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Public sector pay freeze will be difficult, study claims

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The new government will find it difficult to impose a pay freeze in the public sector because of rising inflation and a thaw in wage restraint in private firms, according to a new report.

A study by the Labour Research Department said pay freezes in the private sector had started falling, while average settlements were rising, suggesting an end of “concessionary bargaining” by unions.

Fewer than one in five recent deals in private firms involved a pay freeze, with a quarter worth at least 3%.

In contrast, 1.6 million local government workers were facing a pay freeze and the main political parties were planning further wage restrictions, said the report.

“While we may not have seen the back of pay freezes just yet, there is likely to be greater pressure on all employers to settle for a positive increase as pay medians begin to rise,” said LRD’s pay and conditions researcher Lewis Emery.

“Public sector unions are already very unhappy about plans to hold down wages. With the rise in inflation, and pressure from comparisons with the private sector, it may be hard for whichever party is in government after the election to keep the lid on public sector pay.”

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Readers' comments (1)

  • The new Government of whatever colour will attempt to make public sector workers pay for the Bankers' bail out.

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