Chancellor taking no risks with UK economy

British chancellor Alistair Darling will today face down critics of the UK government by insisting he will not take unnecessary risks with the economy to provide short-term gains.

Darling will address the TUC Congress in Brighton, where the Government yesterday came under fierce attack as a programme of action and demonstrations was agreed over public sector pay.

There were also calls for a windfall tax on energy companies, but Darling will today argue that a commitment to stability over the last 10 years has enabled Labour to deliver record levels of employment, higher living standards and sustained investment in public services.

He will insist that Britain is well-placed to deal with global economic problems and say that while it is right that borrowing should be allowed to rise to support the economy, every government must live within its means.

The Chancellor will tell the conference: "Our purpose as a government is fairness - to create a society where everyone has the opportunity to succeed, regardless of their background.

"Sustainable growth, higher employment, better living standards, more investment in health, transport, housing and education are all essential if we are to build the fairer society we want to see.

"We should not forget what together we have achieved over the past 11 years and that is why I am determined that we should not put those achievements at risk by taking unnecessary risks with economic stability.

"A stable economy is not an optional extra - it is a means to an end: fairness, rising prosperity, opportunities for all."

Darling is expected to receive a polite reception and will take questions after his speech, but union officials made it clear they wanted to hear evidence that the British government is listening to union demands.

He will also be under pressure after recent admissions that the British economy is facing its toughest test for 60 years and that voters were angry with Labour.

Yesterday, one official said the UK government would only have itself to blame if the Conservatives win the next general election.

That came as shadow chancellor George Osborne attempted to woo union members by publishing an open letter saying they would find a "welcome home" in the Conservatives.

Anger surfaced during the opening debate when delegates criticised the British government's policy of trying to limit public sector pay rises to 2% in the face of rising inflation.

The conference agreed to organise days of action against the pay policy including a national demonstration.

Unions also stepped up their campaign for a windfall tax on the profits of energy firms with Unite publishing a so-called "Dossier of Disgrace" showing how much money firms have been making.

British prime minister Gordon Brown will hear similar messages when he attends a dinner with the TUC general council in the evening.

TUC president Dave Prentis made clear the unions' position yesterday when he urged the Government to make "bold decisions" on pay and taxes.

"What is wrong with a windfall tax? Sharing out the obscene profits of the energy companies would be popular."

And joint Unite leader Tony Woodley said: "The greedy oil companies have made tens of billions and in the next four years they will make an extra £15bn (€18.7bn) from the British public.

"The government must intervene now. Our case for a windfall tax is compelling. It is morally right. I say to the government it's time to do the right thing and protect the most vulnerable in society."

Mark Serwotka, general secretary of the Public and Commercial Services Union, which is threatening a three-month long campaign of industrial action by civil servants over pay, said workers were facing "real hardships".

He said the Government had "totally lost the plot", adding: "We need to challenge the pay policy and co-ordinate our action and get tens of hundreds of thousands of people on to the streets.

"No doubt we will be blamed for letting in the Tories, but the fault lies with Gordon Brown and the Labour Government. If the Tories win the election, the Government only have themselves to blame."

The Congress agreed to organise days of action including a national demonstration against the British government's pay policy.

Brown now faces a winter of protests by civil servants, teachers, higher education staff and other public sector workers over pay.

Downing Street said Mr Brown's comments this evening would be "quite informal and wide-ranging".

His spokesman said: "The prime minister does appreciate and understand the hard work that many people in the public sector do.

"But because of difficult decisions we have taken in the past we have been able to keep inflation lower than it might have been and therefore interest rates lower than they might have been."

On the threat of strikes, the spokesman added: "Of course, nobody wants to see industrial action."