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.


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

    Comment number 688.

    its always the citizens of this country who have to suffer do you think any job losses will occur amongst the mp's? no.do you think they will lose the second homes? no. their are tooooooo many government appeassers in this country thats why our standards of living have changed you let them get away with everything instead of supporting your fellow countrymen/women.

  • rate this

    Comment number 687.

    356. justdave

    'I consider public sector employees as "privileged people". They have guaranteed job, pay, pensions, sick leave, working conditions, extra holidays.'

    Guaranteed job ... no, pay .... no, pensions ... up to a point, sick leave ... yes, working conditions ... yes just like everybody else or are you a 19th century miner, extra holidays ... sometimes. Editor's pick? Good grief!

  • rate this

    Comment number 686.

    LaboutTory/Lib Dem? Seriously, what is the difference? 3 cheeks of the same arse now. Depressing.

  • rate this

    Comment number 685.

    JB & Assynt
    You believe the UK labour Party had privileged information about the corruption in the global banking system, an appreciation of esoteric financial instruments that many highly paid professionals in banking claim, retrospectively, to have not clearly understood.
    I remember Dave C praising the banking sector just prior to the crash at the same time he promised to maintain Labour spend

  • rate this

    Comment number 684.

    “ 'AAA has extremely strong capacity to meet its financial commitments.....Isn't that what Cameron inherited from the Labour party”

    No, they inherited AAA – (on negative outlook). The rating France had just before its downgrade.

    It changed back to AAA after Osborne’s budget.

  • rate this

    Comment number 683.

    I guess private sector workers whose quality of life and living standards are decreasing daily resent paying for their public sector neighbours. Times are achanging. Labour bangs on about equality - now they have it - public sector workers losing their pensions, working harder, no job security, no pay rises often no job. Welcome to today's world, all you formerly privileged PS types.

  • rate this

    Comment number 682.

    I have total admiration for the majority working in the NHS. After eighteen years when the Tories failed to invest it certainly needed more money. Unfortunately only 30% was spent on the front line the rest was on management. I believe Labour introduced choice and competition, for which, the Coalition have unwisely suggested introducing the private sector. Labour didn't get it all wrong.

  • rate this

    Comment number 681.

    Actually Labour ARE making sense if they are saying we need pay freezes under the current financial circumstances AND saying they will control the shocking hikes in cost of living at the same time. Should Labour gain power then by all means curb pay increases but ALSO show tough action on energy and travel companies...and all the rest. They must also hammer the speculator.

  • rate this

    Comment number 680.

    Balls is just saying what he thinks people want to hear. What he is actually doing is positioning himself to take over when Ed is sacked. Labour with Ed Balls as leader must be the best present the Tories could ever want.

  • rate this

    Comment number 679.

    Ok. I assume that MPs and councillors are also to be included as public sector workers? I'm a public sector worker, and as long as we are all in the same boat I can accept this.

  • rate this

    Comment number 678.

    Pretty good description of the NL cabinets! Fettes educated Blair, St Pauls "drop the 'Lady' and accent" Harman, Nottingham Boys School Balls: then again you've got the secretarial high jinks from two jags and 'I've done nothing wrong' Blears. Just remind me how many times Mandleson and Blunkett had to resign...I could go on and on but there's a limitation on character use!

  • rate this

    Comment number 677.

    The price of goods or services is what people are willing to pay - nothing more. If you accept £200k is the cost of your house - good for you, it's real value is £30k. Salaries are the reason for inflation, everyone wants more, that puts prices up, when they increase everyone wants more.
    The cost of everything you buy is less than 10% to produce - who is winning from this?

  • rate this

    Comment number 676.

    # 668 Norman Brooke: I agree, but the approach has to be balanced so everyone is proportionately doing their bit. I accept that this is not happening at the moment which is why I am so annoyed about it. There seems to be an 'I'm alright Jack' attitude permeating through the higher echelons of society. However, union calls for higher pay for public sector workers during a recession isn't helping.

  • rate this

    Comment number 675.

    I'm in the private sector and haven't had a raise in pay for almost 4 years while home utilities, television license, car insurance/tax, car fuel, and food prices have all gone up.

    Welcome to the world, Public Sector. It's not great, but it ain't bad neither. Learn to love Pot Noodle. :D (I recommend the chili beef.)

  • rate this

    Comment number 674.

    "AAA: An obligor rated 'AAA' has extremely strong capacity to meet its financial commitments. 'AAA' is the highest issuer credit rating assigned by Standard & Poor's".
    Isn't that what Cameron inherited from the Labour party, who would have had their own austerity package anyway.
    The national debt has been much worse and is recoverable, not by any bankers or politicians, but the Britsh people.

  • rate this

    Comment number 673.

    Whats next for Balls to say....'that theprivate scotr should create jobs'.... well I hate to break it to him and Mr Cameron but the Private Sector is more rotten than the public sector. The reason we have such high youth unemployment is thanks to the private secotr, as the fat cats count their wads of notes, its the actual workers who are left to loose thier homes, families and general life.

  • rate this

    Comment number 672.

    "We introduced pay restraint in 2009, George Osbourne, I think rather unfairly, carried it on."

    So criticizing the Government for the continuation of one of your own policies; hypocrisy of the highest level, yet hardly surprising.

  • rate this

    Comment number 671.

    657. ronald

    ' 30,000+ public service "workers" on more than 100K. Some Union Chief on 87K plus big pension benefits. It is not all about the road sweepers on low wages.'

    Who said it was? Assuming your figure is correct, which I doubt, it doesn't alter the situation for the thousands of low paid workers.

  • rate this

    Comment number 670.

    657. ronald

    Saw a post on another media site today. 30,000+ public service "workers" on more than 100K. Some Union Chief on 87K plus big pension benefits
    You'll never get tory voting judges, barristers, hospital consultants etc to take a pay cut.
    Union Chief's equivalent in the Private Sector receives upwards of £5 million.

  • rate this

    Comment number 669.

    I'm a public sector worker and my pay has already been frozen for 2 years, so this is hardly ground-breaking stuff. I also recently went through a restructuring exercise, in which several colleagues lost their jobs. I think this is justifiable as long as the pain is shared equally - so can we expect pay freezes for bankers etc - and maybe MPs? Or perhaps the number of MPs should be reduced?


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