Shadow chancellor George Osborne has revealed the Tories intend to bring an end to the “age of excess” in the public sector in a bid to reduce public debt.
The warning comes after the Institute of Fiscal Studies estimated that government could have to find an additional £39bn a year in spending cuts and tax rises by 2015-16 to bring public debt under control.
Osborne said he would look to ensure pay settlements reflect the “prevailing conditions in the economy” and would revise three-year public sector pay deals, which he described as “very inflexible at a time when the economic conditions are changing very quickly”.
Speaking to the BBC, he said: “I haven’t ruled out further tax rises, although I will work hard to avoid them because I think where the bulk of the strain needs to be borne is on spending restraint.”
Osborne added that any quango boss earning more than the prime minister would have to justify their salary to the Treasury.
“It sends a very powerful signal throughout the public sector that the age of excess is over and we need an age of restraint and responsibility,” he said.
Meanwhile, a report by the Taxpayers Alliance has revealed the number of council chief executives earning more than £100,000 rose by 27% last year – with at least 16 people earning more than Gordon Brown.
The group published its ‘Townhall rich list’ compiled following Freedom of Information requests to 469 local authorities.
The top earner was found to be Wakefield council’s former chief executive John Foster, whose £205,000 salary was part of a £545,000 remuneration package. He left his post in March 2008.