Pay rises for public sector 'may mean staff cuts'

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THE CABINET today is expected to approve pay rises of about 3 per cent for 1.3 million public sector workers, but with a warning that it may have to be paid for by cuts in staffing, writes Colin Brown.

Ministers will be forced to find the increases from 'efficiency savings' and some ministers were warning that it could lead to the numbers of staff, such as nurses, being limited in future years.

Cabinet ministers warned last night that the pay rises would not be 'rubber stamped'. The options include phasing in the increases for some groups. Senior Cabinet ministers favour giving a full award to the 500,000 nurses, but tougher limits on pay for 2,000 people such as generals, judges and civil service heads.

The Treasury has insisted that it will not dip into its contingency reserves. To limit the potential controversy over the pay rises, the Prime Minister accelerated consideration of the annual pay review body reports for nurses, 120,000 doctors and dentists, the armed forces and teachers.

David Clark, the Labour spokesman on defence, last night attacked the Government for unfair pay treatment of officers and men in the army. Figures show all officers above lieutenant have had real terms increases under the Tories since 1978 but ranks below staff sergeant have had cuts.