Tonight:
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Union fury over public sector pay
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The Government is facing a serious clash with trade unions after Chancellor Alistair Darling failed to rule out a pay freeze for public sector workers.
Union leaders warned any attempt to impose real-terms pay cuts would spark demands for strike action and said money should be raised instead from a crackdown on bank bonuses.
Mr Darling said wage levels, to be announced within weeks, would have to reflect the low level of inflation and be "fair" to private sector workers facing a recession-fuelled pay squeeze.
He was responding to a call from the head of a spending watchdog for £5 billion to be shaved from the wage bill to help the economy recover from the downturn.
Audit Commission chief executive Steve Bundred said workers, including those in the NHS and education, would "tolerate" a freeze as they had "done well" over the last 10 years.
Shadow business secretary Ken Clarke also said the move should be considered among other options and criticised what he said had been an "absurd explosion" in previous years.
"Public sector pay obviously has got to reflect prevailing conditions, and in particular inflation has come way down," Mr Darling told Sky News.
But the prospect was greeted with fury by unions. "Any interference is bound to be disruptive and could lead to unnecessary calls for industrial action," Brian Strutton, national officer of the GMB, said.
Unison general secretary Dave Prentis argued: "Low-paid public sector workers, who will be helping communities through the recession, shouldn't be expected to pay. At the same time, city bonuses are making a comeback with figures that most workers can't dream of earning in a lifetime. That is wrong."
And the prospect drew an angry reaction from TUC general secretary Brendan Barber who said: "This call to freeze the pay of all public sector staff - however low paid and however vital their job - is not just unfair, but would make the recession even worse."
