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Last Updated: Tuesday, 8 January 2008, 11:11 GMT
Q&A: Public sector pay

Gordon Brown at the TUC
Mr Brown has insisted he would stand firm on pay deals
The government and the trade unions seem to be on a collision course over plans to reform public sector pay.

Why is public sector pay an issue?

Trade unions representing workers in the public sector, including teachers, nurses, civil servants, and police officers, are angry about wages.

They say the government's 2% pay target is below inflation and it is wrong their members should take a pay cut when the government says its priority is improving the public services.

They are also angry some of the pay deals awarded by independent pay review bodies have been staged - with part of the increase delayed - to save more money.

Some unions are calling for joint action, which brings back echoes of the "winter of discontent" in 1978 and 1979, when widespread strikes helped bring down the previous Labour government.

Why is the government standing firm on public sector pay?

Gordon Brown has made it clear there will be no retreat on public sector pay, and said a tough pay settlement was crucial to maintaining the government's economic strategy of low inflation and steady growth.

The prime minister is worried if public sector workers get more money, it could trigger requests for pay increases among private sector employees as well.

In addition, the government is facing a big squeeze on public spending after years of big increases to pay for improved health and education.

To avoid breaking his fiscal rules and having a big budget deficit, while giving at least a bit more money to health and education - although less than before - Mr Brown has to keep the lid on public sector pay.

Under plans being put forward by Chancellor Alistair Darling, public sector workers could have their salaries set for three years rather than one as at present.

How have workers reacted?

The Royal College of Nursing voted "with great reluctance" to accept the government's offer after Unison and the GMB did the same.

Local government workers have rejected a 2.475% pay offer, with a higher rate for low-paid staff.

Jobcentre, benefit office and pensions workers took part in a 48-hour strike in December 2007 and further industrial action could follow.

Prison officers have walked out in August 2007 in a surprise strike over the staging of their 2.5% pay offer. Justice Minister Jack Straw has since announced he wants to outlaw strikes in jails.

Police in England, Wales and Northern Ireland are also in dispute with the government over the staging of the 2.5% pay rise - in Scotland it was paid in full.

What happens next?

The government is hoping that it can deal separately with the pay issues in different areas.

It has also been making some conciliatory noises to the unions, not on pay, but on slowing the pace of privatisation and the introduction of market forces in health and education.

Dave Prentis, boss of the biggest public sector union, Unison, told BBC News the "jury is still out" but he was encouraged by the tone of the new cabinet ministers who are dealing with these issues.

However, he warned if the workers were demoralised by pay cuts and restructuring, the government would not be able to deliver its promises to improve public services.

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