Speaking in his pre-Budget speech today Alistair Darling revealed that public sector workers earning more than £100,000 a year are to pay more into their
Any appointment for positions paying more that £150,000 a year will need approval of the Treasury.
All public sector pay increases are to be capped at 1 per cent from 2011 for two years.
Darling said: “Public pensions need to be broadly in line with those offered in the private sector.
“So by 2012 contributions by the state to public service pensions for teachers, local government, NHS and the civil service will be capped – saving around £1bn a year.
“Public sector workers will make a greater contribution to the increasing value of pensions, with those earning over £100,000 paying more.”
On public sector pay Darling said: “Public sector pay makes up around half of departmental spending.
“The senior civil service will take the lead with a cut in its pay bill of up to £100m over three years.
“And any new Government appointment over £150,000 and all bonuses over £50,000 will require explicit approval by the Treasury.”
Darling added: “I can announce that, for the two years from 2011, we will seek to ensure that all public sector pay settlements be capped at 1 per cent.”
But Darling said the special circumstances of the armed forces would be recognised in these measures.
He added: “Mr Speaker, £12bn from greater efficiency, £5bn from scaling back or cutting lower priorities, and £4.5bn from reducing the cost of public sector pay and pensions.
“These are tough choices, but they are essential if we are to stick to our plan to halve the deficit and protect the frontline.”