Labour averts showdown with unions

Labour's leadership has averted a head-on clash with unions at the party's annual conference, amid simmering tensions over pay restraint and cuts.

A proposed union motion condemning the current pay freeze for public sector workers was watered down, avoiding the danger of defeat for leader Ed Miliband, who insists that preserving jobs must take priority over pay rises.

The motion finally passed this afternoon merely "noted" the freeze, but union bosses insisted they had the conference behind them in their demands for it to be lifted.

Shadow chancellor Ed Balls promised Labour would "rebuild Britain for the future", with a new independent cross-party commission to take the politics out of major infrastructure projects like airport expansion, nuclear power plants, wind and tide farms, flood defences, roads and railways.

Announcing the appointment of former Olympics chief Sir John Armitt to draw up a blueprint for the commission, which would consider projects stretching up to 40 years into the future, Mr Balls warned that business was "losing confidence" in the Government's "ridiculous" dithering and indecision over issues like high-speed rail and a third runway for Heathrow.

"The lesson of the Olympics is that if we approach major long-term infrastructure projects by building a cross-party sense of national purpose, then we can deliver," said the shadow chancellor.

"We need a comprehensive long-term plan to rebuild Britain's infrastructure for the 21st century, and a cross-party consensus to deliver it."

In his keynote speech to the conference, Mr Balls confirmed details of his proposals to revive the ailing construction industry by using the estimated £4 billion proceeds from the sale of the 4G superfast internet spectrum to build 100,000 new homes and offering a stamp duty holiday for first-time buyers of properties under £250,000.

But he made clear these were calls for immediate action by the Government, and not policies for Labour's election manifesto.

In a tough message to unions and activists campaigning against cuts, he restated his position that Labour cannot promise now to reverse spending reductions imposed by the coalition.