Will Burnham choose PIP over pensioners? PM could signal end of 'triple lock' in Labour speech vowing nationalisations… but go soft on benefits

Andy Burnham could signal the end of the state pension 'triple lock' today as he gives his first Labour conference speech as leader.

The PM is promising to flesh out his plan for an NHS-style social care system - estimated to cost £18billion a year - in a highly personal address to activists in Liverpool.

Two months after ousting Keir Starmer, he will lay out a Left-wing nationalisation drive to give the country 'hope again'.

But Mr Burnham is already facing a backlash as he looks poised to sacrifice the guarantee on pensions in a bid to show he can afford big-spending policies.

The ratchet - which means payments go up by the highest out of inflation, earnings and 2.5 per cent - was introduced by the Coalition Government.

But one of Labour's biggest union donors, Unite, has warned that 'picking the pocket of pensioners' would be 'electoral suicide'.

The move would be particularly controversial as the premier has stubbornly dismissed the idea of cuts to benefits such as PIP, instead making the case for reforms to get people into work.

Andy Burnham (pictured rehearsing his speech) is promising to flesh out his plan for an NHS-style social care system - estimated to cost £18billion a year - in a highly personal address to activists in Liverpool

On a round of broadcast studios before the speech, Labour Deputy Leader Lucy Powell said this morning that Mr Burnham was prepared to take on difficult issues

Cabinet ministers have been refusing to commit to the triple lock beyond this Parliament - although they insist Labour's pledge to keep it until the next election stands.

On a round of broadcast studios before the speech, Labour Deputy Leader Lucy Powell said only that Mr Burnham was prepared to take on difficult issues. 

The backdrop to Mr Burnham's big conference moment is an increasingly stormy economic situation, with the Middle East crisis causing chaos on energy markets.

As he grapples with the books for a Budget on October 28, Chancellor John Healey warned delegates yesterday that there could not be a spending spree like under Tony Blair after 1997.

Inflation, slowing growth and surging debt costs have been eroding Mr Healey's 'headroom' against the Government's fiscal rules, meaning he is likely to need spending cuts or tax rises. The former would be fiercely resisted by Labour MPs.  

Echoing the Liverpool conference's slogan of 'Hope again', Mr Burnham will tell party members that 'hope comes from honesty and from saying the things politicians usually avoid'.

Reiterating his attempt to blame Thatcher and 'Neoliberalism' for the Government's problems, he will condemn the 'flawed thinking of the last 40 years'. 

He will also announce a new publicly-owned 'Great British Grid' in a bid to bring UK energy costs down in line with European nations within a decade.

The PM will say: 'We can't carry on as we are. Politics-as-usual has taken Britain backwards.

'More of the same isn't good enough and isn't going to get us where we need to be.'

Mr Burnham will pledge to take power out of the hands of 'vested interests' give the public sector 'more control of the basics so that we can make it more functional again'.

Renationalisation of the railways is already under way, but the PM will signal he wants further government control of other sectors, including water, energy and housing.

He will make clear the Government is ready to put Thames Water in a 'special administration scheme' if a bailout plan fails, effectively taking public ownership of the debt-laden giant.

Labour sources said full-scale nationalisation of the major utilities is unlikely at this stage because of the enormous cost.

But ministers are exploring other ways to intervene in the market to give the Government greater control, including appointing elected mayors to lead regional oversight boards.

Mr Burnham has said social care reforms will not be in place until after the next election, with Whitehall troubleshooter Baroness Casey carrying out a review. 

The prospect of downgrading the triple lock sparked an immediate backlash from Labour's allies. 

Unite general secretary Sharon Graham told BBC Radio 4's Today programme: 'Instead of going and trying to pick the pocket of pensioners, we need to move over to the other side of the equation and look at things like wealth taxes, way before we try to stop something like the triple lock...'

The Unite general secretary added: 'When we met with Andy this week, it certainly wasn't mentioned.

'But I do think that it's important that Labour make sure that working-class people know that they're on their side, and this would be a direction of travel that would say the opposite to that.'

Asked whether the lock should be reformed to fund social care, Ms Graham said: 'What I understood the National Care Service to be was a universal benefit: everybody paid in and everybody gets out, and that is what actually the principle of that is.

'Going to a group of people who are getting around £12,500 a year in order to pay for it to take away their security is wrong. I think it's morally wrong.'

Ms Powell, who is also the Education Secretary, said the party was committed to the triple lock until the next election - but would not go any further.

She told Sky News: 'We are committed to the triple lock. It's in our manifesto. The triple lock has really delivered for pensioners, in this country, over the course of this Parliament.

Mr Burnham with Chancellor John Healey and Housing Secretary Angela Rayner on a visit to a charity in Liverpool last night  

'I think we're going to see (the) state pension rising by about £2,000-a-year significantly, and that's really important, so pensioners watching your show today can know that their income is secure and will continue to rise over the course of this Parliament.

'I don't know what Andy's going to say about that today, but I know that what he's talking about is this big conversation about solving these big problems, but being really honest with people that they come at a cost.

'They do come at a cost. You can't just solve the social care crisis without having the big conversations about how you're going to do this.'