Union fury over public sector pay plans

George Osborne Mr Osborne is set to outline his Budget plans

Unions have reacted angrily to plans to scrap national pay rates for some public sector workers in the UK.

Chancellor George Osborne is expected to say civil servants, such as Jobcentre and DVLA staff, should have pay brought into line with private sector salaries in their regions.

The Public and Commercial Services union says it would cut regional wages.

The Treasury says public sector pay in some parts of England and Wales is up to 18% higher than the private sector.

Shadow chancellor Ed Balls said he feared the plans would end up in a "free-for-all" and would be difficult to keep public sector pay under control.

Mark Serwotka, general secretary of the Public and Commercial Services (PCS) union - which represents civil servants - told the BBC the plans would be "cruel, economically incompetent and counterproductive" at a time when public sector salaries and pensions were being cut.

The move would mean local factors, such as the cost of living and private sector pay rates, would now be taken into account for public sector workers.


The chancellor wants to rebalance the economy and that means getting private sector companies growing. Scrapping national pay deals for public sector workers might level the playing field... or so the theory goes.

In places where public sector workers are paid more than those in the private sector, Treasury sources say private firms are "crowded out" because they cannot compete with the wage levels.

George Osborne is expected to say in his Budget that factors such as the cost of living in an area, and how much local private sector companies pay their staff should be taken into account when setting the pay of civil servants like job centre workers.

But that would mean setting pay levels locally which the trades unions warn would lead to huge disparities across the country and could drive down pay in the regions.

Treasury research suggests the pay gap ranges from 18% in Wales to 0.5% in the south-east of England.

The plans would initially affect 160,000 civil servants working in Jobcentres, the Driver and Vehicle Licensing Agency (DVLA), and border guards at ports and airports.

But local pay rates affecting up to six million public sector workers could be rolled out from next year.

Treasury officials say it would ensure the UK has "a responsive, modern labour force".

Business Secretary Vince Cable would not confirm or deny the plans but said the idea of having more flexibility in the public sector was "surely right".

He told BBC Radio 4's Today programme: "What we're trying to do is make sure that throughout the public sector there's more genuine decision making at a local level and you have to take into account pay and conditions."

He added: "But it has got to be done very carefully because in the civil service, for example, you have to have career progression and that kind of national consideration has to be woven into the story as well."

A Treasury source told the BBC's Chris Mason the move was not about saving money but about ensuring the UK has "a responsive, modern labour force".

'Totally irresponsible'

The source told our correspondent the move is seen as "pro-growth" because it would help make the private sector become more competitive.

In response to the plans, Scottish Finance Secretary John Swinney said: "This would be totally irresponsible and place further pressures on household incomes at a time when we desperately need a boost in consumer confidence to get the economy moving again."

Meanwhile, Wales's First Minister Carwyn Jones said the government should be trying to improve regional disparities in pay, not making them worse.

Public sector 'pays once again'

Shelley from the west Midlands

Shelley, 50, from the west Midlands, has three children and works at a Jobcentre in one of the more depressed areas of Britain.

This is yet another part of the process of making the public sector pay once again for the crime of being those who spend the nation's wealth, albeit on essential services, rather than those who create it.

This government, like previous Tory governments (for such it is, despite the notion of a coalition) consistently views public expenditure as unnecessary spending, not as the provision of public services.

Moreover, they attempt to present the flow of more going to the fortunate and less going to the bereft as somehow fair and just.

This is, in my view, all part of an ideology dedicated to the ascendancy of the private over the public, of capital over civic.

This Tory coalition won't be happy until we have a Britain they can buy and sell to the highest bidder.

"Surely we should be looking at a situation where we look to close the gap in income between different parts of the UK rather than make it worse, which is exactly what this will do."

And Northern Ireland's Finance Minister Sammy Wilson said he would oppose any attempts by Westminster to set local pay variations in the public sector.

The director of the Institute for Fiscal Studies, Paul Johnson, said the government faced a difficult task because public sector pay was frozen until 2014, and only then due to rise by 1%.

"If you want to introduce differential, it's much easier to do it at a time when pay's increasing more quickly so you can, for example, freeze pay in some regions and raise it more quickly in others," he said.

"If it's only going up 1% on average and you're freezing in some regions, you actually can't do very much unless you're waiting a very long time."

The NASUWT, the largest teachers' union, also criticised the suggestion.

General secretary Chris Keates said: "As usual the chancellor holds up the private sector as the comparator. The inconvenient truth he chooses to ignore is that large organisations in the private sector have national pay and conditions frameworks."

TUC general secretary Brendan Barber said: "Moving to regional pay will not just reduce the pay of millions of public servants, but hit regional economies outside London and the South East when people have less to spend."

Len McCluskey, Unite's general secretary, added: "All this will do is drive workers to the better paid regions, leaving large parts of the country without the professionals essential to sustain local services."

And Ravi Subramanian from Unison, Britain's biggest public sector union, said Mr Osborne effectively wanted nurses and care workers in the Midlands to take a pay cut to fund his 50p tax cut for millionaires in southern England.

"It's the politics of division and it shows that the Tories really are the nasty party," he said.

Mr Osborne initially set out the idea in the Autumn Statement.

At the time, he announced a review of national pay rates for public servants and asked the independent pay review bodies to report back in July.


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Budget 2012

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  • rate this

    Comment number 288.

    Working for the public sector I'm already having a pay freeze, about to have my pension contributions increased, will be forced to work years longer and my children’s tax credits are going. Now my pay is under threat.

    Contrary to popular belief I don’t get a gold plated salary, nor am I able to live a luxurious lifestyle.

    Is anyone actually listening to how desperate life is becoming?

  • rate this

    Comment number 73.

    Regionalising pay will be the best hope for areas lacking of work imaginable. Regions over pay in the PS is the biggest reason companies gain no advantage from locating in the north or other low pay areas. People expect parity with overpaid PS workers. No wonder they live off the backs of state work or benefits. Help them get real jobs cut PS pay a lot.

  • rate this

    Comment number 17.

    All this action will achieve is to create even more depressed areas of low wages, even poorer health and education as the "best" move out of them to achieve a better life style. The South East of England will become one large "well off gated community" at the expense of the rest of the uk.
    Obviously democracy in this country doesn't work any better than soviet style communism did in the USSR....

  • rate this

    Comment number 5.

    When are public sector types going to pull their heads out of the sand and realise that borrowing £100 billion a year to pay their wages and massive pensions is no longer feasible and a recipe for national bankruptcy

    As the departing labour government said:


  • rate this

    Comment number 3.

    I work for the civil service in an affluent area, but don't live in an affluent area. Will my wages be means tested by where I work or where I live?


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