Cabinet in pay revolt

REBEL Cabinet ministers have taken on the Chancellor, Gordon Brown, in a bid to claw back a pounds 16,000-a-year pay rise that they agreed to forgo last year.

The clash comes at a sensitive time politically, following the Government's announcement to 1.3 million public sector workers that they will be getting pay rises of 2 per cent now, going up to 2.7 per cent in December.

The issue of Cabinet pay will return to haunt the Government later this year, when plans for ministers' 1999 settlement are discussed. Members of the Cabinet point out that, under the present arrangements, the gap between what they and their ministers are paid has fallen to around pounds 5,000.

Last year, John Prescott, the Deputy Prime Minister, brokered a deal with his Cabinet colleagues under which they agreed to give up a rise of pounds 16,000 per annum for two years. That increase was recommended by the senior salaries review body in 1996 to make up for the erosion of government salaries relative to those in the private sector.

Mr Brown has ruled that Cabinet ministers should forgo this cash for the entire parliament. Mr Prescott has, however, made it clear that his deal was intended to run for two years, by which time ministers would have given up pounds 32,000 per annum, and Mr Blair pounds 42,000 a year. Formal negotiations on the 1999 settlement have yet to take place.

However, ministers known to be unhappy with the decision to give up the money last year include David Blunkett, Secretary of State for Education and Employment, Robin Cook, the Foreign Secretary, and Jack Straw, the Home Secretary.

One option being floated is a phasing of the pounds 16,000 payment, another being an agreement whereby those with families could claim more of the cash. That was dismissed by one source yesterday as ludicrous. "You can't have means-testing of the Cabinet," he said.

Mr Brown is against making any concession to ministers, arguing that it would be impossible to defend against a background of pay restraint in the public sector.