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 11.

    If the equal to the equivalent private sector wage was applied here then I would be earning £15,000 more and have far less responsibility than my "partnered" colleagues.
    Please Mr Clegg, have some dignity about yourself and end this sham of a government.

  • rate this

    Comment number 10.

    I think the Condems are going to be wiped out in the next election. This is a disgrace. Public sector workers are underpaid for what they do, attacks on pensions as well as this current crazy idea will means that the public sector will not attract the talented to some of the most difficult jobs. Nursing, teaching just to name two. Of course NO and CD don't care as they go private for both.

  • rate this

    Comment number 9.

    George Osborne looks very smug on that photo, and I don't blame him. The unions have held the government to ranson on their pension proposals, turning down even the most generous of offers. If the public sector are going to take what taxpayers pays them in one hand, then lets try and take back what we can with the other.

  • rate this

    Comment number 8.

    Keep poor areas poor, classic Tory philosophy. Nothing a deprived area needs more than less money to be spent in local businesses.

  • rate this

    Comment number 7.

    this is just not on!! I am a hard working civil servant who has already had a pay freeze, paying more to my pension and now expected to earn less (or more) due to where I live????????????????? The public and private sector shouldn't be compared. is it really fair that i earn less (or more) than a colleague at the same grade doing the same job but in a different area? NO IT IS NOT.

  • rate this

    Comment number 6.

    As I've said previously an unelected government making changes that were in neither of the coalitions manifesto's. Yet again the public work force are being used as a political punch bag and to pay for "prudence's" management of the economy. I'm seriously thinking of taking my family abroad to get away from this travesty of government.

  • 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 4.

    I am sure this will also mean that in high pay areas (London and South East) that public sector pay will be raised to remain competitive?

    .......Or maybe not?

  • 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?

  • rate this

    Comment number 2.

    I have never worked in the public sector, however this is clearly not the way to go. Imposing pay cuts on millons because they live in "poor areas"?

    This is not Victorian Britain, and saying that nurses, teachers, police etc should be paid less because they live in what the conservative elite consider to be slums cannot be allowed to happen in a modern and progressive country.

  • rate this

    Comment number 1.

    Will this apply to MP's as well? If you live up north down goes the salary.


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