Gordon Brown: restoring his prudent reputation

The chancellor has defended plans for basic public sector wages to rise slightly above inflation.

It was announced on Friday that teachers are set to receive a pay increase just 0.2 per cent above the underlying rate of inflation.

But members of the armed forces should get a basic 3.2 per cent pay rise according to new recommendations delivered to the government.

With inflation currently at 2.7 per cent, the independent pay review board for teachers recommended awards of 2.9 per cent - a move that has angered unions.

School staff in London and the south east will do slightly better with inner London getting 6.9 per cent, but ministers have come under fire for a failure to tackle the "crisis" in the recruitment and retention of teachers.

Delivering a speech in Wolverhampton, Gordon Brown defended the pay clampdown as vital for the long term stability of the economy.

And he insisted that pay rises would also have to be linked to reform of working practices.

The government would "continue to have the strength to maintain and lock in our tough and disciplined approach to inflation and take the right long term decisions for Britain" he said.

"And that is why just as we must have discipline on pay in the private sector it is right that there be continued and long term discipline in the decisions we make, as today, on public sector pay.

"And as we look forward to the conclusion of other pay negotiations, let us remind ourselves that every pay settlement must be linked to productivity so that investment in our public services is matched by reform," Brown added.

The National Union of Teachers, which had already called for a 10 per cent increase, slammed the news that they will get less than a third of their claim.

"A 2.9 per cent increase will do nothing to recruit and retain the number of teachers needed to ensure high quality education for our children throughout the country," said NUT general secretary Doug McAvoy.

Eamonn O'Kane of rival union NASUWT added that "advances which are quite necessary in London should not be at the expense of the national pay structure".

But education secretary Charles Clarke defended the deal, saying that the priority lay in preserving cash for the forthcoming reform of teachers' workload which all unions bar the NUT have signed up to.

"We made clear in the autumn that it was vital for schools to have enough room in their budgets to get on with the school workforce remodelling in 2003/04...which teachers consistently rate higher than pay as a priority to be tackled," he said.

Soldiers appear set to receive a more generous award, with a basic 3.2 per cent for all personnel and a 3.7 rise awarded to those in the lowest pay ranges.

MPs, along with senior civil servants, will receive a real terms decrease in their salaries, with their review body recommending just 2.25 per cent rises.

The FDA union which represents Whitehall officials the recommendation as "inadequate".

"Many members will see no real pay increase as a result of this award and some a pay cut," said general secretary Jonathan Baume.

"The government expects senior civil servants to lead and deliver major reform not only in the civil service but also in the wider public sector, and these awards provide little financial incentive."

Shadow chancellor Michael Howard said that "pay levels should reflect what is needed to recruit, retain and motivate the skilled people on whom we rely to provide public services to the standards the British people expect".