Govt seeks three-year public sector pay deal

Tuesday, 8 January 2008 12:00 AM

Lengthening public sector pay deals to three years will provide stability greatly needed by the British economy, Gordon Brown has said.

The government is seeking to extend the salary settlements of employees like nurses, teachers and police in order to fight upward inflationary pressures.

In his monthly press conference this afternoon the prime minister said such a move would provide employees like nurses, teachers and police more stability than the existing 12-month pay settlements.

"It puts everything on a long-term footing. It means that as people face mortgage bills and utility prices they know exactly what their income is likely to be," he told journalists in his monthly press conference.

Mr Brown said he was "vigilant but positive" about the UK economy's "resilience" during a turbulent 2007, but insisted "difficult decisions" had to be made "in the knowledge that higher inflation would wipe out higher settlements".

Chancellor Alistair Darling echoed Mr Brown's comments, emphasising the important of maintaining control over inflation in the face of a "difficult" 2008.

"In the last ten years we have achieved an almost unparalleled period of stable economic growth with historically low inflation - I want to keep it that way," the chancellor said on this morning's Today programme.

"The fact that we've been able to get inflationary pressures out of the economy has given the Bank of England flexibility to reduce interest rates which is what it needs to do at the present time."

Union leaders have criticised the proposal, however, saying they suspect the government may renege on a three-year deal. Last year police officers expressed shock at the Home Office's decision to delay a 2.5 per cent pay rise by three months.

"Right across the public sector, including police, we've taken a very difficult and unpopular decision to stage public sector pay," Mr Darling admitted.

"If we hadn't done that the Bank of England might not have had the scope to reduce interest rates when it needed to do so at the end of last year."

The GMB union has already come out in opposition to Mr Darling's proposals. Its national secretary for public services, Brian Strutton, described the government's inflationary argument as "economically flawed and socially unacceptable".

"Different parts of the public sector have different needs from pay negotiations and whereas for some a period of stability makes sense for others there is a desperate need for change," he commented.

"The reality is that Brown and Darling want to have public sector pay settled for politically expediency because there will be a general election within the next three years."

Tags:
• employment
,
• public services