Regional pay deal proposal revealed

George OsborneCivil servants could be moved to regional pay deals from as early as next month under Budget proposals that risk inflaming trade union anger.

As political wrangling continued over the final details of the package to be unveiled by Chancellor George Osborne, more details emerged of some expected changes.
North Sea oil firms are to be offered guarantees of long-term tax breaks for decommissioning old rigs in a bid to encourage billions of pounds of investment.

And controversial moves to recalculate public sector pay rates to better reflect local variations in the private sector are expected to be accelerated.

Some of the more highly contentious aspects of Wednesday's Budget were discussed in a conference call by the so-called "Quad" of senior Conservative and Liberal Democrat figures at lunchtime. David Cameron, Mr Osborne, Nick Clegg and Treasury Chief Secretary Danny Alexander are due to gather in person on Monday to put the finishing touches to the measures.

It is understood that the Budget "scorecard" has been presented to the Office for Budget Responsibility so it can calculate the economic impact of the changes. But although that met the deadline set for the independent body to start crunching the numbers, Downing Street indicated that the negotiations would continue into next week.

Those wrangles are mainly over tax cuts for top earners amid reports the Chancellor will set out moves to scrap the top 50p income tax rate on £150,000-plus salaries. While that would be hugely popular with Tory MPs as a stimulus to growth and a victory within the coalition, the Lib Dems want extra taxes on the rich and help for the lowest paid in return.

The Independent reported that Mr Clegg, whose party was previously opposed to lowering the rate, had struck a deal that a drop to 45p would be countered by a "tycoon tax" on the super wealthy. His proposal, unveiled at the party's conference last weekend, would set a minimum floor on the percentage of overall income paid by the wealthiest.

But Labour leader Ed Miliband denounced an income tax cut "targeted at the richest people in Britain" as the "wrong priority" - saying youth unemployment should be the prime focus.

And TUC general secretary Brendan Barber said: "Moving to regional pay will not just reduce the pay of millions of public servants, but hit regional economies outside London and the South East as people have less to spend. This budget is shaping up to be a giveaway for the super-rich and a takeaway from Britain's hardest hit regions."

© 2012 Press Association
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