George Osborne will announce plans to freeze pay for public sector workers living in the poorest parts of Britain, in his budget next week.
Millions could have their salaries frozen for years under radical plans to end the system of national pay bargaining.
Critics have said the move will create an even bigger economic divide between the north and south and plunge parts of the country already struggling financially into an even deeper depression.
Mr Osborne yesterday ordered officials to begin dismantling the decades-old national pay system as part of a wider plan to boost Britain’s competitiveness.
In a direct challenge to the unions, he told a dozen departments to immediately start setting pay according to local living costs.
In some poorer parts of the country, public sector wages could be brought down by up to 18 per cent over time.
The initiative starts with civil servants, but will be rolled out to cover the majority of state workers – including nurses, teachers and prison officers.
Some staff could even have their pay cut and starting salaries for recruits will be lower.
Research conducted for the Treasury shows that public sector workers receive an average 8 per cent pay premium, as well as far better pensions.
But the average masks huge variations. In the South East – where living costs are higher – the public sector pay premium is worth just 0.5 per cent, while in Wales it is worth an astonishing 18 per cent. Teachers enjoy the highest pay premium of any profession.
The Chancellor was originally due to launch the scheme in April 2013. But Treasury sources said Mr Osborne was keen to ‘get on with it’ and had ordered officials to bring the process forward by a year.
0 comments:
Post a Comment