Pay Pressures: PM forgoes his own rise to assuage public sector

Tony Blair yesterday announced that he would forgo a increase of pounds 41,443 in his salary. Colin Brown, Political Correspondent, reports on the Prime Minister's attempts to defuse a growing row over the continuing squeeze on the pay of 1.3m public-sector workers.

The Government faced an angry backlash from nurses, doctors and teachers yesterday as the Prime Minister took the lead in urging public sector pay restraint by foregoing an increase in his own salary.

In a U-turn, Downing Street announced that the Prime Minister would limit his own rise to around the Government's inflation target of 2.5 per cent as a signal to the country to maintain the squeeze on pay.

Some Cabinet ministers were last night considering following Mr Blair's lead by not accepting their entitlement to a salary increase of pounds 16,000. If that happens, it is probable the rest of the Cabinet will fall into line. One minister said the position as it stood was "untenable".

The squeeze on pay was reinforced by Alistair Darling, the Chief Secretary to the Treasury, who wrote to the independent pay review bodies covering 1.3 million public-sector workers calling for "low" pay recommendations. His note said: "Pay costs will need to be contained within existing spending plans. There will be no access to the reserve to fund spending on pay in excess of those plans."

The Treasury's freeze means that any increases will have to be funded from efficiency savings, or by cuts in other services.

John Monks, general secretary of the Trades Union Congress, called for a meeting with Mr Darling and said: "It is clear there cannot be a permanent freeze in the public-sector pay bill without the quality of public services being affected."

The calls for pay restraint were brushed aside by the British Medical Association, which tabled a demand for an increase of 10 per cent for GPs as part of a five-year programme of increases to catch up with comparable groups, such as lawyers and accountants.

Nurses last week put in a demand for an inflation-busting pay rise. Rodney Bickerstaffe, general secretary of Unison, said his union had no problem with the Prime Minister or Cabinet ministers receiving increases recommended by an independent pay-review body. "We do expect, however, the same treatment for public-sector workers."

Nigel de Gruchy, general secretary of the National Association of Schoolmasters/ Union of Women Teachers, condemned the pay freeze facing public-service workers. "We can't go on like this year after year after year ... I'm warning them that at some stage ... there will finally be an outburst of anger and that is of course something that nobody wants," he said on BBC radio.

William Hague, the Conservative leader, accused the Government of "hypocrisy" after Mr Blair urged the Cabinet to take the extra pounds 16,000 raising their pay to pounds 103,860. Mr Hague will follow Mr Blair in taking an inflation- linked rise as Leader of the Opposition.