Chancellor George Osborne to 'scrap public sector national pay rates'

Chancellor George Osborne is expected to reveal plans to scrap public sector national pay rates in the Budget.

He is thought to have backed the plan after Treasury research found people in public sector roles earn, on average, 8% more than their private sector counterparts across England and Wales.

Local factors, such as the cost of living and private sector pay rates, are now set to be taken into account.

The Public and Commercial Services union said it opposed the plans.

The move, expected to be announced in the Budget on Wednesday, would mean a teacher working in Sunderland would have a different pay packet to a colleague in Surrey.

Local pay rates for teaching and hospital staff could begin next year.

A Treasury source told the BBC's Chris Mason the move is not about saving money but about ensuring the UK has "a responsive, modern labour force".

The source told our correspondent the move is seen as "pro-growth" because it would help make the private sector to become more competitive.

A PCS spokesman told the BBC it is "opposed" to the plans because such a move "will drive down pay in the regions".

He added that the public sector could find it harder to "recruit and retain staff".

Other trade unions have previously raised concerns about the difficulty of attracting public sector staff to work in relatively poorer areas where they may have to take a pay cut to take the role.

Mr Osborne initially set out the idea in the Autumn Statement.

At the time, he announced a review of national pay rates for public servants and asked the independent pay review bodies to report back in July.

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