Limit public sector pay rises to 2%, Brown urges

Limit public sector pay rises to 2%, Brown urges

	Published : Fri, 25 Nov 2005 07:05 By : Phil Bateman Print this Story

LONDON: Chancellor Gordon Brown yesterday urged pay review bodies to limit pay increases for public sector workers to 2 percent next year. He asked the review bodies to consider the impact of high energy prices and emphasised that pay settlements should be within this limit and “not contribute to inflationary pressure in the economy”.

His suggestions to the pay review bodies are expected to anger about two million workers from the public sector, such as teachers, doctors, nurses, armed forces personnel and council officers. Public sector union Unison was quick to react and vowed to fight any attempt to impose wage restraint.

His message provoked an angry response from Unison, the public sector union which vowed to fight any attempt to impose wage restraints. The union said Mr Brown was trying to claw back the more generous raises given in recent years, especially to workers in the health and education sectors.

Earnings in these two sectors have risen by about 6 percent outstripping the public sector where wages grew by 4.7 percent since 2001. Last year, pay review bodies had recommended a 3 percent average increase.

A Unison spokesperson said Mr Brown’s attempt is unjustified and overlooked that the pay rises in the health sector were intended to boost retention and recruitment of staff. He warned of “problems ahead” if there is any move to reverse the policy.

Soaring oil prices had resulted in the slowest economic growth, a situation that called for wage restraint in both the public as well as the private sector, according to Mr Brown.

He pressed dominant services companies to exercise wage restraint in order to prevent a corresponding spurt in prices. He warned that high energy prices could prompt workers and unions to demand higher wages which could fuel inflation.

In a speech later today, Mr Brown will address the Institute of Directors calling for their cooperation in keeping inflationary pressures down.