Chancellor Alastair Darling has called for the toughest public sector pay freeze in 30 years.
Darling announced that the government is seeking a one-year pay freeze next year for the most senior civil servants, senior NHS managers, GPs, chief executives of quangos and members of the judiciary. It is thought the freeze will cover 40,000 civil servants.
The Treasury has also recommended that a further 710,000 mid-level civil servants not covered by departmental three-year deals, including doctors, dentists and prison officers, receive a rise of between 0% and 1%.
Independent pay review bodies will receive the recommendation in the next few weeks.
Nurses and teachers in multi-year deals that do not end until 2011 will be excluded from the freeze, with their pay awards honoured. Military personnel are also excluded from the freeze.
First Division Association (FDA), the trade union which represents top public sector staff, said it was disappointed.
FDA general secretary Jonathan Baume said: “It will be these senior civil servants who will be charged over the next two years with taking forward the government’s very difficult programme of austerity across the public services and this is a very poor signal indeed to them.”
Treasury minister Liam Byrne said that “tough but realistic decisions on pay” were necessary to reduce state borrowing, according to Reuters.