Unions criticise Ed Balls's pay freeze comments

Unions have accused Labour of failing to speak up for "ordinary people" after shadow chancellor Ed Balls indicated the party would support a pay freeze for public sector workers.

The government has said public sector pay will rise by 1% in the two years to 2015, which is likely to amount to a pay cut once inflation is factored in.

PCS union leader Mark Serwotka said the comments were "hugely disappointing".

The RMT rail union suggested the stance could cost the party votes.

Neither the PCS or RMT are affiliated to the Labour Party.

Mr Serwotka accused the Labour Party of "emulating the Tories" on many issues.

"It's hugely disappointing that the Labour Party are just emulating the Tories on many issues," he told the BBC.

"On the one hand, Labour seem to be saying the coalition are going too far, too fast... but on the other hand saying we would have to make the same tough decisions," he said.

"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."

Income squeeze reality

In a speech to the Fabian Society, shadow chancellor Ed Balls said he could not promise to reverse any cuts and said Labour faced "a big task" to regain economic credibility.

He said Labour needed to offer an economic alternative that met 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.

Ahead of the speech, Mr Balls told BBC Radio 4's Today programme: "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."

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

The president of the RMT union, Alex Gordon, said: "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?"

RMT general secretary Bob Crow agreed, saying Mr Balls was signing "Labour's electoral suicide note".

'Responsible capitalism'

Michael Fallon, the deputy chairman of the Conservative Party, said 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.

The deputy leader of the Liberal Democrats, Simon Hughes, said it was time that Labour came to its senses, but argued that it would not gain them any electoral advantage.

He added: "They can't have it both ways. They can't be hugely critical of the government one day and then say they'd have the same policy the next."

Fabian Society general secretary Andrew Harrop said there was "an unanswerable case for an immediate stimulus package followed by long-term fiscal discipline".

"If anything Ed underplayed the scale of the economic challenge. If the world economy takes a tumble this year the fiscal injection he proposes will be too modest," he said.