Labour insists public sector pay freeze must stay

ED BALLS’S warning that Labour would not reverse the freeze on the pay of public sector workers has raised the prospect of unions considering quitting the party, it emerged yesterday.

The Shadow Chancellor sparked fury among officials of unions affiliated to Labour when he said in a major speech that public sector pay restraint was now “inevitable”.

Unions representing millions of teachers, nurses, council staff, civil servants and other public sector workers are embroiled in a bitter dispute with the government over changes to pensions and are also campaigning against a decision by Chancellor George Osborne to cap pay rises to 1 per cent a year.

Balls said in his speech to the Fabian Society: “However difficult this is for me, for some of my colleagues and for our wider supporters, we cannot make any commitments now that the next Labour government will reverse tax rises or spending cuts, and we will not.

“Pay restraint in the public sector in this parliament would have been necessary whoever was in government.

“But George Osborne’s economic mistakes mean more difficult decisions on tax, spending and pay. It is now inevitable that public sector pay restraint will have to continue for longer in this parliament.”

A senior source at one of Labour’s biggest affiliates said it was now inevitable that the union conference this summer will vote on whether to remain affiliated to the party.

“Let the taxpayer foot the bill is the likely outcome,” he said.

“This is not an alternative economic approach – it is pure balls. It guarantees that Labour will lose the next election.”

Bob Crow, leader of the Rail Maritime and Transport union, which is not affiliated to Labour, accused Balls of betraying the party’s union supporters.

“By lining up with the Tory-led coalition on the assault on public sector pay, Ed Balls will today sign Labour’s electoral suicide note,” he said.