Darling warns of pay rise danger

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Mr Darling said he believes that Britain can "get through" the current economic difficulties as long as it does 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.

In his keynote speech to the TUC Congress in Brighton, Mr Darling said: "It would be so damaging for us to allow inflation to become entrenched, as it did in the past.

"That's why, 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.

"Hundreds of thousands out of work, as happened in the 80s and 90s. We cannot allow that to happen."

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

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, and said the companies must "face their responsibilities" to help their customers through a difficult period.

But he cautioned those calling for a windfall tax that the Government's ambitions to invest in green energy and alternatives to oil and gas depend on "continuous investment over many years" from the power companies - something which energy producers have warned may be jeopardised by an additional levy on their profits.http://www.tuc.org.uk/(Trade Union Congress)