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Unions rebut government case for public sector pay cuts

18 December 2007

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The Trades Union Congress (TUC) has told the government its centralised pay target of 2% for the next three years will do nothing to fight inflation and risks damaging relations across the public sector.

In a report, entitled Six million pay cuts, the TUC says the government’s pay target will widen the pay gap between men and women, hit staff retention, recruitment and morale, and threatens a return to the “bad old days of public sector pay boom and bust.”

The TUC says that the government’s arguments for a three-year uniform public sector pay increase of 2%, which it says is “well below the current retail price index of around 4%, do not add up.

The government claims that the pay freeze is necessary to fight inflation, but the TUC report cites research claiming public sector pay follows inflation rather than causes it.

TUC General Secretary Brendan Barber said: “The government is on a collision course with six million public servants. Forcing effective cuts in their pay for this year and the next three will hit morale and have an inevitable impact on the quality of public services.

“And yet the government’s arguments for this draconian policy simply do not stand up. Public sector pay does not cause inflation, and holding it back does nothing to fight inflation caused elsewhere. Its only economic impact is on the living standards of public servants.”