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| Version 0 | Version 1 |
|---|---|
| Public sector pay reform 'absolute disaster for Wales' | Public sector pay reform 'absolute disaster for Wales' |
| (about 3 hours later) | |
| The chancellor has been urged not to introduce regional pay in the public sector as he prepares to deliver his Budget. | The chancellor has been urged not to introduce regional pay in the public sector as he prepares to deliver his Budget. |
| A union representing public sector staff said it would be an "absolute disaster", depriving the Welsh economy of more than £1bn. | A union representing public sector staff said it would be an "absolute disaster", depriving the Welsh economy of more than £1bn. |
| George Osborne will also announce a cut in the top rate of income tax. | |
| Welsh Conservative MP Guto Bebb said the cut would be a "difficult policy to sell". | |
| The UK government is examining how public sector pay can be brought into line with the private sector. | The UK government is examining how public sector pay can be brought into line with the private sector. |
| But critics say it would mean a pay cut for people in poorer parts of the UK. | But critics say it would mean a pay cut for people in poorer parts of the UK. |
| Last autumn, Mr Osborne asked independent pay review bodies to report in the summer on whether the public sector could be "made more responsive to local labour markets". | |
| But the Public and Commercial Services Union (PCS), which has members working for the UK and devolved governments, said the proposal would hit Wales particularly hard. | But the Public and Commercial Services Union (PCS), which has members working for the UK and devolved governments, said the proposal would hit Wales particularly hard. |
| According to the Institute for Fiscal Studies, Wales has the biggest public-private pay gap in the UK. | According to the Institute for Fiscal Studies, Wales has the biggest public-private pay gap in the UK. |
| Women in Wales can earn an extra 18.5% and men an extra 18% in the public sector than they could expect to make working for private companies, the think tank has said. | Women in Wales can earn an extra 18.5% and men an extra 18% in the public sector than they could expect to make working for private companies, the think tank has said. |
| PCS senior national officer Jeff Evans said: "What these figures demonstrate is that regional pay would also be an absolute disaster for the Welsh economy." | PCS senior national officer Jeff Evans said: "What these figures demonstrate is that regional pay would also be an absolute disaster for the Welsh economy." |
| 'Real impact' | 'Real impact' |
| The gap could be only be closed by holding down public employees' pay while wages in the private sector rise in line with inflation, he added. | The gap could be only be closed by holding down public employees' pay while wages in the private sector rise in line with inflation, he added. |
| "The real impact on the Welsh economy would be even greater, however, since the reduced spending power of public sector workers would translate into reduced revenues and wages in private sector businesses that currently benefit from that spending," he added. | "The real impact on the Welsh economy would be even greater, however, since the reduced spending power of public sector workers would translate into reduced revenues and wages in private sector businesses that currently benefit from that spending," he added. |
| First Minister Carwyn Jones has described the proposal as "ludicrous" and as "code for cutting pay in Wales". | First Minister Carwyn Jones has described the proposal as "ludicrous" and as "code for cutting pay in Wales". |
| New Plaid Cymru leader Leanne Wood on Tuesday night invited him and other Welsh party leaders to unite in opposition to the proposal. | New Plaid Cymru leader Leanne Wood on Tuesday night invited him and other Welsh party leaders to unite in opposition to the proposal. |
| Treasury officials say it would ensure the UK has a responsive, modern labour force. | Treasury officials say it would ensure the UK has a responsive, modern labour force. |
| Growth | |
| They see the move as "pro-growth", saying it would help make the private sector become more competitive. | They see the move as "pro-growth", saying it would help make the private sector become more competitive. |
| Mr Osborne is also expected to raise the threshold at which anyone pays income tax to more than £9,000 next year, leaving the average standard rate taxpayer £305 a year better off. | |
| He will announce a cut in the top rate of tax from 50p to 45p, but not for a year. | |
| Payable on income over £150,000, the 50p rate was introduced in April 2010 in what Labour said at the time was a temporary move. | |
| Mr Bebb, Tory MP for Aberconwy, said cutting it would be a "difficult policy to sell, especially when the chancellor says we're all in together. | |
| "The 50 pence tax rate was part and parcel of that measure," he told BBC Radio Wales. | |
| "It will depend on how he rebalances this out and what other measures will be brought in to try and counter balance any loss of income." | |
| Mr Bebb said it was right to release a "timetable for its abolition" if the rate was not raising money for the Treasury. | |
| He added that the chancellor "had to make decisions which arise for the financial viability of the country". |