A study by think tank Policy Exchange said the gap between public and private sector pay was still rising, many workers in companies seeing “drastic cuts” in their standard of living.
The report said the public sector “premium” – the additional pay a typical public sector worker received over a private sector worker – was now up to 35 per cent, calculated on hourly pay.
The study claimed that 2009 was the first year in which average pay for public sector workers was on average higher than for all private sector workers.
The pay gap continued to increase up to December 2010 in spite of pay freezes, the report said.
In Scotland, the North-East, the North-West and Wales, a typical public worker can expect to be paid a fifth more than the typical private sector worker, said the report, adding that the only group where private sector pay was higher than the public sector was for the top 10 per cent of earners.
Policy Exchange director Neil O’Brien said: “Public sector pay has got hugely out of control. There is pressure on budgets like never before because of the deficit. If the unions want to preserve their members’ jobs they have to realise that pay is an issue which will have to be looked at.
“This is an issue of fairness. It is unreasonable and unfair to expect private sector workers to make all the sacrifices. We need a much better-balanced system of public pay.”
TUC general secretary Brendan Barber commented: “This is just another attempt by a right-wing thinktank to stir up divisions between workers in the private and public sectors. The truth is that both are having a terrible time.”