Tories may scrap public sector deal

A Conservative government might scrap three-year pay deals for public sector workers in order to tackle "the age of excess", the shadow Chancellor George Osborne said yesterday.

The move was attacked by ministers and trade unions, who warned that nurses, midwives, hospital cleaners, teachers and police could be deprived of wage rises they had been promised by the current Government.

Mr Osborne said that public sector pay needed to reflect "prevailing economic conditions". He added: "I think we need to look at these three-year pay deals that the Government came up with because they may be very inflexible at a time when the economic conditions are changing very quickly."

Admitting that he would face "difficult decisions" on public sector pay, Mr Osborne told BBC Radio 4 that a message needed to go out that "the age of excess is over and we need an age of restraint and responsibility". He "had not ruled out" tax increases but would "work hard to avoid them", instead reducing the costs of government. If the Tories won an election in May 2010, the three-year pay deals would already be in their final year and the party might decide not to unravel them. While not opposed to three-year deals in principle, a Tory government could include a "flexibility clause" allowing it to revisit them if the state of the economy changed.

Karen Jennings, head of health at Unison, said: "Nurses, paramedics, occupational therapists, midwives, hospital cleaners and cooks – the whole family of health workers will be outraged at George Osborne's suggestion that they have enjoyed an 'age of excess'. Health workers do not need to be told by the Tories that 'we need an age of restraint and responsibility'. It goes with the job."

She added: "Health workers accepted a three-year pay deal in good faith. Even today this year's increase of 2.54 per cent falls below the Consumer Price Index of 3.2 per cent. We are all paying more for everyday essentials such as food, fuel, gas and electricity."

Chris Keates, general secretary of the NASUWT teachers' union, said Mr Osborne had shown a lack of integrity and economic credibility. She added: "Three-year pay deals were designed to bring predictability and stability to planning at school, local authority and government level. This is particularly important in the volatile economic circumstances to which he refers. It is disturbing that the Shadow Chancellor does not appear to recognise this."

Ed Balls, the Schools Secretary, said: "We have a tough but fair three-year pay deal for teachers. For the Government to renege and break that agreement now – as the Tories have said they would today – would betray the thousands of professionals who are teaching our children and delivering rising standards in classrooms around the country."

Unions criticised town hall leaders for offering council staff a 0.5 per cent pay rise this year. But councils said they had to make "tough decisions" over wages and spending.

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