Ed Balls: Labour cannot reverse public pay freeze

 

Shadow Chancellor Ed Balls: ''Pay restraint is going to have to continue''

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Shadow chancellor Ed Balls has indicated Labour will support a pay freeze for public sector workers in order to help reduce the deficit.

Mr Balls told BBC Radio 4's Today programme that getting people into jobs must come before higher pay.

But trade union leaders have accused Labour of failing to speak up for "ordinary people".

The government announced in November that public sector pay would rise by only 1% in the two years to 2015.

When inflation is taken into account, this is likely to amount to a pay cut.

Mr Balls, in a speech to the Fabian Society on Saturday about his economic plans, said he could not make a commitment to reverse any of the government's cuts.

"I understand the anger in the public and private sectors at that income squeeze but the reality is given the economy failing as it is, that that pay restraint is going to have to continue," he told the BBC.

Analysis

Ed Balls is famous for being the attack dog of the Labour Party. But behind the scenes there's been a discussion about whether his stance on the government's austerity drive has been too rigid.

Polling suggests that Labour needs to do much more to regain the trust of voters by laying out more clearly what the party would do if it got back into power.

In particular, Mr Balls wants to dispel any perception that the party would throw money at every problem. That's why he is now telling shadow ministers that they shouldn't be promising to reverse the government's cuts till more is known about the economic situation in 2015.

Critics on the left have already said that will confuse the opposition's message. But Mr Balls is determined it's the best way to restore credibility with the public.

"And if people expect Labour to say 'we'll just oppose', we can't do that. [It] would be irresponsible because the priority has got to be getting people into jobs rather than people being paid more."

Mr Balls also said that the option of awarding higher pay was not available to any political party.

"It would have been tough on pay for any government. It's going to be tougher because of [George] Osborne's mistakes, but I can't promise to reverse that now."

The BBC's political correspondent Ben Geoghegan says Mr Balls's comments are a clear attempt to counter the accusation that Labour lacks a credible plan for dealing with the deficit and that they've spent too much time defending policies which would involve more public spending.

'A big task'

But Mr Balls's comments are expected to anger many public sector workers and trade unionists.

Start Quote

If Labour doesn't want to be the opposition, then where is the opposition going to come from to this government?”

End Quote Alex Gordon President of the RMT Union

Mark Serwotka, the leader of the Public and Commercial Services union, says his stance is "hugely disappointing" and accused the Labour Party of "emulating the Tories" on many issues.

"Instead of matching them on the cuts they should be articulating a clear alternative and speaking up for public sector workers and ordinary people in society," he said.

The president of the RMT union, Alex Gordon, says Mr Balls's decision to back the public sector pay freeze will cost Labour votes.

"What Ed Balls is announcing is that Labour's given up on opposing those policies," he said.

"I think from the trade unions' point of view, what we're going to be asking is if Labour doesn't want to be the opposition, then where is the opposition going to come from to this government?

"Our members aren't going to stand by and take another two years of this kind of punishment and then turn out at the ballot box in 2014 and meekly vote for a Labour opposition that has supported these punishing cuts."

'Responsible capitalism'

Michael Fallon, the deputy chairman of the Conservative Party, says Labour should now vote in support of coalition plans in the Commons.

"They've got to answer the question of would they actually support what we're doing and why are they still saying that we are cutting too fast when they are not proposing to reverse any of our cuts?" he told BBC Radio 5 live.

In a speech to the Fabian Society in London on Saturday Mr Balls said Labour faces "a big task" to regain economic credibility and win back public trust.

He added that Labour must offer an economic alternative which meets the twin challenges of boosting growth now through temporary tax cuts and investment in jobs and delivering reform over the longer term to build "responsible capitalism".

"The challenge we face is both to set out a radical and credible alternative and to win public trust for that alternative vision," he said.

 

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  • rate this
    -5

    Comment number 448.

    Why do so many cosseted public sector workers think the rest of the population should continue to pay more and more to sustain their unearned lifestyle? It was obvious even to the incompetent and cowardly Labour government that the public sector drain on resources was and is unsustainable.Action should have begun years ago-but one Labour minister after another BOTTLED IT.

  • rate this
    +5

    Comment number 447.

    I've just been made redundant from my public sector "well paid protected job for life".

    On the up side I've found i'm better off on benefits.

    And I get a lie in...

  • rate this
    +16

    Comment number 446.

    Very glad that Labour have woken up to the problems they have caused. Perhaps this will calm some of the ludicrous Union demands which we cannot afford.
    I am self employed and have suffered a 40% reduction in my income over the past 2 years. I also fund all my own pension. I employ two people who haven't had an increase but still have a job. I have nothing else to give.

  • rate this
    +1

    Comment number 445.

    @402.John_Bull
    in a fiat currency issuing state like the UK, Government, The public secor, 'prints' the money & has to distribute it through the economy, it does this by means including employing people who spend, infrastructure spending & giving some to the banks (QE). Private sector workers paying tax are also just recycling public sector money. go learn some basic economics

  • rate this
    +6

    Comment number 444.

