Unions urge Labour unity as threaten more strikes

By Matt Falloon

BRIGHTON (Reuters) - The Labour party must stop infighting and do more to ease the economic downturn, union leaders said on Sunday, threatening further strikes this year over public sector pay.

Prime Minister Gordon Brown has faced calls from within his party to step down as the government loses favour with voters worried about slumping house prices, higher living costs and rising unemployment.

Unions, who have provided about three-quarters of the Labour Party's funding this year, fear that disunity and a lack of decisive action on the economy, especially public sector pay, will result in defeat at the next election due by mid-2010.

"If there is an impression of squabbling in the highest ranks of the Labour government. I don't think that would impress too many ordinary people who are worried about their jobs and living standards," Brendan Barber, head of the Trades Union Congress told reporters ahead of its annual conference in the seaside town of Brighton.

Workers have become increasingly militant over Labour's policy of pegging public sector pay rises to the official 2 percent inflation target, with more than a million workers taking industrial action in the past year.

The inflation rate is running at 4.4 percent and is expected to jump towards 5 percent in the coming months thanks to sharp increases in food and fuel prices.

The Public and Commercial Services Union said on Sunday it would ballot 270,000 civil service staff to strike over pay from November. The biggest teachers union is balloting members and other government workers could also strike this winter over pay.

Unions are also concerned that a divisive leadership debate will have dire consequences as the political party conference season that could decide Labour's fate gets underway.