UK public sector pay won't keep up with inflation: transport minister

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By David Milliken

LONDON (Reuters) -British public-sector pay will not be able to keep up with soaring inflation, transport minister Mark Harper said on Sunday, as the country faces a wave of industrial disputes.

Industrial action is becoming more widespread across Britain's transport network and last week Britain's Royal College of Nursing trade union announced dates for its members' first strike in more than 100 years.

British consumer price inflation hit a 41-year high of 11.1% in October, but the latest official wage data, for July-September, showed public sector pay rose by an annual 2.4%, while average private sector wages increased by 6.8%.

"I think inflation-matching and inflation-busting pay rises are unaffordable," Harper said.

"We want to try and give all the workers in the public sector who work very hard decent pay rises. But they can't be inflation-busting pay rises. There isn't the money to pay for those. We haven't seen those in the private sector either," Harper told Sky News.

Finance minister Jeremy Hunt said state pensions and most benefits would rise in line with inflation in a budget statement on Nov. 17, but announced a longer-term plan for 55 billion pounds ($67 billion) a year of spending cuts and tax rises.

These plans leave little scope for government ministers to approve major pay rises.

Frances O'Grady, general secretary of the Trades Union Congress, told the BBC that the Conservative government could raise public-sector pay in line with inflation if it increased capital gains tax on the sale of shares and second homes to match income tax rates.

"This is about political choices," she said.

Lisa Nandy, a senior Labour Party lawmaker, told Sky News it would be premature for her party to commit to raising public-sector pay in line with inflation when it is next in office, and blamed current problems on Conservative economic mismanagement.

Harper said a meeting last week with the heads of Britain's National Union of Rail, Maritime and Transport Workers (RMT) and Transport Salaried Staffs' Association (TSSA) had been productive.

"We had very sensible discussions, very constructive (discussions)," Harper said.

Transport unions have said Britain's government - which heavily subsidises rail operators - has effectively blocked rail companies from reaching a pay deal with workers.

Harper said he wanted changes to employment practices in the rail sector - where Sunday working is optional - before agreeing more public funding.

($1 = 0.8269 pounds)

(Reporting by David Milliken; Editing by Elaine Hardcastle and Frank Jack Daniel)


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