PUBLIC SECTOR PAY
New Conservative government would freeze public sector pay for those on more than £18,000
Shadow Chancellor George Osborne has announced that a Conservative government would impose a 12-month pay freeze for the 4 million public sector workers earning more than £18,000.
In his speech to the 2009 party conference in Manchester on 6 October, Osborne outlined a series of spending cuts that would be ushered in by a Conservatives victory in the general election:
A one-year freeze on public sector pay for 2011 that would exempt the frontline military and lower-paid public servants. One million public servants earning less than £18,000 a year would still be entitled to a pay rise.
A £50,000 cap on the maximum pension payments for senior civil servants. Osborne said: “The tax relief on private sector pensions is capped, so the time has come to find ways to impose a £50,000 annual cap too on the size of public sector pension payouts.”
A curb on “excessive salaries at the top” in the public sector. Osborne said: “In the current climate, anyone who wishes to pay a public servant more than the Prime Minister will have to put it before the Chancellor. I am not expecting a long queue.”
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Bankers' bonuses
The shadow chancellor also threatened a clampdown - using the “tax system” - on bank bonuses .
He said: “I have a tough message to the bankers too. The support from the taxpayer when you needed it most was there to prop up your banks not your bank accounts. Don’t forget that. I hope the new international rules work. It is the best solution. But if we find the money that should be going into stronger bank balance sheets is being unreasonably diverted into bigger pay and bonuses - we reserve the right to take further action and that includes using the tax system. I have given you a fair warning. For I believe in the free market not a free ride.”
Osborne’s aides pointed to the windfall tax introduced on banks by Sir Geoffrey Howe, a former Tory chancellor, as evidence of a willingness to act on perceived excesses in the financial services sector, The Financial Times reported.
Want to know more?
Read the full text of George Osborne’s speech on the Conservative party web site at:
www.conservatives.com/News/Speeches/2009/10/George_Osborne_We_will_lead_the_economy_out_of_crisis.aspx
Press reports:
“Osborne targets £7bn cuts”, The Financial Times, 6 October 2009: click here
“George Osborne pledges public sector pay freeze above £18,000”, The Times, 6 October 2009: click here
“Osborne pledges public sector pay freeze for those on more than £18,000”, The Guardian, 6 October 2009: click here
“Tory conference: George Osborne plans biggest public spending cuts for 30 years”, The Daily Telegraph, 6 October 2009: click here