Balls warning sparks union anger
A warning by the shadow chancellor that Labour would not reverse the freeze on the pay of public sector workers has raised the prospect of unions considering quitting the party, it has been disclosed.
Mr Balls said in his speech to the Fabian Society: "However difficult this is for me, for some of my colleagues and for our wider supporters, we cannot make any commitments now that the next Labour government will reverse tax rises or spending cuts, and we will not.
"Pay restraint in the public sector in this parliament would have been necessary whoever was in government. But George Osborne's economic mistakes mean more difficult decisions on tax, spending and pay. It is now inevitable that public sector pay restraint will have to continue for longer in this parliament.
"Labour cannot duck that reality - and we won't. Jobs must be our priority before higher pay."
A senior source at one of Labour's biggest affiliates, said it was now inevitable that union conference this summer will vote on whether to remain affiliated to the party.
"Let the taxpayer foot the bill is the likely outcome," he told the Press Association. "This is not an alternative economic approach - it is pure balls. It guarantees that Labour will lose the next election."
Bob Crow , leader of the Rail Maritime and Transport union, which is not affiliated to Labour, accused Mr Balls of betraying the party's union supporters.
"By lining up with the Tory-led coalition on the assault on public sector pay, Ed Balls will today sign Labour's electoral suicide note as he alienates his core voters in their millions," he said.
But Andrew Harrop, general secretary of the Fabian Society, said: "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.
"And he said that as Chancellor he would not reverse tax rises or spending cuts. Sadly it's likely to be worse than that. George Osborne's failure means any future Labour government will in all likelihood have to make the painful decision to raise taxes or cut spending."