Brown insists prison officers' pay deal will keep interest rates down

Gordon Brown has issued an uncompromising message to prison officers and other public sector workers over pay as he insisted that he would not endanger economic stability by breaking the Government's cap on wage rises.

The Prime Minister risked confrontation with union leaders, declaring that structuring pay deals was "essential" to curb inflation and maintain stability despite growing anger from unions at curbs on pay.

Prison Officers will meet Jack Straw, the Secretary of State for Justice, today for talks in the wake of their unprecedented one-day strike on Wednesday, which brought chaos to the prison system.

The Prison Officers Association has condemned the decision to pay a recommended 2.5 per cent pay rise in two stages, to keep it within the Government's 2 per cent ceiling on public sector pay claims.

But Mr Brown indicated that he was not willing to negotiate over the staged pay deal in a stark warning to the prison officers and other public sector unions.

Mr Brown said: "We have succeeded in tackling inflation and having a stable economy because of discipline in pay over these last 10 years. That discipline will have to continue.

"The staging of the pay awards are an essential part of controlling inflation in the economy, keeping interest rates and mortgage rates low for homeowners and making sure we have stability so we can continue as an economy the 10th an now the 11th year of growth and the 11th year of creating new jobs.

"We will do nothing, nothing to put that at risk, because an absolutely essential element of maintaining discipline in the economy so that people have jobs and high standards of living."

His uncompromising stance was echoed by the Alan Johnson, the Secretary of State for Health, who insisted a deal to boost low-paid NHS workers with a £400 across-the-board rise did not break the Government's pay ceiling.

He told the BBC: "That has not been breached, it has not been breached anywhere in the public sector and it won't be, and that is going to be very much the starting point for the discussions tomorrow."

Health workers are being balloted over the pay deal, which also includes a 2.5 per cent pay rise, which is being met in full in Scotland, Wales and Northern Ireland, but paid in two stages in England.

The Ministry of Justice also played down the prospects of a new pay deal for prison officers. One source said: "There is only so much to go around. It's all taxpayers' money."

But the Prison Officers Association did not rule out further action. Colin Moses, the chairman of the POA, warned that today's talks had to be "meaningful and not merely a stalling tactic". He said: "I trust the Government has listened to the voice of POA members and that a positive outcome is forthcoming."

Mr Brown faces further challenges over pay at next month's Trades Union Congress, which will debate calls for "co-ordinated strike action" in protect at the 2 per cent ceiling on public sector pay.

Conservatives attacked Labour's links with the unions. Chris Grayling, the shadow Work and Pensions Secretary, said: "When you hear Gordon Brown talking tough to the unions, you always have to remember to read the small print.

"The truth is that he is heavily dependent on the unions to fund the Labour Party and his general election plans, and the growing signs of union militancy are a clear sign that they want something back from him in return."