Gordon Brown issued a stark warning on pay to public sector unions yesterday, saying that some awards must be paid in stages and that his 2 per cent ceiling on rises would not be breached. His remarks, his toughest on pay since he became Prime Minister, came as prison officers’ leaders prepared to resume talks with the Government after their wildcat strike over a staged pay deal.

Mr Brown’s words were aimed at workers across the public sector and were intended to bury any lingering hopes among unions that he would soften the hawkish stance on pay settlements he adopted throughout as Chancellor in order to buy their support.

They follow a flurry of renegotiated pay settlements in which ministers have agreed to raise pay rates over the 2 per cent threshold for some of the lowest-paid health workers, civil servants and local government employees, although in each case the overall settlements remained within the limit.

Leaders of the Prison Officers’ Association would not rule out strikes as they prepared for renewed talks today with Jack Straw, the Justice Secretary, despite their voluntary no-strike agreement. A walkout from jails on Wednesday, abandoned after a court injunction forced them back to work, was over a decision to fund a 2.5 per cent pay deal in stages, cutting its value to 1.9 per cent.

Mr Brown said that he would continue to stage pay rises if necessary to preserve a stable economy and low inflation. “We have succeeded in tackling inflation and having a stable economy as a discipline in pay over these last ten years. That discipline will have to continue,” he said during a visit to a health clinic in London.

“The staging of the pay awards is an essential part of controlling inflation in the economy, keeping interest rates and mortgage rates low for homeowners and making sure that we have stability. And we do nothing, nothing that will put that at risk. It is an absolutely essential element of maintaining discipline in the economy so that people have jobs, people have higher standards of living and at the same time we have a stable economy that yields low interest rates.”

His stance drew an angry response from prison officers’ leaders, who demanded that their pay deals were renegotiated as ministers had done with health workers and firefighters. Colin Moses, chairman of the POA, told the BBC: “My members, in the ten years he is talking about, have had year-on-year cuts in their salaries. The last two years we have had a below-inflation pay award and he wants to ask why we can’t recruit the prison officers at the rate we should.”

The starting salary for a prison officer is £17,700. According to the Office for National Statistics a prison officer earns on average £508 a week, compared with £386 ten years ago. The average weekly wage of a nurse is £514, up from £292 in 1997. The pay review body said prison officers were paid up to 39 per cent more than counterparts in private jails and had better pension and holiday entitlements.

The Royal College of Nurses is to hold a special conference next month on whether to take industrial action on the decision to stage a 2.5 per cent pay deal in England.

The row comes as Mr Brown prepares to face union leaders next month at his first TUC as Labour leader, when the Public and Commercial Services union has tabled a resolution demanding coordinated action against freezes in public sector pay. The subject may dominate the conference despite last-minute improved offers in health and local government.

The Government improved its pay offer to the health service from a staged 2.5 per cent increase to an immediate increase of more than 2.5 per cent for the bottom four bands of employees, made in different stages.

Last week an offer of 2 per cent for local government workers was increased to 3.4 per cent for the lowest ranks of workers. Unison, the biggest health union, is balloting workers about the offer, with a result due on September 13, the last day of the conference. If the deal is rejected, there may be a ballot for industrial action.

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