We're not going to allow workers to be left in limbo when a public service contract transfers from one company to another

Patricia Hewitt

Ms Hewitt's cool reception came despite a promise that the government would safeguard the pensions and employment rights of workers transferred to private contractors.

Earlier, TUC president Bill Morris warned the government that it would be morally wrong to depend on private companies to run schools and hospitals.

The minister tried to salve union anger with the launch of proposals to strengthen the regulations (known as TUPE) that protect workers' rights when a business changes hands.

Workers' protection

Ms Hewitt said current measures were "not working properly" in the case of workers whose jobs had been moved from the public sector to a private company and then on to another firm.

"We're not going to allow workers to be left in limbo when a public service contract transfers from one company to another," she told the conference in Brighton.

The quality of our public services defines the moral state of our nation

Bill Morris

"We won't allow our public servants to be short-changed, that's why I'm going to strengthen protection for those workers and their occupational pension rights."

Ms Hewitt said the wholesale review of the Employment Relations Act would result in legislation this parliament, if changes were deemed necessary.

She also sought to reassure the most beleaguered sector of the British economy by dubbing herself "the minister for manufacturing".

Earlier Sir Ken Jackson - general secretary of the AEEU, which represents manufacturing workers - told a BBC News Online forum that Tony Blair should appoint a specific minister to represent the sector.

'Obsession' attacked

The annual conference was opened on Monday morning by Mr Morris attacking the government over its "obsession" with its plans to shake up public services.

Ministers are trying to head off a union revolt after Unison leader Dave Prentis warned there could be industrial action if workers' terms and conditions became worse.

In his speech, Bill Morris accepted the need to reform public services but rejected the plans to increase private sector involvement.

Mr Morris called for "meaningful dialogue"

Later, he told BBC Radio 4's World At One programme: "Nobody is arguing about the importance of improving public services. The issue is how do we do it.

"Here we have got the private sector, which is saying 'unless we can continue a laissez-faire chopping of terms and conditions, we are not interested'.

"I say it's a good opportunity for the government to lay down the quality of improvement that it seeks, to engage the workers and their representatives in a meaningful dialogue and we will deliver."

Concentrating on the theme of social justice, Mr Morris also called for respect for asylum seekers and called for an end to the "demeaning" voucher system.

Contract delays

The proposed reform of the TUPE regulations comes after it emerged that contracts to build and operate the next 29 private finance hospitals had been delayed because the contractors are refusing to promise to safeguard the pension and employment rights of health workers.

The GMB has released figures suggesting that private companies could make about �3bn from the private finance initiative in the NHS alone.

Under the scheme, private businesses would use their own money to build hospitals and then rent them to the NHS, keeping the profits for themselves.

GMB general secretary John Edmonds told Monday's Guardian newspaper that Tony Blair threatened to "crack the foundations of the Labour party" through the public-private plans.