THE highest earners in the public sector are in line for a salary freeze next year after Alistair Darling moved to ensure they shared in the financial pain facing the rest of the country.
In a sign of Labour’s direction on public sector pay through the fiscal squeeze of the coming years, the Chancellor urged there should be no pay rise for about 750,000 of the best paid public sector employees.
They would include judges, senior NHS managers and GPs, among others. Public sector leaders expressed anger at the move, while business leaders called on the Government to go further.
The announcement came on the eve of shadow chancellor George Osborne’s speech to the Conservative Party conference in Manchester today, prompting questions about its timing.
Senior civil servants are entering the final year of a three-year pay deal in 2010, but Mr Darling wants the agreement torn up given the state of the public finances.
Three-year pay deals for non-senior civil servants will be respected, but those without agreements face rises in line with the private sector - ranging between 0% and 1%.
The Armed Forces will not be affected by the move, however, in an acknowledgement of the unique circumstances currently facing the military.
The announcement is the first indication of how Labour intends to deal with public sector pay in the coming years.
Chief Secretary to the Treasury Liam Byrne said: "Britain’s public services are invaluable, but if we are to halve the deficit over four years and protect frontline services we have to make tough but realistic decisions on pay.
"That means leadership from senior groups and realistic increases for other workforces."
The Tories questioned why the announcement had been made on the eve of Mr Osborne’s main conference speech.
"Tonight’s move by the Government, if true, comprehensively shows that the Conservative Party is setting the terms of the political debate on the economy," a spokesman said.
"It is surprising that the Labour Chancellor chose to make this announcement - which affects hundreds of thousands of people - in the middle of a Conservative Party conference.
"People will question his motives.
"Tomorrow George Osborne will set out an overall approach to deal with Labour’s debt crisis."
David Frost, director general of the British Chambers of Commerce, welcomed the pay freeze, but said it was "long overdue".
Mr Frost pressed the Government to go further, and announce a freeze on public sector recruitment.
He agreed that members of the armed forces should be a special case, given the sacrifices made in recent years.
A British Medical Association spokeswoman said: "This is very disappointing news. This is not the time to demoralise doctors.
"What we had asked in terms of pay increase for all doctors was 2%.
"A pay freeze won’t help with recruitment and retention.
"GPs are potentially being singled out.
"Given the responsibilities GPs have and the level of training needed we don’t feel that’s the way to proceed."
Jonathan Baume, general secretary of the First Division Association, which represents senior civil servants and public sector managers, told the Press Association: "We are extremely disappointed.
"We hope ministers aren’t playing politics with people’s pay.
"We recognise there is a crisis in public finance, it’s very difficult out there.
"Ministers are telling us the economy is slowly pulling out of recession.
"This suggests the public finances might be in a worse state than the Government has so far been letting on."
He said the average senior civil service salary of £75,000 a year was "relatively modest for what are very demanding jobs".
He said senior managers were going to have to advise and support the Government in delivering significant cuts in public expenditure and now was the time to provide motivation.
"The Government needs to be able to motivate people. People have to feel that if they stay in the civil service they will be fairly rewarded and treated properly.
"This is a pretty poor way to motivate and reward."