Public sector pay rises could be phased in

DONALD MACINTYRE and

PATRICIA WYNN DAVIES

The Government is examining the possibility of phasing above-inflation increases for the 1.4m public sector workers covered by the Pay Review board reports that are to be discussed by the Cabinet tomorrow.

Ministers - who met yesterday to discuss how to implement rises of up to 4 per cent - are considering whether it would be possible to phase in the bulk of rises rather than pay them all at once.

One factor is a repeat of last year's debate within the Cabinet over whether the above inflation element of the teachers' pay rise - expected to be around 3.75 per cent - should be centrally funded or met out of existing local authority education budgets.

The reckoning by most local education authorities was that they would have to fund rises of around 3 per cent and some will protest that, unless the extra is centrally funded, teachers may have to be made redundant by some councils.

Another advantage of phasing could be that doctors and nurses would potentially have the same initial rise. At present nurses are expected to secure an initial 2 per cent nationally, with extra having to be negotiated locally. Doctors by contrast are to have been awarded single pay rises of around 4 per cent.

Substantial pay rises for MPs and ministers could be set in train by the summer recess in the wake of John Major's decision to ask the Senior Salaries Review Body to conduct a wide-ranging inquiry into salaries and allowances.

The fast-track review will heighten expectations among some MPs that they could be taken into a new pay league - the review body covers only Civil Service grades above Grade 5, worth about pounds 10,000 a year more than the Grade 6 to which members' salaries were previously linked.

The announcement was made yesterday in a written parliamentary answer by Tony Newton, Leader of the Commons, in advance of tomorrow's disclosure of next year's pay awards for more than 1.3 million public sector workers. They are expected to receive no more than 4 per cent.

The body, which recommends pay levels for judges, senior civil servants and military top brass, will examine members' salaries of pounds 34,085 a year and pounds 42,754 office costs allowances.

Severance pay, pensions and allowances for motor car mileage and maintaining homes in London will also come under scrutiny.

The move comes barely a week after more than 300 MPs signed a Commons motion urging the Nolan Committee on Standards in Public Life to investigate their pay.

The review body has been asked to devise a linkage for annual uprating without the need for a parliamentary decision.