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| Public sector pay reform planned | Public sector pay reform planned |
| (20 minutes later) | |
| Public sector workers could have their salaries set for three years rather than 12 months under plans being put forward by Chancellor Alistair Darling. | Public sector workers could have their salaries set for three years rather than 12 months under plans being put forward by Chancellor Alistair Darling. |
| He says the move will help departments plan budgets, employees to plan ahead, as well as control inflation. | He says the move will help departments plan budgets, employees to plan ahead, as well as control inflation. |
| Ministers face mounting pressure over a decision to limit public sector pay rises to 2%, with unions warning of a "collision" with workers. | Ministers face mounting pressure over a decision to limit public sector pay rises to 2%, with unions warning of a "collision" with workers. |
| The TUC said any three-year deals would depend on the terms offered. | The TUC said any three-year deals would depend on the terms offered. |
| Public sector pay rises are recommended by an independent body and this year suggested 2.5% increases. | Public sector pay rises are recommended by an independent body and this year suggested 2.5% increases. |
| But the government decided to award that rise in two stages - so it equates to a 1.9% rise - saying it would tackle higher inflation and keep interest rates and mortgage rates low. | But the government decided to award that rise in two stages - so it equates to a 1.9% rise - saying it would tackle higher inflation and keep interest rates and mortgage rates low. |
| 'Guaranteed earnings' | 'Guaranteed earnings' |
| The budgets of Whitehall departments are set for three-year periods and ministers now want to see public sector pay awards for nurses, the police and other public servants to be fixed in the same way. | The budgets of Whitehall departments are set for three-year periods and ministers now want to see public sector pay awards for nurses, the police and other public servants to be fixed in the same way. |
| Mr Darling argues that the new longer-term agreement will guarantee earnings growth for 5.5 million workers as well as help ward off inflation. | Mr Darling argues that the new longer-term agreement will guarantee earnings growth for 5.5 million workers as well as help ward off inflation. |
| If we were to agree to a three-year pay deal that would really need to be a very decent, fair award Karen JenningsUnison href="/1/hi/business/6988901.stm">Q&A: Public sector pay class="" href="/1/hi/uk_politics/7175554.stm">Analysis: MPs' pay dispute | |
| It will also allow departments to plan more effectively, as public sector pay accounts for about a quarter of all public spending. | It will also allow departments to plan more effectively, as public sector pay accounts for about a quarter of all public spending. |
| "What there is is certainty as to what the pay increase will be, not just this year, but next year and the year after," the chancellor told BBC Radio 4's Today programme. | "What there is is certainty as to what the pay increase will be, not just this year, but next year and the year after," the chancellor told BBC Radio 4's Today programme. |
| "And I think that is absolutely a huge step forward for public sector employees. | "And I think that is absolutely a huge step forward for public sector employees. |
| "It also helps in relation to the wider economy and it helps departments, which of course get their spending allocated over three year periods, so everybody knows where they are. | "It also helps in relation to the wider economy and it helps departments, which of course get their spending allocated over three year periods, so everybody knows where they are. |
| "What we are looking at here is to get a degree of certainty so that both sides - employer and employee - know where they stand." | "What we are looking at here is to get a degree of certainty so that both sides - employer and employee - know where they stand." |
| 'Collision course' | 'Collision course' |
| The government is already under pressure to solve the ongoing row over public sector pay. | The government is already under pressure to solve the ongoing row over public sector pay. |
| The TUC has criticised its centralised pay target of 2%, arguing that ministers are "on a collision course with six million public servants" because the deal represents a significant cut in living standards. | The TUC has criticised its centralised pay target of 2%, arguing that ministers are "on a collision course with six million public servants" because the deal represents a significant cut in living standards. |
| There is growing anger among police officers over their pay award | There is growing anger among police officers over their pay award |
| General Secretary of the TUC, Brendan Barber, said long term pay deals could be agreed but only on certain terms. | General Secretary of the TUC, Brendan Barber, said long term pay deals could be agreed but only on certain terms. |
| "I don't think we're against longer term deals in principle, but it's what are the terms on offer. | "I don't think we're against longer term deals in principle, but it's what are the terms on offer. |
| "The problem is last year we saw the government impose pay deals of only around 2%. Inflation was running at over 4%, so millions of public service workers saw themselves facing a real cut in their living standards. | "The problem is last year we saw the government impose pay deals of only around 2%. Inflation was running at over 4%, so millions of public service workers saw themselves facing a real cut in their living standards. |
| "Longer term deals can help create the space to address some of those longer term issues, but unions will only buy into this kind of idea, if they're very confident that people's living standards will be protected throughout the period of a deal." | "Longer term deals can help create the space to address some of those longer term issues, but unions will only buy into this kind of idea, if they're very confident that people's living standards will be protected throughout the period of a deal." |
| Karen Jennings, head of health at Unison, said its members were also concerned about the economy. | Karen Jennings, head of health at Unison, said its members were also concerned about the economy. |
| Strike action | Strike action |
| "If we were to agree to a three-year pay deal that would really need to be a very decent, fair award. | "If we were to agree to a three-year pay deal that would really need to be a very decent, fair award. |
| "Also it would have to remove the risks of an unstable economy from the health workers themselves. | "Also it would have to remove the risks of an unstable economy from the health workers themselves. |
| "What I mean by decent and fair is that the economy is unstable at the moment, our members are concerned about paying their mortgages, about rising fuel costs and so on. | "What I mean by decent and fair is that the economy is unstable at the moment, our members are concerned about paying their mortgages, about rising fuel costs and so on. |
| "There's quite a bit of uncertainty over a three-year period, when things can change rapidly over months in the economy." | "There's quite a bit of uncertainty over a three-year period, when things can change rapidly over months in the economy." |
| Police in England, Wales and Northern Ireland are currently in dispute with the government over the staging of the 2.5% pay rise - in Scotland it was paid in full. | Police in England, Wales and Northern Ireland are currently in dispute with the government over the staging of the 2.5% pay rise - in Scotland it was paid in full. |
| MPs' pay | MPs' pay |
| Thousands of prison staff in England and Wales also walked out in August last year over the government's decision to give them their pay rise in two stages, causing the government to seek to reintroduce powers to ban such industrial action. | Thousands of prison staff in England and Wales also walked out in August last year over the government's decision to give them their pay rise in two stages, causing the government to seek to reintroduce powers to ban such industrial action. |
| Civil servants have also staged industrial action, which could be repeated, while strikes have been threatened in the NHS and local government. | Civil servants have also staged industrial action, which could be repeated, while strikes have been threatened in the NHS and local government. |
| Meanwhile Prime Minister Gordon Brown has urged MPs to limit their own salary rises to keep them in line with those of public sector workers. | Meanwhile Prime Minister Gordon Brown has urged MPs to limit their own salary rises to keep them in line with those of public sector workers. |
| The decision on MPs' pay will be made by the House of Commons, but Mr Brown said increases must stay below 2%. | The decision on MPs' pay will be made by the House of Commons, but Mr Brown said increases must stay below 2%. |
| The government has argued public sector pay must be controlled to curb higher inflation caused by rising energy and food prices. | The government has argued public sector pay must be controlled to curb higher inflation caused by rising energy and food prices. |