In his speech (external website) to the TUC conference in Brighton yesterday (Tuesday 9 September 2008), Darling argued that, in order to avoid higher inflation expectations becoming embedded:

[I]n the private and public sectors, pay rises must be consistent with our inflation target [2%]. Otherwise every penny in pay rises will be very quickly swallowed up by higher prices. And we all remember the job losses that followed in the past once inflation takes a grip.

Latest IRS pay data (subscription required) suggests that pay awards could be starting to move upwards: the median basic pay award rose to 3.5% for the three months to 31 July 2008, up from the revised figure of 3.3% in June.

Elsewhere in his TUC speech, Darling contended that, provided the UK workforce demonstrates such a commitment to pursuing economic stability, there is a clear route out of the current economic crisis:

[W]e can deal with the consequences. Provided we do the right thing - provided we don't make the mistakes of the past. And that's why I am confident that we will get through this.

This is a notably more optimistic assessment than that expressed in Darling's recent Guardian interview (external website), in which he described the current economic circumstances as "arguably the worst they've been in 60 years". That interview continued in this gloomy vein:

And I think it's going to be more profound and long-lasting than people thought. [...] This coming 12 months will be the most difficult 12 months the Labour party has had in a generation, quite frankly. Both the general economic situation, and in terms of the politics.

Times political commentator Ann Treneman reports (external website) that the Chancellor's TUC speech was greeted with "politeness verging on contempt" by conference delegates.

• If you are actively involved in your organisation's pay-setting process, we would like to invite you to take part in the 20th annual IRS Pay and Benefits Bulletin Pay Prospects survey of UK private sector reward practices. Each year, this major study looks in detail at how private sector employers set their annual pay review and reward priorities for the coming year. Taking part in our research allows you to compare your expected pay award and reward practices with those of other organisations. The closing date is Thursday 18 September 2008.