Balls under fire over pay stance

The Labour leadership was facing growing anger from unions tonight over public sector pay amid warnings that the party will lose the next election with a "watered down" version of the Government's policies.

Shadow chancellor Ed Balls was the target of attacks for sticking by his support for the current freeze on the pay of millions of public sector workers - a stance which saw him heckled at the recent TUC Congress.

GMB leader Paul Kenny has drawn up a dossier of "Balls Ups" he said were made when Mr Balls was in government, which he plans to read out at a fringe meeting at Labour's annual conference in Manchester tomorrow.

Len McCluskey, general secretary of Unite, warned that Labour will lose the next election if it does not connect with workers, saying that the public sector pay freeze was also starting to have an impact on workers in private firms.

The row broke out on the first day of Labour's annual conference and was threatening to overshadow events in the coming days, when the party is planning to turn its fire on the coalition and present Ed Miliband as a credible future prime minister.

The Labour leader hit back at the unions, saying Mr McCluskey was "wrong" to oppose a public sector pay freeze and insisting Labour under his leadership would be "the party of the private sector" as much as the public.

He sought to use the row to show that the movement was not "pulling our strings", telling BBC1's Andrew Marr Show: "It's not going very well for him is it? You can't say at one and the same time that Len McCluskey is saying 'you're wrong on pay restraint' and then say we're giving in to him and he is pulling our strings."

Asked about the pay freeze, he said: "He is entitled to his view but he is wrong. We've got the right policy to say we put jobs in the public sector ahead of pay rises. That's what we said we would do this parliament. It is a difficult decision but it is the way to keep jobs in the public sector."

The row will flare on the conference floor on Monday when union officials will call for the party to condemn the government's pay freeze.

In a speech to delegates, Mr Kenny will say that Labour will have to go into the next election with a leadership the public can connect with, not those "damaged or dented by past mistakes which have not been owned up to."