Blair faces crucial conference

Trying times for Prime Minister Tony Blair

BRIGHTON, England -- Amid picketing protesters and an opinion poll slump, Britain's Prime Minister Tony Blair is mounting a defence of his government at his Labour Party's annual conference.

The conference, at the seaside resort of Brighton, will feature a speech by the prime minister on Tuesday which will attempt to regain some political momentum.

During recent weeks his government has faced public anger at rising petrol prices, division within government ranks over state pension payments and a political donations controversy.

Labour MPs have been unnerved by recent opinion polls putting the party behind the opposition Conservatives for the first time in eight years.

Already Blair has appealed to women delegates at the conference not to abandon the party despite what he described as testing times.

"We hold firm. We stick to what we believe in," Blair said to several hundred women gathered in a Brighton hotel reception room on the eve of the annual conference.

Several hundred demonstrators staged a protest outside the conference venue on Sunday.

The major conference set-piece on Monday will be delivered by Chancellor Gordon Brown -- the government's finance minister -- who is also under pressure to loosen the public purse strings to win back some favour.

But Brown is set to refuse to give in to pressure to cut taxes, maintaining his long-held devotion to economic stability.

He will tell that party faithful that there will be "no sudden lurch in taxation or spending policy, no irresponsible pre-election spree or pay demands we cannot afford."

The chancellor has consistently said demonstrations, which earlier this month spread across the UK demanding a cut in fuel duties, would not pressure him into changing tax policy.

On Sunday Blair spoke in chorus with his chancellor: "These are testing times, but we are not just doing the right things, but for the right reasons as well," he said, acknowledging that some of his policies were not overly popular.

But Blair is keen to present a harmonious front.

"Today's Labour party is more united than ever," he said. "I got such a good reception at the trade union meeting I started to get a bit nervous."

Brown is also sticking to his guns on money for hard-pressed pensioners.

Polls indicate the elderly are turning their backs on Labour after an increase of 75 pence ($1.09) a week in the state pension this year.

The government says a minimum income guarantee for poorer pensioners, winter fuel payments and free television licences add up to a generous package on top of the 75p rise.

Brown has signalled he will increase the minimum income guarantee but reject a link with average earnings, which have risen far faster than inflation in recent years.

The Prime Minister and the Chancellor are also under political pressure over a £1 million ($1.4 million) donation to the Labour Party by Formula 1 chief Bernie Ecclestone.

The donation was made before the last election -- while Labour was in opposition -- but caused a furore in the UK when the party subsequently won the general election and then exempted Formula 1 from a ban on tobacco advertising in sport.

A new book claims that the chancellor lied over knowing about the donation. Brown has denied the allegations made in the book but that has not stopped the Conservatives calling for Brown's resignation.

Reuters contributed to this report.

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10 Downing Street
Britain's Treasury Department
Britain's Labour Party

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