Blair stands firm on pensions

Blair stands firm over government pensions policy

Prime Minister Tony Blair has said the government will not change its policies on pensions, despite suffering an embarrassing defeat on the issue at the Labour Party conference.

On Wednesday, delegates voted by a majority of nearly three-to-two in favour of a motion calling for the basic state pension to be linked to average earnings.

But Mr Blair pointed out that Labour constituency members backed the leadership by two-to-one - making the defeat an overwhelmingly union vote.

This is an absolute shambles

David Willetts, Shadow Social Security Secretary

Chancellor Gordon Brown and Social Security Secretary Alistair Darling had tried all day to prevent the resolution reaching the conference floor, but Unison leader Rodney Bickerstaffe defied the pressure and forced the vote.

But Mr Blair said on Thursday that the government would not be swayed by the result, adding that restoring the link between pensions and earnings would amount to long term irresponsibility.

'Straightened circumstances'

Although he conceded that the unions represented the views of many pensioners, Mr Blair said he was determined to help those pensioners most in need.

He said there were people like his father who were not in need of more help and then there were those pensioners "living in a council flat in straightened circumstances" who the government should target help at.

Mr Blair told BBC Radio 4's Today programme that the government had sorted the economy out, created one million new jobs and increased spending on schools and hospitals - and now "we are going to do something for pensioners," he said.

But he added: "Labour has to govern with heart and head."

There was a balancing act between all the demands the electorate placed on the government whether it was over reducing fuel duty, getting more police on the beat or raising the pension, he said.

But the government would take decisions if they were right even if it sometimes meant short-term unpopularity.

Earlier, Mr Brown had said: "It is not for a few composite motions to decide the policy of this government - it is for the whole community, and I'm listening to the whole community."

There was reportedly a strenuous behind-the-scenes-effort to forge a compromise and persuade Mr Bickerstaffe to back down on the vote.

'Total humiliation'

Responding to the vote, Shadow Social Security Secretary David Willetts said: "They've (the government) put more effort in the past 48 hours into fixing these votes than they have ever put into looking after the interests of pensioners.

"This is an absolute shambles."

Bickerstaffe: under pressure but refused to back down

Conservative leader William Hague described the vote result as a "total humiliation" for the government.

"This dreadful defeat for Mr Blair follows a day of abortive deals in smoke-filled rooms between Labour leaders and union barons" he added.

Although union and constituency representatives voted finally in favour of withdrawing their motion, Mr Bickerstaffe vowed to force the issue to a vote.

Impassioned speech

He also faced an impassioned conference speech from Mr Darling, who said the government's proposals would mean "more, much more" than restoring the earnings link for Britain's poorest pensioners.

Mr Darling pledged that funds would be made available for "transitional arrangements" in the pre-Budget report, confirming the minimum income guarantee for pensioners would be raised to £90 a week.

But Mr Bickerstaffe told conference delegates restoring the link was his union's policy.