6 June 2006, 16:04  Keeps public sector pay settlements near the Treasury's 2 pct inflation target.

Chancellor Gordon Brown has warned government departments to keep public sector pay settlements near the Treasury's 2 pct inflation target. In remarks to a public sector conference, he said he had written to all departments reminding them of their responsibilities "in the fight against inflation". Brown said next year's spending review would see public spending rise by 2 pct, after years of 5 pct increases "as we caught up and addressed the investment backlog". "With this year's public sector pay settlements averaging just 2.25 pct, we are maintaining vigilance in the fight against inflation, and next year and the year after that we will maintain this discipline of low overall settlements," he said. "I am making it clear in writing to departments that public sector pay settlements must in future be founded on meeting our 2 pct inflation target." Brown's remarks signal the start of another offensive against the public sector unions to keep pay rises to a minimum. The government revealed yesterday that the public sector accounted for 95 pct of working days lost to strikes in the first quarter of this year -- the first time the split between public and private sectors has been illustrated. The statistics showed that 616,000 equivalent work days were lost, compared with 158,000 days for the whole of last year. Public servants have become increasingly militant as the government seeks to rationalise the civil service and make tens of thousands redundant.

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