Union warning on Brown pay deal

The TUC has warned ministers they need to resolve the pay row

Gordon Brown's plans for three-year public sector pay deals have met with a cautious response from trade unions.

The PM says the deals, which would replace current annual awards, are needed to maintain long-term stability.

But his decision to limit public sector pay rises to 2% prompted unions to warn of a "collision" with workers.

The Police Federation said a "one size fits all" approach would be unfair to officers. The GMB says three-year awards would amount to a pay cap.

The police will be the first public servants to be offered the agreement. The BBC has learned that ministers are also in talks with nurses' unions.

Mortgage rates

Public sector pay rises are recommended by an independent body which this year suggested 2.5% increases.

But the government decided to award it in two stages - which equates to a 1.9% rise - saying it would help keep inflation and interest rates down.

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Royal College of Nursing general secretary Dr Peter Carter said many public sector workers had felt "betrayed" by that decision.

He told the BBC the RCN was interested in discussing three-year deals with the government if they could get a "fair deal".

But he added: "Our members are actually going to be very cautious because they've still not recovered from the bruising they received last year."

Inflation/pay link questioned

The budgets of Whitehall departments are set for three-year periods and ministers want pay awards for nurses, the police and other public servants to be fixed in the same way.

Mr Brown said staging the awards last year had "helped break the back of inflation in Britain in 2007".

"Now in 2008, we have to show that we can maintain stability over the long term," he said.

There is growing anger among police officers over their pay award

"To send out the best possible message, about long-term inflation and about stability and to be fair to public sector workers, one way forward is a move towards long-term public sector pay settlements.

"It means as people face mortgage bills and utility prices they know exactly what their income is likely to be.

"The whole purpose of this is keeping inflation under control... There is no point in a big salary rise that's wiped out by a big inflation rise."

But Paul Kenny, head of the GMB union, which represents 300,000 public sector workers, told BBC Radio 4's World At One programme he had never seen any evidence that public sector pay was key to inflation.

He said it amounted to a crude cap on public sector pay: "Can you tell me what the price is going to be of your litre of petrol in two years' time?

"Because I can't predict that and yet what the government seem to want to tie us into is a deal which will come at the bottom of the cycle."

'Winter of discontent'

Jan Berry of the Police Federation said they also did not accept the argument that controlling public sector pay was important to control inflation.

She said her union remained "in dispute" with the government over pay and said any "one size fits all" approach to public sector pay would be unfair to police officers.

Their terms and conditions are different to other workers - police officers do not have the right to strike.

Chancellor Alistair Darling says the new longer-term agreement will guarantee earnings growth for 5.5 million workers and will allow departments to plan more effectively

The government clearly wants to be very tough on public sector pay Vincent Cable Lib Dems

However, the TUC says the government's pay target of 2% has put it on "a collision course with six million public servants".

TUC general secretary Brendan Barber said long-term pay deals could be agreed but only on certain terms to give workers "real confidence" their living standards would be protected.

"Confidence badly needs to be rebuilt after last year's railroading through of below-inflation rises and the undermining of independent pay review bodies," he said.

'Nothing new'

Shadow chancellor George Osborne said there was "nothing new" about three-year pay deals as hundreds of thousands of public sector workers, like teachers, were already on them and said the real reason for the announcement was Mr Brown's "economic incompetence".

Thousands of prison officers walked out in August over pay

Lib Dem deputy leader Vincent Cable warned that being too tough could result in a second "winter of discontent", when the country was regularly crippled by strikes in 1978/9.

"The government clearly wants to be very tough on public sector pay," he said, but "they are going to have to be very careful about how they manage this".

The staged public sector pay rise prompted disputes with the police in England, Wales and Northern Ireland, prison officers in England and Wales, civil servants, the NHS and local government.