Newspaper article The Journal (Newcastle, England)

Restraint Will Help Britain 'Get Through' Chancellor Urges against Pay Rises

Newspaper article The Journal (Newcastle, England)

Restraint Will Help Britain 'Get Through' Chancellor Urges against Pay Rises

Article excerpt

Byline: Alan Jones

THE Chancellor endured a frosty reception from leaders of millions of workers yesterday when he faced down calls for an increase in public sector pay and a windfall tax on energy firms.

Alistair Darling issued a call for pay restraint when he addressed the TUC Congress warning above-inflation rises risk sparking a damaging inflationary spiral.

He also poured cold water on union hopes for a windfall tax on energy companies to pay for help for those struggling with soaring fuel bills.

His speech was greeted with a few seconds of polite applause, while some delegates held up banners or wore T-shirts critical of the Government.

Union leaders lined up afterwards to express their disappointment with the speech.

Mr Darling said he believed Britain could "get through" the current economic difficulties as long as it did not sacrifice stability by allowing inflation to get out of hand.

He told union leaders they were right to be concerned about "excessive" bonuses in the boardroom but said pay rises for ordinary workers must be consistent with the Government's 2% inflation target - a policy which sparked a series of strikes this year in the public sector and could lead to more.

Mr Darling said: "In the private and public sectors, pay rises must be consistent with our inflation target.

"Otherwise every penny in pay rises will be very quickly swallowed up by higher prices. And we all remember the job losses that followed in the past once inflation takes a grip."

He said the Government will soon announce how it will help people reduce their bills on a permanent basis by making Britain's homes more energy-efficient. He said public sector pay had risen at a faster rate than wages in private firms, but some delegates groaned and shouted out: "No, they haven't. …

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