Conservative Diary

« Conservatives eye £13bn saving by raising retirement age to 66 | Main | Guardian welcomes Osborne's speech but Right is more cautious »

One year public sector pay freeze is central pledge of George Osborne's deficit speech

The big theme of George Osborne's speech was that "we are all in this together". Illustrations of this pain for higher earners included retention of the 50p tax band for high earners, an end to certain benefits for those earning over £50K and a 5% cut in ministers' pay. Those earning less than £18K in the public sector will not be subject to a one year pay freeze. The pension age will go up one year earlier than first planned. The size of Whitehall will be cut by one-third.

Overall verdict: JUST ABOUT ENOUGH FOR NOW. This will reduce the deficit a little more quickly than Labour but not dramatically so. The missing ingredient is a growth agenda. At some point we'll need a list of policies that will move Britain away from the precipice (done today) and back to a fast growth economy.

Highlights, not verbatim:

12.27: We will pay for the relinkage of the basic state pension to earnings. We will however need to raise the retirement age earlier than expected. Already blogged here.

12.24: Child Trust Funds will continue to be paid to the poorest families but not to wealthier families. We cannot justify paying means-tested child credits to people earning over £50,000.

12.22: It would be "grossly unfair" to repeal the 50p tax rate on the high paid at the same time as poorer workers are making sacrifices.  For the fourth time he repeats the mantra: "We are all in this together."

Picture 5112.18: We respect the people who work in the public services. At a time of crisis we have a difficult choice between protecting jobs and pay. Noone should pick on public employees and I will not ask them to make sacrifices that others in the private sector are not making. All public employees earning less than £18,000pa will be exempted - as will our troops in Afghanistan (who will get a doubling of their allowance) - but all others will face a one year pay freeze. This freeze will save 100,000 jobs.

12.14: Any suggestion that the modern Conservative Party will damage the public services is a shameful lie. We have become the party of the NHS and will increase funding year by year. But productivity is too low and we will reform the public services.

12.13: I can't write 2010 budget now but I can tell you what kind of fiscally responsible government will be. We will start at Westminster with a 10% reduction in the number of MPs and a 5% cut in ministers' pay. The next Conservative government will cut the cost of Whitehall by one-third. A £3bn saving in bureaucracy alone because "we are all in this together".

12.11: The Chancellor's decision to sneak out a policy of a public sector pay freeze during the Tory conference rather than having the guts to tell Labour delegates shows that Labour politicians are better at writing books about courage than displaying it.

12.09: We've made the right judgments in opposing unfunded tax cuts, saying the 'cupboard was bare' and opposing the VAT cut. David Cameron and I will always put sound money first.

12.06: The Iron Chancellor in Gordon Brown has become the Plastic Prime Minister. Making more spending promises when he is borrowing £175bn.

12.05: The world is watching Britain and questioning our resolve to pay off our debts. If we do not have resolve interest rates will rise and the economic recovery will stop.

Picture 4812.04: The government borrowed too much. The banks borrowed too much. We all borrowed too much.  More of our taxes go to servicing our debt than educating our children or defending or nation. We are sinking in a sea of debt.

12.01: Labour created the budget mess but Conservatives will act "decisively" to put it right.

11.57am: A naughty Andrew Neil is calling George Osborne "Boy George".


You must be logged in using Intense Debate, Wordpress, Twitter or Facebook to comment.