Blair speech will try to stem tide of anxiety in Labour

MR Tony Blair must make the speech of his life today to stem a tide of anxiety about "New Labour's" identity and roots, and about…

MR Tony Blair must make the speech of his life today to stem a tide of anxiety about "New Labour's" identity and roots, and about the values it would bring into government.

With opinion polls still pointing to a Labour election victory, Mr Blair will seek to harness his party in a new partnership with the British people. In a clear signal that his "modernising" process goes on, Mr Blair is expected to tell conference that Labour is no longer "the political wing" of the unions. Pre speech trailers say he will tell unions and business: "Forget the past. We are all on the same side now. Our team is Britain."

But the past was continuing to haunt the leadership last night, with Baroness Barbara Castle apparently determined to carry her battle to restore the linkage between state pensions and average earnings on to the conference floor.

The leadership appears confident it will win tomorrow's vote, having secured the support of the pensioners' campaigner Jack Jones in return for reference to a pensions review. But the signs last night were that the powerful GMB union will support Baroness Castle, who said it would he "sheer hypocrisy" for Labour to fail to restore the link.

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The leadership's fear is that the pensions issue could provide a totem for widespread party unease about the pace of internal party reform, the embrace of a seemingly "Conservative" agenda, and the feared neglect of the party's core supporters.

In a bid to meet these fears, the shadow chancellor, Mr Gordon Brown, yesterday pledged to put the "poverty" issue at the heart of a Labour government's agenda. Mr Brown said his proposal for a starting rate of tax of 10p or 15p was "a people's tax cut for jobs".

"Just as a society which values work and opportunity should not impose penal tax rates for its high earners, it is equally important, and matters more for the low paid, that there should not be penal tax rates for the lowest earners.

Mr Brown's aides said later that his speech presaged a concerted bid to ensure that the benefit system did not discourage people from taking up work.

The shadow chancellor said his talk of "tough choices" did not mean the abandonment of ideals. "It is to make the achievement of our ideals possible." The real spending issue was not simply to set in stone £300 billion of Tory spending, "add a few billion more for Labour priorities and call that social justice," he said.

"Our vision and commitment are far greater than that social justice for the people of this country means that we shape the spending of all today's £300 billion and shape it to Labour priorities."