Brown heads for union clash over three-year pay deal

The government was yesterday warned against “macho posturing” over public sector pay, as union leaders criticised proposals to offer workers three-year pay deals.

Gordon Brown wants public sector workers to accept low-cost long-term pay deals.

Outlining the proposal at his monthly press conference yesterday, the prime minister said long-term pay settlements would guard against inflation and create stability for both the economy and public sector workers.

But with unions criticising the government’s handling of public sector pay to date, Mr Brown’s proposal has been met with criticism, with workers concerned the pay deals offered by the government will not keep pace with the rising cost of living.

The TUC said it was not opposed in principle to long-term pay deals but its members would need to know what sort of level the government had in mind.

General secretary Brendan Barber said people would need “a lot of persuading” that three-year pay deals would not erode living standards.

The government has been uncompromising in its insistence public sector pay deals must be kept below 2.5 per cent in order to avoid inflation.

Mr Brown yesterday reiterated the argument that there is little point awarding teachers, police officers and nurses generous pay rises if these are then wiped out by inflation.

But talking to Channel 4 News Mr Barber said few people had been persuaded that pay has been responsible for pushing inflation up. He pointed out most economists identify rising energy costs and food prices as the causes of recent inflation.

GMB general secretary Paul Kenny concurred there was “no evidence” public sector pay is a key indicator for rising inflation.

Speaking to the BBC’s World at One, Mr Kenny blasted the government’s proposal, before further criticising Mr Brown for his failure to consult the unions and announcing the package through the media.

With the GMB and other unions openly critical of the government, Liberal Democrat economic spokesman Vince Cable warned the government against “macho posturing” over pay.

Mr Cable agreed long-term pay settlements make sense but said this must not be at the expense of review bodies and arbitration.

He said: “Ministers are naive if they imagine that public sector negotiators will hold back in an environment where living costs are rising rapidly and when private sector pay increases are averaging four per cent per year.

“Keeping inflation low is paramount and that means a disciplined approach to pay increases.

“However, the government must avoid a macho approach to public sector pay bargaining, otherwise it will find itself in a confrontational environment of a kind which destroyed the last Labour government in the 1970s.”

The Conservatives meanwhile questioned the furore surrounding yesterday’s announcement, with shadow chancellor George Osborne saying there was nothing new in the proposal for three-year pay deals.

Mr Brown has been talking about them for seven years and many public sector workers including teachers are already on them, Mr Osborne said.

He continued: “The real reason for today’s pay announcement is that, thanks to Gordon Brown’s economic incompetence, Britain borrowed in a boom and now has the largest budget deficit in Europe. The government has run out of money – It’s as simple as that.”