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ConservativeHome has learnt that the unions are holding back money from Labour's election fighting fund and instead choosing to build up a war chest with which to fight the Conservative government that they expect to be elected next year. The relatively benign economic years of the recent past have meant the unions have not had to fund much strike pay and the coffers of the public sector unions, in particular, are overflowing.

A very good source tells ConHome that the unions have as much as £25m to spend on campaigns to oppose cuts in the public sector workforce and in public sector pay.

PoundAttackToday's Daily Telegraph splashes with the news that public sector pay continues to grow under Labour: "The Office for National Statistics disclosed that, in the three months to October, state workers received an average annual rise of 2.8% This was close to triple that seen in the private sector, where pay edged up by 1.1%. Many private employees have been told that their pay will be frozen next year and have had Christmas bonuses withheld." Even before the recession Labour had allowed public sector pay to catch up with private sector pay but had not forced public sector workers to sacrifice some of the securities they received as a traditional substitute for less remuneration.

With unions paying 70% of cash-strapped Labour's bills you can understand why Gordon Brown is soft on their excesses.  Today's Sun Says column bemoans the Prime Minister's failure to attack the "ruinous" strike plans of BA cabin staff.

The unions plan to invest much of their warchest in internet campaigning as well as traditional media. They plan constituency-based web campaigns to build opposition to particular cuts in local services as well as national online petitions. MPs in marginal seats will be the focus of their plan to "unleash hell".

The unions' campaigning will be a massive headache for the Conservatives but may also damage Labour's long-term electoral prospects if a new form of left-wing activism of the kind we have seen in the US is born.  The unreasonableness of America's left-wing "netroots" has often damaged the Democrats.  The hostility of the unions and their intransigent opposition to desperately needed spending cuts will also rally Tory core voters and the Tory press to David Cameron's side.

Tim Montgomerie

> In September I proposed a four-point plan for thwarting the public sector union barons.

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