    I see a lot of rhetoric in the comments thus far. I agree that we need to sort out the people at the top of public service that get too much for their work, but that's a small number of people in total.

    What is more important is to consider, next time HMG hands out billions in grants, subsidies and so forth, how they can justify them over the cuts they make elsewhere.

  • rate this
    +7

    Comment number 443.

    For all Labour's criticism of vicious Coalition cuts, its now proposing "Me Tooism" - kicking their traditional support in the teeth again. I've always known the Tories hold ordinary working people and good Unions that fight for a decent wage and social justice in contempt. I dont expect it from the ONCE people's party as well. Ordinary people no longer have a prayer.

  • rate this
    0

    Comment number 442.

    Do any of the writers of the 400+ offerings know about or understand the "Social Fund" (SF) debacle? A system that is an open invitation to viral abuse, as are the Civil Servants within it. The SF fails to recoup debt because of an outdated IT package. It would be an interesting stat for the Media to see exactly how much the unemployed actually owe this Country.

  • rate this
    +3

    Comment number 441.

    I am quite right wing in my views but will defend certain areas of the public sector against people who say they don't create wealth. I would define wealth as the ability to acquire goods or services that one needs or wants, therefore things like health, education, defence etc are services that we require and hence wealth creating.

  • rate this
    -2

    Comment number 440.

    #425.tomireland
    Post war spending was going to reduce automatically, since what it was being spent on was no longer necessary.

    What The Atlee govt did was to nationalise private industry, which was then starved of investment, and gradually became uncompetitive and inefficient. Not a favourable outcome.

    No, I wouldn’t privatise everything, I would just spend less.

  • rate this
    -3

    Comment number 439.

    @431 Are you really that much of a fool you need a reply to your backwards assertations?

    Public wages are paid out of tax payers purse, becoming a racist or a biggot wn't reduce the budget.

    But apparently becoming an idiot helps you ignore the real problems...

  • rate this
    -4

    Comment number 438.

    Perhaps before taking much note of what Ed Balls says everyone should read what Winston Churchill wrote about Socialism:
    "Socialism is the philosophy of failure,
    the creed of ignorance, and the gospel of envy,
    its inherent virtue is the equal sharing of misery"

    And it was not Cameron who left a note saying "No money Left"

  • rate this
    +12

    Comment number 437.

    "They have guaranteed job, pay, pensions, sick leave, working conditions, extra holidays. "

    Utter rubbish. Have you been living in a cave for the last twenty years?

  • rate this
    +3

    Comment number 436.

    402.
    John_Bull Tax avoidance and off shoring =deficit to treasury revenue which = increased taxation direct or indirect to taxpayers who pay their fair share. Knock on effect is increased interest charges to pay back borrowings which could be reduced if your freinds stopped avoiding tax. No argument. The unacceptable face of capitalism.

  • rate this
    -6

    Comment number 435.

    A lot of these public sector jobs are just fake jobs created by the Labour government anyway. Question: do we want to pay you more for carrying out your fake job that has only been created so you don't sit on benefits? Answer: no, we're in a recession thank you very much.

  • rate this
    -2

    Comment number 434.

    This almost demonstrates that going into the last election labour new the situation and never actualy wanted to win as they had no stomac to lead us though these tough times with Tony jumping off the boat without warning it was sinking

  • rate this
    +15

    Comment number 433.

    I'm a public sector worker with one of those gilt edge pensions. After 35 years of contributions @ 6 half % of my wages. Working night shifts, weekends and bank holidays. I will have grand sum of £80 a week when I retire. This isn't about private v public sector, everyone is entitled to a living wage.

  • rate this
    -3

    Comment number 432.

    384.Polly8122
    29 Minutes ago
    @365.steve1955
    You won't get any replies because it would be a rude question to ask and potential career suicide. It is also a question no private sector employee would ever ask for the same reasons.


    IF THEY ARE SO GUTLESS TO ASK THE QUESTION GET THE UNION BIG MOUTHS TO IS AKING THE BOSS A RELEVANT QUESTION A SACKABLE OFFENCE PLEASE ADVISE?

  • rate this
    +5

    Comment number 431.

    Stop talking about freezing pay for public sector workers! If we all need to suffer more to save the economy that was not screwed up by us then put up NI again or increase income tax, then everyone suffers.

    I would not be right to ask gay people to have a pay freeze. Its not cool to say only Welsh people must have capped pay but it alright to pick out public workers!

  • rate this
    +1

    Comment number 430.

    I work for a Government Agency where fees charged for services should cover costs (including wages).Worked there for nearly 24 years & current position includes word "executive" but salary is still

  • rate this
    +7

    Comment number 429.

    402.John_Bull .
    "Public sector tax is just recycling the same money back to the govt who acquired it in the first place from the private sector. This is basic stuff!"
    Similar then to private sector tax payed from earnings acquired either from supplying the government or its employees, or either of these indirectly. I guess this model does not fit your customers then John?

 

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