Tory leadership contender Liz Truss is facing a barrage of criticism over plans to cut the wages of public sector workers outside London, with a Conservative mayor describing it as a “ticking time bomb”.
It comes after the foreign secretary — the frontrunner in the race to succeed Boris Johnson in No 10 — revealed proposals for a “war on Whitehall waste” with savings worth £11 billion.
But Ms Truss’s team was forced to admit that she would have to replace national pay settlements with regional awards for all public sector workers for the bulk of savings over a period of many years.
In a scathing assessment, Ben Houchen, the Conservative mayor for Tees Valley and supporter of her rival, Rishi Sunak, said he was “actually speechless” a the plans.
“There is simply no way you can do this without a massive pay cut for 5.5m people including nurses, police officers and armed forces outside London,” he claimed.
“Liz Truss’s campaign is explicit that their savings target is only possible ‘if the system were to be adopted by all public sector workers. This is a ticking time bomb set by team Truss that will explode ahead of the next general election.”
Richard Holden, a member of the 2019 intake of Tory MPs and another Sunak backer, said Ms Truss must immediately scrap the plans that he claimed would “kill” the government’s levelling up agenda.
Steve Double – a Tory MP and Sunak supporter – added: “This is a terrible idea and would be hugely damaging to public services in Cornwall. This is levelling down not up.”
Ms Truss initially promised to save up to £8.8bn annually by “adjusting” civil servants’ salaries to match living costs in the areas where they work.
But aides were forced to amend the claim after experts at the Institute for Government pointed out that the foreign secretary’s target was almost as much as the total annual civil service pay bill of around £9bn.
They clarified that regional pay would initially be introduced only for new starters in the civil service, delivering a tiny fraction of the claimed sums. If successful, it would be rolled out over a number of years to cover all public sector workers, with the £8.8bn target reached only in the long term.
Mr Sunak’s team warned on Tuesday the proposals could result in millions of public sector workers seeing their pay cut by an average of £1,500 a year if the proposed £8.8 billion of savings is made.
The move provoked also fury among unions, with the general secretary of Prospect, Mike Clancy, saying the potential prime minister “plans more of the same economically illiterate and insulting ideological nonsense this government has been churning out in recent years”.
Dave Penman, general secretary of the FDA union, which represents senior civil servants, said: “As the government faces the huge challenges posed by a new war on mainland Europe and recovering from Covid backlogs, what we need from a prime minister is solutions for the 21st century, not recycled failed policies and tired rhetoric from the 1980s.”
Labour also said the idea would sound the death-knell for the government’s levelling-up agenda by widening the regional income gap and create a “race to the bottom on public sector workers’ pay”.
Andy Burnham, the Labour mayor of Greater Manchester, added: “Pay cuts for nurses and public sector workers in the North? I don’t think. If this is a serious policy, we will fight it tooth and nail”.
Jacob Rees-Mogg, a support of Ms Truss, insisted on Sky News the discussion “at the moment” is centred on civil servants and it is “not the plan at the moment” to cut pay for the rest of the public sector.
But peaking on BBC Radio 4’s Today programme, Alex Thomas, the programme director at the Institute for Government, stressed the whole of the civil service pay bill “is only about £9 billion”.
“You’re not going to reduce the civil service pay bill to £200 million unless you pretty radically reshape the state.
“I know she wants to be radical but possibly not quite that much, so it’s going to come from the wider public sector, it’s going to come from nurses and teachers and local authorities.”
He argued the “complicated and controversial” move would mean nurses and teachers being paid less or receiving slower pay rises than others, adding: “This is not war on Whitehall, it’s more like war on Workington.”
