The government is considering adopting a system where pay of people like teachers and nurses is linked to the cost of living, and private sector pay, in the area where they live.

Matthew Hancock, Conservative MP and former chief of staff to George Osborne, believes that this shows "a new angle on the argument".

Speaking to the Today programe he said that there needs to be a move "towards professionals in the public sector running the organisations that they're in charge of, overseeing the pay of the people who they employ" such as headteachers setting pay in their schools for example.

Dr Evan Harris, vice chair of the Liberal Democrat Federal Policy Committee, said that he believes politically it would be extremly difficult for the conservatives to implement such changes.

"You're going to see, inevitably, attempts to cut more than you see attemps to increase pay," he said.

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