Spending Review: Public sector wages hit by double attack

Chancellor George Osborne has used his spending review to announce plans to abolish automatic pay increases for public sector workers

Chancellor George Osborne speaking in the House of Commons about his final spending plans
Chancellor George Osborne speaking in the House of Commons about his final spending plans

George Osborne has continued his war on public sector workers with a double-edged pay attack.

The Chancellor used his spending review to announce another 1% pay cap for 2015/16, but also took the chance to go further and confirm plans to abolish automatic pay increases for long-serving nurses, police officers, teachers and other public workers.

In a move which will inflame an already heated relationship between unions and ministers Mr Osborne said the process of allowing staff to have pay rises built into their contracts, regardless of performance, was “antiquated”.

Details announced in the Spending Review mean workers in councils, schools and hospitals will have seen pay frozen or rise only below inflation for six years.

Mr Osborne told MPs: “Progression pay can at best be described as antiquated; at worst, it’s deeply unfair to other parts of the public sector who don’t get it and to the private sector who have to pay for it.

“So we will end automatic progression pay in the Civil Service by 2015-16.

“And we are working to remove automatic pay rises simply for time served in our schools, NHS, prisons and police. The armed forces will be excluded from these reforms.

“Keeping pay awards down and ending automatic progression pay means that, for every pound we have to save in central administration, we can better limit job losses.”

He went on to admit that there will inevitably be further job losses, telling the Commons that: “I don’t want to disguise that there will be further reductions in the number of people working in the public sector.

“The OBR has forecast that the total number of people working for the Government will fall by a further 144,000 by 2015-16. And I know that for those affected this is difficult.” Last night Beth Farhat, the new regional secretary of the Northern TUC, said: “Instead of taking corrective action, the Chancellor is choosing to inflict more pain on nurses, teachers and other public sector workers through jobs cuts and pay squeezes.

“Those that lose their job will now have to wait even longer before they can sign on. This is a boost for payday loan lenders but will mean more misery for the people having their jobs destroyed.”

Unison also said the continued “onslaught”' on public sector pay will lead to critical shortages in areas like nursing, education and social services, amid warnings of industrial action.

The growing pay gap between the top and bottom, as well as cuts to vital services for children, the elderly and vulnerable, was leading to mounting pressure for industrial action, said the union.

For every pound saved in central administration, we can better limit job losses.

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