Gordon Brown hopes pay rises will improve nursing recruitment
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Chancellor Gordon Brown has unveiled public sector pay settlements, with average increases of 2.25%.
Pay awards for judges, senior civil servants, MPs and NHS consultants would be "staged" with an initial award of just 1% from 1 April, he said.
Mr Brown said this increase would send out a "powerful signal" of the fight against inflation.
But senior doctors have said they have been singled out for a "vindictive" pay rise by the government.
The initial pay increase of 1% for consultants will rise to 2.2% in November.
Dr Paul Miller, chairman of the British Medical Association's consultants' committee said: "I cannot believe the government has been so mean-minded.
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The average salary for a nurse is going up today from £27,000 to over £28,400 and that is to recruit more nurses into the NHS
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"This low pay rise will do very little to relieve NHS debt but will damage doctors' goodwill enormously."
Health Secretary Patricia Hewitt said she knew many would be disappointed by the award but financial stability in the NHS was important.
"We are determined to ensure that we return the NHS as a whole to financial balance over the next 12 months," she said.
Judges' pay rises will increase by 3.43% in November, with MPs and senior civil servants seeing theirs rise by 2% and 1.75% respectively.
Nurses are to receive 2.5% immediately and "progression awards" will lead to average rises of 5.2%, Mr Brown said.
Prison officers in England and Wales will receive a 1.6% rise, while junior doctors are set for a 2.2% increase.
Pay rises for armed forces and teachers have already been announced.
In 2004, Sir Peter Gershon put forward proposals to improve government efficiency, with money being re-invested into frontline services such as health and education.
Hospital closures
During Commons question time, the chancellor revealed that 33,000 civil service jobs had gone under the Gershon savings "to release resources for front line services".
Mr Brown said the changes had been made "to move resources from back office, by technological change, to the front line caring services, particularly in the NHS".
"The average salary for a nurse is going up today from £27,000 to over £28,400 and that is to recruit more nurses into the NHS," he added.
But Nadine Dorries, a Conservative MP, asked if the Gershon review was to "blame for hospitals closing, wards closing and thousands of nurses losing their jobs".