'Workers Could Face Losing Right To Strike'

Unions are being warned they face tougher strike laws if co-ordinated action by public sector workers damages the economy.

Business Secretary Vince Cable will workers "are undoubtedly entering a difficult period" when he addresses the annual conference of the GMB union.

He said he expects "significant parts of the public sector" to join a day of industrial action in protest at cuts in spending, jobs, pay and pensions later this month.

Union leaders have warned that 750,000 teachers, lecturers, civil servants and other public sector workers could take co-ordinated strike action on June 30 in the biggest outbreak of industrial unrest for years.

But Mr Cable will tell the 500 GMB delegates at their Brighton conference: "The usual suspects will call for general strikes and widespread disruption.

"This will excite the usual media comments about a summer or an autumn of discontent, and another group of the usual suspects will exploit the situation to call for the tightening of strike law.

"We are undoubtedly entering a difficult period. Cool heads will be required all round.

"Despite occasional blips, I know that strike levels remain historically low, especially in the private sector. On that basis, and assuming this pattern continues, the case for changing strike law is not compelling.

"However, should the position change, and should strikes impose serious damage to our economic and social fabric, the pressure on us to act would ratchet up.

"That is something which both you, and certainly I, would wish to avoid."

Aides have emphasised that Mr Cable will want to make it clear that the Government feels there is no case for changing strike laws at the moment and that unions have acted responsibly so far.

IMF says no changes are needed to UK economic policy

The government has welcomed an International Monetary Fund (IMF) report which has said that no changes are needed to UK economic policy.

The IMF said weak economic growth and rising inflation had been "unexpected", but that they were "largely temporary".

But its annual report also warned that there were still "significant risks" which may need a policy response.

It predicted the UK economy would grow 1.5% in 2011, down from its forecast of 1.7% in April and 2% in November 2010.

But it maintained its medium-term forecast at 2.5%.

"I welcome the IMF's continued strong support for our overall macroeconomic policy mix, including our deficit reduction strategy," Chancellor George Osborne said.

"The IMF have publicly asked themselves the question 'whether it is time to adjust macroeconomic policies' - in other words, is it time to change course? And they have concluded definitively that 'the answer is no'."

But shadow chancellor Ed Balls said Mr Osborne should not take too much comfort from the IMF report.

"It says it all about George Osborne that he hails an IMF forecast that implies rising unemployment and predicts slower growth. His complacency about the state of the economy is concerning," Mr Balls said.

High uncertainty

The IMF pointed to rising commodity prices and the increase in VAT as temporary problems for inflation.

It predicted that inflation would remain above 4% for most of the year, but would return to its target rate of 2% by the end of 2012 as oil and food prices settle down.

At a news conference, IMF deputy director John Lipsky warned that, "uncertainty around the central forecasts remains high", as it does in many other economies.

Policies suggested by the IMF if growth remained low for an unacceptably long time included expanding the Bank of England's programme of asset purchases, known as quantitative easing, or having a temporary tax cut.

Mr Lipsky added that "the unemployment rate remains unacceptably high but it seems to have stabilised".

The chancellor will have been cheered by the IMF's conclusion that his programme of spending cuts and tax rises remains "essential".

But the IMF's analysis is unlikely to end calls for alternative economic plans.

"It's probably not surprising that you're getting a lot of nervousness about what the UK government is doing, which is still unique in an international context," Aidan Manktelow from the Economist Intelligence Unit told the BBC.

"I think the government's going to have to live with nervousness over its approach and calls for a more growth-supporting strategy for some time now."

'On the mend'

The IMF said that continuing low interest rates from the Bank of England would help companies and individuals pay off their debts as well as boosting investment and exports.

But there were some politically resonant caveats, according to the BBC's economics editor Stephanie Flanders.

She said that last autumn, IMF staff thought the UK was "on the mend". This latest, more sober assessment, was that the "post-crisis repair of the UK economy is underway", she pointed out.

She added that in private there had been considerable concern at the IMF last year about the pace of the government's deficit-reduction plans, but that in public the organisation had continued to endorse them.

The IMF also reported on the state of the UK's financial services sector on the grounds that its health was important to the global economy.

"The financial sector definitely remains in the recovery phase," Mr Lipsky said, adding that "further improvements in the quality of supervision will be required".