Keir Starmer faces bust-up with unions over pay rise demands for public sector workers

Exclusive: Biggest unions seek higher wage increases and abolition of pay review bodies

Keir Starmer and shadow chancellor Rachel Reeves face a challenge from unions (PA)

Keir Starmer is facing a showdown with Britain’s biggest trade unions who are demanding big pay rises for the public sector if Labour wins the next election.

Unite and Unison will next week challenge the Labour leader’s tough fiscal stance at a meeting of the party’s national policy forum to outline its plan for government.

Motions for the Nottingham conference, seen by The Independent, show that Unite will demand a commitment by Labour to “restore public sector pay levels that have been eroded by 13 years of cuts and freezes”. It also wants Labour to abolish the independent pay review bodies, describing them as “not fit for purpose.” This would raise the prospect of repeated negotiations between Labour ministers and unions in a throwback to the 1960s and 1970s.

Unison is seeking a pledge that Labour will ensure pay “at least keeps pace with inflation”, while the GMB wants a firm promise to reform the way public sector pay is set.

Those demands are expected to be backed by left-wing unions including the Fire Brigades Union (FBU), the Communication Workers Union and Aslef, representing train drivers.

Although Mr Starmer will resist the demands to guarantee a pay boost, the unions plan to take their case to the party’s annual conference in October, where they and constituency parties each hold 50 per cent of the votes and would have a chance of inflicting a defeat on the leadership unless a compromise formula could be agreed. The conference will approve Labour’s policy programme but the final election manifesto will be decided by a joint meeting of the shadow cabinet and the party’s national executive committee, on which Starmer allies have a majority.

The Labour leadership wants the policy forum to approve a weaker commitment to “improve public service workers’ living standards throughout the parliament”. It has warned the party it would have to stomach tough decisions because of the economic inheritance the Conservatives would leave.

Public sector pay accounts for about a third of spending on services, and shadow ministers believe privately their immediate priority should be frontline services. Unions argue that problems in recruiting and retaining staff harm those services.

Mr Starmer avoided supporting or criticising Rishi Sunak’s announcement that he would accept the pay review bodies’ recommendations of rises ranging from 5 to 7 per cent. Labour frontbenchers have not endorsed any of the recent strikes, merely urging ministers to return to the negotiating table. Now the leadership will be forced to make its stance on pay clearer, thanks to the party’s pre-election policy-making process.

Rachel Reeves, the shadow chancellor, angered unions by refusing to commit to the pay bodies’ recent recommendation or promise that a Labour government would stick to their future proposals, saying her fiscal rules were “non-negotiable”. Sharon Graham, Unite’s general secretary, said this statement was “beyond belief”.

Labour declined to comment on the policy forum. Party sources pointed out that Ms Reeves had not seen the pay review bodies’ reports when she made her remarks and could not give a verdict on them until she had.

She promised “fair and affordable” pay settlements. Mr Starmer told Unite’s conference on Thursday that he and the unions have “different roles, different jobs, different ways of fighting for working people” but their shared interest is “the economic security of working people”. He warned there was no “magic wand that could wave away the need for economic stability,” but added: “If Labour cannot break the suffocating hold of low wages we will have failed.”

In another challenge to the Labour leader, the FBU and GMB unions will force a vote at the policy forum on a proposal for Labour to repeal a controversial 2021 bill allowing undercover agents to commit crimes while infiltrating criminal gangs. Labour was divided when the legislation was passed. Mr Starmer ordered his MPs to abstain but 34 who wanted to oppose it rebelled and two frontbenchers resigned.

Other issues on which the leadership could come under pressure include calls for free school meals for all primary schoolchildren and to end the two-child limit on benefits, grassroots members’ support for proportional representation, and Mr Starmer’s pledge to “make Brexit work”, which Labour’s pro-Europeans want to beef up.