Keir Starmer warns unions of tough decisions over pay

Sir Keir Starmer has warned unions of "tough decisions on the horizon" over pay, saying the government will "not risk its mandate for economic stability".

In a speech to the Trade Union Congress in Brighton, the prime minister said his policies would be both "pro-business and pro-worker".

He criticised those "still stuck in the 1980s who believe that unions and business can only stand at odds".

But Sir Keir said the "crisis" his government had inherited from the Conservatives meant difficult decisions on spending were needed.

After winning power in July's election, Labour moved to offer above-inflation pay rises for workers in a number of sectors, aimed at resolving long-running strikes.

However, in his speech Sir Keir - the first PM to address the congress in 15 years - said: "This government will not risk its mandate for economic stability, under any circumstances.

"And with tough decisions on the horizon – pay will inevitably be shaped by that."

In response to the speech, Gary Smith, head of the GBM union, said the above-inflation pay awards already in place were "positive" but "this must be a start and not a finish".

Daniel Kebede, head of the National Education Union, said Sir Keir had failed to show "the direction of travel has changed under a Labour government".

"Instead of setting out a positive vision to rebuild the economy and our society, he served up more of the same,” he said.

"Tough choices to be made, things getting worse before they get better and the burden to be borne by working people and their families."

Sir Keir also called for a "politics of partnership" between government, business and working people.

He insisted "business leaders are not knocking on my door saying they want to rip up employee rights" .

Like unions, he said they want "fair taxes, high skills and the long-term ability to invest".

Ahead of the election, Labour sought to woo business leaders to support the party and now claims to be both the party of business and workers.

It has promised a package of reforms to strengthen workers’ rights, including the right to protection against unfair dismissal, parental leave and sick pay from day one for all workers, and banning "exploitative" zero-hour contracts.

Union leaders have warmly welcomed Labour’s election victory and have praised the party's plans on workers' rights.

But some are concerned pressure from business groups could see the measures watered down further, after some pledges were diluted even before the election.

The Institute of Directors said business leaders were concerned about the impact of the proposals on the cost of employing staff, saying businesses would be less likely to hire new workers as a result.

Conservative shadow business secretary Kevin Hollinrake claimed there were "howls of opposition from business leaders" about the government's plans.

"[The prime minister] is just doing his union paymasters' bidding, raising taxes and drowning businesses in a tidal wave of new French-style rules and red tape," he said.

The PM's promise to scrap Conservative-era legislation which enforced a higher threshold for strike action and to deliver "the biggest levelling up of workers rights in a generation" prompted cheers from the audience of union members.

But he also faced a heckle of "tax the rich" during his speech.

On Monday, delegates at the congress voted overwhelmingly in favour of a wealth tax on the richest 1% of the population to help fund public services and the NHS.

There has also been criticism from union leaders of the decision to scrap winter fuel payments for millions of pensioners.