Liverpool — Britain’s unions gather this week for a key annual conference, facing a tough future as recession threatens to cut public spending and force the defeat of ally Labour at an upcoming general election.

Polls suggest that Labour — led by Prime Minister Gordon Brown — will lose power to the main opposition Conservatives at the election that must be held by mid-2010.

The annual conference of the Trades Union Congress (TUC) begins on Monday in Liverpool, an English port city famous for its industrial disputes as well as The Beatles and the Premier League football club of the same name.

On Friday, Brown hosted union leaders for private talks, described by The Times newspaper as "a charm offensive… to pacify Labour’s disgruntled trade union paymasters, who are warning that the party may already have lost the next election".

Brown’s office said the talks had been "constructive", while the prime minister is on Tuesday set to address the TUC — a body bringing together more than 50 unions representing about six million mostly public-sector workers.

"There is a general feeling that Labour will be defeated (at the next election) and there’s clearly a lot of uncertainty about what the future will be for public sector finances," said Steve French, senior lecturer on industrial relations at Keele University.

"If public finances become the centre of government policy, this will be an area where there’s going to be lots of tensions (with unions), irrespective almost of the government of the day," French told AFP.

He added: "If cuts are needed because public sector borrowing has gone up so high and tax revenues are down because unemployment has gone up (…) where are the areas you are going to make savings?

"The obvious one is in the public sector, which either means job losses or certainly holding pay down, perhaps further privatisation — all of which are areas which we would imagine there to be a response or resistance from the relatively organised trade union," he said.

Britain has yet to officially follow France, Germany and Japan out of recession in the wake of the financial crisis, as the number of unemployed people in the country heads towards three million.

Brown is expected to warn unionists Tuesday against abandoning Labour, as Britain is on the "road to recovery", but the economy is still "fragile".

"People’s livelihoods and homes and savings are still hanging in the balance, and so today I say to you: don’t put the recovery at risk," he said, in leaked extracts from his speech.

When Tony Blair led Labour to poll victory in 1997, Britain said goodbye to 18 years of Conservative rule under the leadership of prime ministers Margaret Thatcher and John Major.

Blair was elected partly on a pledge to the wider community that he did not intend returning the country to union working practices seen in Britain under Labour during the 1970s that Thatcher set about crushing.

On becoming prime minister, Blair further won over union leaders by offering workers better rights, such as a minimum wage and greater flexibility for working parents.

However relations soured as Blair and then finance minister Brown ordered a mass cull of public sector jobs long before the financial crisis erupted last year.

Britain is currently suffering a series of postal strikes over pay and jobs that threaten to turn into a national walkout, while union leaders have hit out at Labour over its handling of the financial crisis.

"Labour has got to be more clear that it is on the side of working people, rather than give the impression it backs big business," Derek Simpson, joint leader of Britain’s biggest union Unite, said last week.

"You save the banks, invest in the banks, relieve them of toxic debt, leave people running them that ran them before, don’t act incisively on the bonus culture and see 10,000 ordinary bank workers made redundant. What conclusion do you draw from that?" he told The Guardian newspaper.

AFP/Expatica