Private sector pay rises fall behind

PUBLIC SECTOR wage rises outstripped those in the private sector in May for the first time in six years, reflecting the Government's inflation- busting pay awards.

Pay for state employees, such as civil servants, NHS staff and teachers, rose 4.5 per cent in May compared with 4.3 per cent in April. Wage rises in the private sector fell to 4.2 per cent from 4.7 per cent.

It is the first time pay rises for public sector employees have outstripped the commercial sector since May 1993, when they grew by 4.7 per cent.

Official labour figures showed unemployment fell to a new, 19-year low last month, while the number of people in work hit another all-time record. State sector pay growth has more than doubled since May 1997 - the month New Labour won power - when it was running at just 2.2 per cent.

Andrew Smith, the employment minister, said he was confident the rise in public sector pay was a one-off. "The message on pay, whether in the public or private sector, is that continued moderation is essential for the economic stability we need for stable growth and job generation," he said.