Tuesday, August 29, 2006

New Labour: tough on pay

‘Tough choices’ need to be made to safeguard Britain’s stability, chancellor Gordon Brown writes in the Financial Times today. Sadly, as with any set of choices, there will be losers:

‘This year, to fight inflationary pressures, we have ensured that public sector pay awards have averaged 2.5 per cent, the lowest for a decade. For the coming year, I have told every department to go further and found all pay settlements on achieving our 2 per cent inflation target.

‘Toughness on pay is just part of a public sector reform programme, to release resources for national priorities, that also includes an 80,000 reduction in the civil service, £30bn ($15.8bn) of asset sales by 2010 and more stretching efficiency targets.’

There will also be beneficiaries, too:

‘Our reforms have allowed us to cut corporation tax from 33p to 30p in the pound and long-term capital gains tax from 40p to 10p, changes that we could afford and sustain.’

Remind me again. Which party is in office these days?

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