Chancellor George Osborne has announced public sector pay rises are to be capped at 1% for two years, in his update on the state of the economy.
Among money-saving measures outlined by the chancellor were a 1% cap on public sector pay for two years, once the current two-year pay freeze ends from 2013 -
saying the government “cannot afford the 2% rise assumed by some government departments thereafter”. That would save more than £1bn by 2014-15, he said.
With inflation at over 5 percent and pensions contributions to rise by over 3 percent this amounts to a further pay cut on public servants.
