By Lucy Phillips
10 December 2009
Unions have reacted furiously to the planned caps on public sector pay and pensions outlined in yesterday’s Pre-Budget Report.
Chancellor Alistair Darling imposed a 1% cap on pay rises for two years for 3.9 million public sector staff, along with a limit on pension contributions from state employers.
The wage cap, to be implemented from 2011, is expected to amount to a pay cut because inflation is set to start rising from next year. Many public sector workers will also be hit by the 0.5% rise in National Insurance contributions from 2011, also announced in yesterday’s PBR.
The government is aiming to bring public sector pensions in line with the private sector by 2012 to save about £1bn a year.
But public sector unions condemned the measures, prompting fears of strike action. Union leaders called for those responsible for the financial crisis to take a bigger hit, despite the introduction of a 50% tax on City bonuses over £25,000.
Dave Prentis, general secretary of Unison, said: ‘I am not going to sign up to this. I know how our members feel – they feel angry and betrayed. It is just not on to make nurses, social workers, dinner ladies, cleaners and hospital porters pay the price for the folly of the bankers.’
Mark Serwotka, general secretary of the Public and Commercial Services union, added: ‘The hundreds of thousands of low-paid civil and public servants who are keeping this country running and getting people back into work will view the prospect of further cuts in real terms as scant reward for their hard work.’
Teachers’ unions welcomed the protection given to ‘frontline’ schools spending, equating to a real terms increase of 0.7% for the next three years, but warned that capping all public sector pay was ‘too blunt a measure’. Chris Keates, general secretary of National Association of Schoolmasters/Union of Women Teachers, the largest teacher’s union, said: ‘The issue over a 1% cash limit on public sector pay is a battle which will now be fought within the independent [salary] review body.’
The general secretary of the Association of Teachers and Lecturers, Mary Bousted, added: ‘It seems perverse to allow bankers to be untaxed on bonuses of up to £25,000 when everyone else is fully taxed on their £25,000 salary including first-year teachers.’
Darling also announced that all salaries over £150,000 for new government employees would require ‘explicit approval’ from the Treasury in a further attempt to cut the public sector wage bill.
In October, shadow Chancellor George Osborne pledged to impose a one-year pay freeze on public sector workers earning more than £18,000 from 2011.
10 December 2009
Unions have reacted furiously to the planned caps on public sector pay and pensions outlined in yesterday’s Pre-Budget Report.
Chancellor Alistair Darling imposed a 1% cap on pay rises for two years for 3.9 million public sector staff, along with a limit on pension contributions from state employers.
The wage cap, to be implemented from 2011, is expected to amount to a pay cut because inflation is set to start rising from next year. Many public sector workers will also be hit by the 0.5% rise in National Insurance contributions from 2011, also announced in yesterday’s PBR.
The government is aiming to bring public sector pensions in line with the private sector by 2012 to save about £1bn a year.
But public sector unions condemned the measures, prompting fears of strike action. Union leaders called for those responsible for the financial crisis to take a bigger hit, despite the introduction of a 50% tax on City bonuses over £25,000.
Dave Prentis, general secretary of Unison, said: ‘I am not going to sign up to this. I know how our members feel – they feel angry and betrayed. It is just not on to make nurses, social workers, dinner ladies, cleaners and hospital porters pay the price for the folly of the bankers.’
Mark Serwotka, general secretary of the Public and Commercial Services union, added: ‘The hundreds of thousands of low-paid civil and public servants who are keeping this country running and getting people back into work will view the prospect of further cuts in real terms as scant reward for their hard work.’
Teachers’ unions welcomed the protection given to ‘frontline’ schools spending, equating to a real terms increase of 0.7% for the next three years, but warned that capping all public sector pay was ‘too blunt a measure’. Chris Keates, general secretary of National Association of Schoolmasters/Union of Women Teachers, the largest teacher’s union, said: ‘The issue over a 1% cash limit on public sector pay is a battle which will now be fought within the independent [salary] review body.’
The general secretary of the Association of Teachers and Lecturers, Mary Bousted, added: ‘It seems perverse to allow bankers to be untaxed on bonuses of up to £25,000 when everyone else is fully taxed on their £25,000 salary including first-year teachers.’
Darling also announced that all salaries over £150,000 for new government employees would require ‘explicit approval’ from the Treasury in a further attempt to cut the public sector wage bill.
In October, shadow Chancellor George Osborne pledged to impose a one-year pay freeze on public sector workers earning more than £18,000 from 2011.
