Unions warn Labour over austerity measures Published on Tuesday 17 January 2012 11:09 Labour faces electoral "disaster" because of its decision to embrace austerity measures including support for capping public sector pay, the leader of the country's biggest union has warned. Len McCluskey, general secretary of Unite, said Shadow Chancellor Ed Balls" announcement that Labour accepted the Government's public sector wage freeze put the party into conflict with millions of poorly-paid public sector workers. Officials from unions affiliated to Labour were left fuming over the weekend after Mr Balls told a conference that he backed the Government's cap on the pay of millions of workers. They privately warned the move could lose Labour the next election, but Mr McCluskey has now spoken out publicly. Writing in the Guardian, he said: "Ed Balls" sudden weekend embrace of austerity and the Government's public sector pay squeeze represents a victory for discredited Blairism at the expense of the party's core supporters. It also challenges the whole course Ed Miliband has set for the Party, and perhaps his leadership itself. Unions in the public sector are bound to unite to oppose the real pay cuts for public sector workers over the next year. When we do so, it seems we will now be fighting the Labour front bench as well as the Government. "It leaves the country with something like a "national government" consensus where, as in 1931, the leaders of the three big parties agree on a common agenda of austerity to get capitalism - be it "good" or "bad" - back on its feet. Where does this leave the half a million people who joined the TUC's march for an alternative last year, and the half of the country at least who are against the cuts? Disenfranchised. Mr McCluskey rejected the argument that pay restraint will help create jobs and criticised the Labour Party for its failure to consult with trade unions before making the "shift" in policy. "Notwithstanding that it impacts on millions of our members, it is hard to imagine the City being treated in such a cavalier way in relation to a change in banking policy," Mr McCluskey continued. His leadership has been undermined as he is being dragged back into the swamp of bond market orthodoxy. Unions founded Labour and now supply around 90% of the party's funds. A spokesman for Mr Miliband last night rejected Mr McCluskey's attack. "Len McCluskey is wrong about our policy now and our approach for the future," he said. And Len McCluskey is wrong about what the last week showed for the Labour Party - a party united in it determination to pursue fairness even in tough times, make capitalism more responsible, and protect our priorities. The defence came after Mr Miliband told Labour MPs and peers he had "the stomach for the fight" and warned there are more "tough choices" to be made over spending. The opposition leader delivered what aides called an "uncompromising" message about challenges facing the party in a behind-closed-doors meeting last night. Addressing 150-plus politicians in the weekly meeting of the Parliamentary Labour Party, he defended Mr Balls" announcement, saying Labour could not make any promises to reverse that or other tax rises and spending cuts. "It is a difficult decision but it is the right decision," he said. We have to show that we have faced up to these difficult decisions. It will require us to take courage, to be bold and radical. Oppositions don't win because they have the right values; they win because they have the stomach for the fight. I know I have stomach for the fight. I know you have the stomach for the fight.