Unions hit back as Balls hints at cuts Ed Balls prompted a backlash from union leaders on Monday as he warned that a Labour government would have to make cuts and would not "flinch" from difficult decisions on spending, pay and pensions. Len McCluskey, leader of the Unite union - Labour's biggest donor - accused the shadow chancellor of offering a "false choice of jobs or wages" by accepting the need for a public sector pay freeze. Dave Prentis, head of Unison, meanwhile said Mr Balls was "wrong morally and wrong economically" to support the policy. Privately the Labour leadership will not lose any sleep over this criticism from the unions, believing that such comments can only improve the party's reputation for fiscal prudence. Mr Balls narrowly averted the prospect of the Labour conference voting for a motion "condemning" the pay freeze after it was watered down to merely "note" the freeze. The shadow chancellor has promised to carry out a "zero-based spending review" within a year of his party getting into power, which would involve an examination of every area of government spending. Coalition aides have ridiculed this idea, claiming that it is a device for Labour to avoid hard choices and firm commitments until after May 2015. Mr Balls used his conference speech to call for a spending spree on social housing and a stamp duty holiday for first-time buyers using the £3-4bn raised by the imminent auction of 4G mobile phone spectrum. The move appears to have pre-empted plans by George Osborne to announce new capital spending by the Treasury using the proceeds of the auction: "Balls has made a tactical error by going first," said one Tory aide. The Conservatives issued a press release questioning Mr Balls" maths, arguing that the government had already committed £600m from the 4G auction towards the business department's science budget. The Tories also claimed that his target of 100,000 new affordable homes would cost £1.4bn more than the shadow chancellor had estimated. But Labour insisted that their figures had been agreed with the National Housing Federation, the umbrella group for housing associations. Mr Balls separately announced a review of Britain's infrastructure, to be chaired by Sir John Armitt, former chair of the Olympic Delivery Authority. The move is an attempt to grab the "Olympics legacy" mantle from Mr Osborne, who recently appointed Lord (Paul) Deighton, former chief executive of the Olympics organising committee, to become a junior Treasury minister. The chancellor is putting in place an infrastructure strategy that includes project guarantees and the underwriting of social housing bonds. Mr Balls is engaged in a difficult balancing act in seeking to send out a message of fiscal responsibility while claiming that the coalition is cutting too hard and too fast. In his speech he praised the Labour government of 1945, which set up the NHS, built new homes and rebuilt the country - even with a national debt "double the size of ours today." Yet he sought to temper this free-spending message by insisting that a Labour government would have to show fiscal responsibility, just as the Attlee government also made "tough and unpopular decisions" such as introducing prescription charges, continuing rationing and cutting defence spending.