'Public-sector pay rises must be funded by productivity': Minister gives wages warning in rare appearance at TUC meeting, as survey shows wider earnings gap. Barrie Clement reports

STEPHEN DORRELL yesterday became the first government minister since the 1970s to address a TUC conference, and warned leaders of 5 million public-sector workers that there would be no pay rises without increases in productivity.

However, Mr Dorrell, Financial Secretary to the Treasury, said that a freeze on the public sector pay bill would not rule out wage increases for those who earned them.

The Treasury minister's 20- minute speech was heard in silence and received polite applause. His strictures on public sector pay came 24 hours after his boss, Kenneth Clarke, Chancellor of the Exchequer, condemned excessively high pay awards in boardrooms.

Writing in Today newspaper, Mr Clarke said he disapproved of some of the high salaries paid to directors. He conceded that taxes for the highly paid had been reduced, but said that this should be borne in mind when salaries were set.

John Major and John Smith clashed in the Commons yesterday over top salaries. The Prime Minister reiterated his opposition to excessive salary increases, but said it was a matter for companies to decide.

Mr Dorrell, the first Tory minister to address a TUC meeting since Margaret Thatcher when she was Secretary of State for Education, told 300 representatives at TUC Congress House: 'Any increase in pay will have to be funded, not by increased resources, but by better efficiency within the organisation.'

He said: 'It seems self-evident to me that if the level of a service remains constant there should be no more cash provided to pay for it.' Traditional public sector pay structures had not placed sufficient emphasis on performance. 'The result has been that rewards have been linked to longevity of service rather than quality of output.' Mr Dorrell said the Government's focus was on value rather than cost, and 'customers rather than producers'.

Earlier, the minister sat impassively as John Monks, TUC general secretary, told him that unions were opposed to public services bearing the main burden of the pounds 50bn public-sector deficit.

Mr Monks, whose invitation to Mr Dorrell emphasises his determination to establish links with all political parties, said public servants were angry about last year's government-imposed 1.5 per cent limit on pay. They were also furious about cuts in services and the prospect of job losses.

During a brief question-and- answer session, John Sheldon, general secretary of the National Union of Civil and Public Servants, told the minister that morale among public service workers was at an all- time low. Alan Jinkinson, general secretary of Britain's biggest union, Unison, said: 'The combination of job losses, pay restraint and persistent cuts in services makes for an explosive cocktail.'

Mr Dorrell said later there had been 'clear points of difference' with the unions. Mr Monks said: 'He was hard and uncompromising on pay, and that did not go down well because we are feeling uncompromising as well.'

Jack Dromey, national secretary of the Transport and General Workers' Union, said: 'I would give Mr Dorrell 6 points for courage, 5.7 for artistic impression and nil points for content.'

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drink
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas