown will address the Labour conference on Monday afternoon amid widespread anger at his stand on pensions and fuel tax.

In one of his most difficult conference speeches ever, he will seek to head off growing rebellions over the two issues which are threatening to further damage the party's credibility.

I will be explaining to the conference what it is possible to do and what it is difficult to do

Gordon Brown

Core Labour supporters are still furious at the 75p increase Mr Brown gave pensioners this year and the issue is turning into the next crisis for the government.

Delegates and key unions are piling pressure on the government to restore the link between pensions and average earnings - once a proud Labour policy.

Powerful unions, led by Unison and the GMB, are leading moves which could see an embarrassing defeat for the government on Wednesday.

John Edmonds, the GMB general secretary, has warned the issue is the government's "single biggest electoral liability".

Tony Blair has already ruled out restoring the earnings link although it is believed some sort of compromise will be hammered out in time for the vote.

Head of steam

Mr Brown, meanwhile, will have to face delegates' anger before then and may well want to hint at future changes in a bid to stop a head of steam building behind the rebels.

At the same time, there is still widespread anger at what many saw as Mr Brown's unbending attitude to the fuel tax protests.

Mr Blair and other ministers have talked about "listening" to the protesters, and hinted there may be changes in the chancellor's autumn statement in November.

Mr Brown, on the other hand, has said he will not be blown off course by short-term fluctuations in oil prices.

And as he arrived for Labour's conference, he warned against any "sudden lurches" in policy, which had brought economic instability in the past.

The chancellor said he would instead focus in his keynote speech on the need for a "great national debate" on tax and spending.

But he held out an olive branch to campaigners calling for a big rise in the state pension, saying the government had listened to people's concerns.

"I will be explaining to the conference what it is possible to do and what it is difficult to do. Our job is to serve the people of this country," he said.

Prescott's rallying call

The chancellor is certain to face some hostility when he makes his keynote speech to delegates in Brighton.

For the first time, his reputation as the most capable minister is being challenged and he will have to face much of the flak over the government's current troubles.

Meanwhile, deputy prime minister John Prescott is also expected to do his bit to keep traditional Labour voters on side with his conference speech.

He has regularly been used by Labour leaders when they want to reassure disillusioned core supporters that they can still be trusted.

Last year he resisted making his usual end-of-conference rallying call but many believe he may use his speech on environment and transport to try to turn the tide of disaffection.

But he too may face criticism for the apparent conflict between the government's hints on reducing fuel tax and its previous commitment to keeping prices high to spare the environment.