20% cuts and a pay freeze

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‘Raiding public service pay and pensions is a fundamentally flawed strategy,’ said the NASUWT teachers union yesterday.

It was responding to calls for pay freezes and Chancellor Darling’s indication that this is coming within weeks.

NASUWT General Secretary Chris Keates condemned ‘the long list of those who use the recession as an excuse to promulgate an anti-public services agenda, to privatise public services, and to attack public service workers’ jobs, pay and pensions on the grounds that there should be “equity of misery”.

‘Public services are vital to the nation’s economy.

‘At a time of recession it is public services which will sustain people and rebuild the economy, none more so than the state education service.’

Chancellor Darling yesterday indicated the government is preparing to cut public sector pay.

Reponding to calls for public spending cuts and a public sector pay freeze, Darling said Labour will be making a decision over the next few weeks.

He said: ‘Public sector pay obviously has got to reflect prevailing conditions and, in particular, inflation has come way down.

‘We also have to be fair with regard to people who work in the private sector, many of whom have seen their pay and conditions tighten.

‘We will decide on our pay policy over the next few weeks.’

Earlier, Audit Commission chief, former Camden Council leader Steve Bundred said in an Observer interview: ‘At a time when inflation is likely to be between two per cent and three per cent, a pain-free way of cutting public spending would be to freeze public sector pay or at least impose severe pay restraint.

‘This is especially true if real wages in the private sector are still falling.’

He added: ‘Don’t believe the shroud-wavers who tell you grannies will die and children will starve if spending is cut. They won’t.

‘Cuts are inevitable and perfectly manageable.’

He warned that ‘whichever party wins the next election, we can expect a reduction of £5bn or more in real terms from public sector pay.

‘This would be a significant chunk of the £50bn or more that may be needed to be found through spending cuts and tax increases.’

Elsewhere, the former chief policy adviser to prime minister Blair, David Halpern called for even more savage cuts in public spending of more than £130 billion to solve the growing budget crisis.

He said that the UK needed to follow the example of Canada in the 1990s, which slashed expenditure by 20 per cent.

Halpern added that ‘efficiency gains’ being proposed by both Labour and the Tories ‘just don’t deliver what is needed’.

In order to get the UK’s £175bn budget deficit under control, he said some basic services may need to be axed altogether.

Halpern, who worked in Downing Street for six years until 2007, is now director of research at the Institute for Government, which provides training for potential ministers and civil servants.

Former work and pensions secretary Hutton, who jumped ship on the eve of the recent cabinet reshuffle, also joined the baying for cuts.

He said: ‘I don’t think you can go on saying we can continue to spend as if nothing has happened in the last year or so. People know something big time has changed.’

He added: ‘People are much more grown up than we often assume; they understand there’s a change coming; they want to be clear about what the priorities are, how they deal with that.’