Rises averaging 3.5 to 4 per cent for Britain's 1.25 million public sector workers will be announced on Monday, including civil servants, GPs, teachers, judges and the armed forces.
The Chancellor, Gordon Brown, said the rises were "affordable and right" but he insisted the Treasury's spending allocations to the Whitehall departments would not be changed to pay for the rises, which exceed the Treasury's 2.5 per cent inflation target.
The Chancellor is expected to give a further boost to all low- paid workers in the Budget, on 9 March, by establishing a 10p lower rate of income tax for hundreds of thousands on low incomes who are paying 20p in the pound. It could be funded by abolishing the pounds 2bn mortgage interest tax relief.
The Cabinet yesterday agreed to give the biggest pay rises to trainee nurses to try to tackle the nurse shortages in hospitals across Britain, which have contributed to the plight of patients being left on trolleys for more than 24 hours.
Rises of 11 per cent for nurse trainees and 4.7 per cent for most nurses are to be paid in full from 1 April. Family doctors are expected to get about 3.5 per cent and some GPs will qualify for an additional 4 per cent held over from last year.
Mr Dobson will delay the announcement until Monday to gain the maximum impact for the launch of a pounds 4m advertising campaign to recruit nurses to the NHS, which has been forced to hire them from the Philippines.
But Mr Dobson came under fire last night when it emerged he will use some of the pounds 1bn allocated in the comprehensive spending review for modernisation in the health service to fund the nurses' pay rises.
Simon Hughes, the Liberal Democrat health spokesman, said: "It's bad because the money was allocated for modernising the NHS, which is desperately needed. There are buildings falling down, as well as general practices that need to be upgraded. The pay rises should have been funded from the surpluses in the Treasury, not from the modernisation fund."
Government sources said the use of the modernisation fund would allow the pay rises for the NHS to be paid in full.
MPs will also get inflation-busting pay rises linked to the average rises for civil servants, but pay review reports for junior ministers in the Lords are being delayed. No decision has yet been reached on pay rises for cabinet ministers, but some members believe they will lose out for the third year in a row.
John Monks, the TUC general secretary, warned it would be a mistake to hold back the pay for other public sector workers to fund those covered by the pay review bodies.
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