Advertisement

'Osborne Plans To Scrap National Pay Rate'

Chancellor George Osborne is expected to reveal plans to scrap national pay rates for public sector workers in next Wednesday's Budget.

It comes after Treasury research found they earn on average eight percent more than their private sector counterparts in England and Wales.

Local factors, such as the cost of living and commercial pay rates, are now set to be taken into account.

The move would see a teacher in Sunderland earning less than a colleague in Surrey, where bills are generally higher.

Regional pay rates for up to 140,000 civil servants could be brought in as early as next month, it has been reported.

Unions have lined up to condemn the plans, with the Public and Commercial Services union among them saying it would oppose them.

And Len McCluskey, Unite general secretary, said: "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."

Wales' First Minister Carwyn Jones said: "At the end of the day, people work hard. Nurses work hard, police officers work hard, teachers work hard.

"Why should they be penalised because of where they live? 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."

Mr Osborne is also said to be considering scrapping the 50p top rate of tax - a move that is likely to prove equally contentious.

It another move, North Sea oil firms are to be offered guarantees of long-term tax breaks for decommissioning old rigs in a bid to encourage billions of pounds of investment.

Some of the more controversial aspects of the Budget were discussed in a conference call by the so-called "Quad" of senior Conservative and Liberal Democrat figures on Friday.

David Cameron, Mr Osborne, Nick Clegg and Treasury Chief Secretary Danny Alexander are due to meet in person on Monday to put the finishing touches to the measures.

By far the biggest wrangle is over the proposed tax cut for top earners - people on £150,000-plus salaries.

While it would be hugely popular with Tory MPs, the Lib Dems want extra taxes on the rich and help for the lowest paid in return.

The proposed tax cut has been condemned by Labour leader Ed Miliband as the "wrong priority". He says youth unemployment should be the prime focus of the Budget.

Meanwhile, the TUC has warned moving civil servants onto regional pay will be counter-productive.

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 as people have less to spend."

He added: "This budget is shaping up to be a giveaway for the super-rich and a takeaway from Britain's hardest-hit regions."

Public and Commercial Services union general secretary Mark Serwotka said: "Local economies - already suffering from Tory-led, politically motivated butchery - are crying out for investment, not more cuts.

"It appears that next week's budget is shaping up to include the exact opposite of what our communities need to help them get back on their feet."

Mr McCluskey added: "George Osborne's Budget will reveal him as a grotesque reversal of Robin Hood, rewarding the super-wealthy by allowing them to skip over their tax responsibilities while mugging the low waged."