Public sector squeezed again over pay rises

Pay review bodies for five million public sector workers will be told today by the Chancellor that the Government is enforcing a pay squeeze for the fourth year in succession.

Kenneth Clarke's letter to the pay review bodies covering nurses, doctors, teachers and civil servants is certain to cause an outcry in the wake of the MPs' decision to give themselves a pay rise of 26 per cent.

The nurses will table a demand next week for a "substantial" pay increase, without setting a figure, to enable them to catch up with comparable groups, including teachers.

The main public sector union, Unison, representing 1.5 million workers, rejected the Chancellor's pay freeze strategy. "Yet again the Government expects low-paid public staff to bear the brunt of the cuts to pay for tax cuts in a last attempt to bribe the electorate in November," said a spokeswoman.

The Chancellor will tell the review bodies that pay rises must be paid for with productivity, but he will give a clear signal that he expects the public sector to squeezed more tightly than before, with running costs facing a cut of 12 per cent over the next three years.

Last year public sector pay rises averaged 2-3 per cent, and this year they were held to 3 per cent, but with inflation down to 2.1 per cent Mr Clark wants to hold the public sector down below 3 per cent next year.

The Chancellor shortly will chair the EDX committee of the Cabinet to settle the public spending levels for next year. William Waldegrave, the Chief Secretary to the Treasury, is finalising bids with ministers, to cut spending to make room for tax cuts in the Budget.

An interview with the Chancellor on the BBC Today programme was attacked by Brian Mawhinney, Tory Party chairman, yesterday.

Dr Mawhinney protested to John Birt, Director-General of the BBC, for alleged bias over an interview with the Chancellor by Anna Ford in the BBC Today programme.

Dr Mawhinney accused Ms Ford of having "repeatedly interrupted the Chancellor", but he said James Naughtie, another presenter had treated Tony Blair, the Labour leader, "with kid gloves" in an interview a few minutes later. At the end of her interview, Ms Ford commented: "So you are not going to elevate the debate - thank you Mr Clarke."