Liz Truss U-turns on plan to cut pay for public sector workers outside London

Liz Truss has scrapped a highly controversial plan to pay public sector workers living in cheaper regions less than their counterparts in London and the South East, the day after it was announced.

The Conservative leadership candidate said last night she will end national pay deals for civil servants and other public sector workers, and link their salaries to living standards in areas where they work, in a move which could save the taxpayer around £8.8bn a year.

But Ms Truss, who is from Leeds, dropped the plan today after it sparked a backlash from several senior Tories and her commitment to levelling up was called into question.

A spokesman for her campaign said there had been a “wilful misrepresentation” of the proposal and “current levels of public sector pay will absolutely be maintained”.

Conservative leadership candidate Liz Truss

He added: “Anything to suggest otherwise is simply wrong.

“Our hard-working frontline staff are the bed rock of society and there will be no proposal taken forward on regional pay boards for civil servants or public sector workers.”

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However, Former Chief Whip Mark Harper told Ms Truss to stop “blaming journalists", adding: "Reporting what a press release says isn’t ‘wilful misrepresentation’”.

After the announcement on Monday night, Conservative Tees Valley mayor Ben Houchen, who is backing Rishi Sunak, said he had been left “actually speechless” by the proposal.

“There is simply no way you can do this without a massive pay cut for 5.5m people including nurses, police officers and our armed forces outside London,” he said.

North West Durham MP Richard Holden, another supporter of the former Chancellor, said Ms Truss’s policy would “kill levelling up”.

And Steve Double, the Conservative MP for St Austell and Newquay, said the “terrible idea” would be “hugely damaging to public services in Cornwall, where we already struggle to recruit NHS staff”.

“The billions saved would be coming straight out of rural economies. This is levelling down not up,” he said.

While the Sunak campaign argued that the plan would slash the pay of nearly 6m public sector workers, with nurses, police and armed forces members facing £1,500 of cuts.

Henri Murison, Chief Executive of the Northern Powerhouse Partnership, said the Government should be looking to retain “valued people to modernise and improve public services”, not offering them “a disincentive to work in deprived places where private sector wages are low due to low productivity”.

As part of the proposed civil service shake up, Ms Truss had also promised to reduce the annual leave and scrap jobs aimed at increasing inclusion and diversity in the public sector.

According to The Foregin Secretary, the proposals would deliver a “leaner, more efficient, more focused” civil service and save a total of £11bn a year.

She said around £2bn would be saved by bringing the average Civil Service leave entitlement down from 27 days to the 25 found in the manufacturing and private services sectors.

There were also plans to cut more than 300 Whitehall diversity officers, to save around £12m a year.