Will Labour's nerve hold on public sector pay?

Even Labour’s traditional allies are circling, looking to take advantage of the wounded animal staggering along below. Today it’s the turn of the country’s biggest public sector union to have a go. Unison has refused to accept the 2.45% pay deal offered to public sector workers and is to ballot 900,000 people on whether to strike.

Not only does this utterly confuse the maxim ‘keep your friends close but your enemies closer’ (just where do you keep friends who also have turned out to be enemies?) but it raises a couple of interesting questions. The first is whether Gordon Brown will stick to his guns. In almost every interview he’s done in the last day or two he’s put great stay by how good the government has been at keeping public sector pay down. If he backs down under union pressure he’s unlikely get away with it in the same way the government did in 2005 when it caved into union pressure about civil servants’ pensions.

Secondly, is this all one hilarious joke by the union? One of the great drivers of inflation is increased wages (as this gives folk more money to spend). So for unions (for surely more will follow) to say increasing wages suddenly for up to 1 in 5 of the population will make things better is at best hopeful and at worst, downright naïve. Of course there is the argument that it’s food and fuel that’s driving inflation and pay levels have nowt to do with it (as trotted out here by Polly Toynbee). If that is really true then let’s all hike up our salaries and live the Life of Reilly now the link between pay and inflation has finally been broken. About time too.