VOTING FOR A NEW BRITAIN: Labour courts Scottish unions

LABOUR MINISTERS yesterday fought to head off a damaging split with public service trade unions at a crucial stage in the Scottish Parliament election campaign.

Gordon Brown, the Chancellor, courted union leaders over breakfast in Glasgow and Donald Dewar, Secretary of State for Scotland, tried to assure activists that workers' pay and conditions would be protected when hospital and school services transferred to the private sector.

"The thing that matters is the provision of the facilities and the jobs that they bring," Mr Dewar told the opening session of the Scottish Trades Union Congress (STUC) conference in Glasgow.

Ministers and union leaders appear to have avoided total humiliation when the conference debates the Private Finance Initiative (PFI) tomorrow, however union criticism of the Tory-inspired funding mechanism remains a running sore.

Coming in the middle of the election campaign, the four-day conference is a mixed blessing for Labour, offering both a platform and the potential for embarrassment.

Alex Salmond, the Scottish National Party leader, had to content himself with addressing a fringe meeting rather than the full assembly.

Mr Dewar's appearance at the rostrum, with his mollifying message on public services and jobs, was brought forward from Thursday, clearing the way for an expected address by Tony Blair.

The nationalists were dealt a blow when delegates backed a motion condemning independence and "narrow nationalism" as contrary to the objectives of the trade union movement. Rejecting any economic case for independence, the motion from the Fire Brigades Union called on the STUC to "disassociate itself from any group which persists in pursuing isolationist and divisive policies which foster prejudice and racism".

The SNP expressed surprise that the motion might be referring to them and pointed out the party had campaigned alongside the STUC against racism.

Mr Brown told trade union and business leaders over breakfast that divorce from the rest of the UK would put 350,000 jobs at risk in Scotland - a claim dismissed by Mr Salmond as "kindergarten economics".

The SNP leader asked if Mr Brown was seriously arguing that trade between Scotland and England would stop after independence.

Ministers' main focus was on the row over the use of private finance and contractors to build and run new hospitals, schools and housing projects.

The present row centres on Edinburgh Royal Infirmary, where a pounds 180m PFI development is under way. Opponents say it will cost taxpayers pounds 900m over the next 30 years and Edinburgh people would still not own a single brick of it.