PUBLIC SECTOR workers are facing a two-year pay freeze, declared by chancellor George Osborne in the emergency Budget yesterday, igniting fury amongst the UK’s trade unions.
The pay freeze applies to all public sector workers earning over £21,000, while the 1.7m with wages below that threshold will receive a flat pay increase of £250 in both of the two years. Teachers will not be affected until next year because they are within a three-year pay deal.
The measure is expected to save £3.3bn by 2015, according to Osborne.
Osborne said yesterday that once the freeze is lifted in 2012, pay rises will be flat pay increases across all salary levels, rather than a percentage of salary, rewarding those in the lower bands.
Remuneration amongst executives in the public sector, according to Osborne, will be limited to no more than 20 times the lowest wage.
Chris Johnson, head of Human Capital said: “It is right to restrain, if not freeze, public sector pay increases. There is both an issue of affordability and an urgent case for pay reform.”
But the government’s freeze on pay has angered trade unions, which called the move a “declaration of war” against Britain’s public services.
Unison general secretary Dave Prentis said: “Public sector workers will be shocked and angry that they are the innocent victims of job cuts and pay freezes.
“Freezing public sector pay when inflation is running at 5.1 per cent and VAT is going up, will mean a real cut in living standards for millions of ordinary workers and their families - already struggling to pay rising bills.”
RMT general secretary Bob Crow said: “Instead of sharing the pain, it’s the poorest who take the hit while the greedy elite who drove our economy over a cliff fly off to the tax havens to bank the bail-out cash that could have been used to protect jobs, schools and hospitals.”
There are expectations that government departments will see up to 25 per cent cut from their budgets.
Osborne also confirmed yesterday that the government will aim to reduce the cost of public sector pensions, with a special independant committee to be chaired by former Labour minister John Hutton.