Pay freeze row sparks strike fears

Jul 5 2009

Chancellor Alistair Darling has failed to rule out a pay freeze for public sector workers, sparking warnings of possible industrial action from union leaders.

Mr Darling said wage levels, to be announced within weeks, would have to reflect the low level of inflation and be "fair" to private sector workers facing a recession-fuelled pay squeeze.

He was responding to a call from the head of a spending watchdog for £5 billion to be shaved from the wage bill to help the economy recover from the downturn.

Audit Commission chief executive Steve Bundred said workers, including those in the NHS and education, would "tolerate" a freeze as they had "done well" over the last 10 years.

Shadow business secretary Ken Clarke also said the move should be considered among other options and criticised what he said had been an "absurd explosion" in previous years.

"Public sector pay obviously has got to reflect prevailing conditions, and in particular inflation has come way down," Mr Darling told Sky News' Sunday Live. "And of course we have got to be fair with regard to people who work in the private sector, many of whom have seen their pay conditions somewhere near freeze."

But the prospect was greeted with fury by unions.

"Any interference is bound to be disruptive and could lead to unnecessary calls for industrial action," Brian Strutton, national officer of the GMB, said.

And Unison general secretary Dave Prentis argued: "Low-paid public sector workers, who will be helping communities through the recession, shouldn't be expected to pay. At the same time, city bonuses are making a come-back with figures that most workers can't dream of earning in a lifetime. That is wrong."

The Prime Minister is expected to use this week's G8 summit in Italy to warn world leaders against complacency and insist that public spending should not be cut.