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Pay rises under threat

Teachers face losing out as Chancellor Brown demands below-inflation pegging. Jon Slater reports

Classroom teachers could lose pay rises of up to pound;300 if Gordon Brown, the Chancellor, wins his battle to peg the public-sector paybill to below inflation.

Mr Brown has made it clear that any increases should be held close to his inflation target of 2 per cent. But in a report, delivered to England's Department for Education and Skills four weeks ago, the School Teachers'

Review Body recommended an increase in teachers' salaries of around 2.7 per cent.

A real-terms pay cut will create an extra headache for Ruth Kelly, Education Secretary. She is under pressure from Labour backbenchers unhappy about the education white paper, and faces the growing threat of strike action over changes to senior staff pay.

The switch from management allowances to teaching and learning responsibility points (TLR) could lead to a pay cut of up to pound;10,500-a-year for some teachers. Others have gained.

The two-year teachers' pay award for 2006 and 2007 is expected to be announced by Ms Kelly, following Monday's pre-budget report. Pay and conditions for teachers in Wales is not devolved to the Welsh Assembly.

A 2 per cent increase would be a real-terms pay cut for teachers. Headline inflation is 2.5 per cent, although the Westminster Government's preferred measure - which excluded house prices and mortgage interest payments - is 2.3 per cent.

The difference between increases of 2 per cent and 2.7 per cent is Pounds 134-a-year for a newly-qualified teacher, pound;196 for a teacher at the top of the main pay spine and pound;272 per year for a teacher in inner London at the top of the upper pay spine. This rises to more than pound;300 per year for senior teachers who receive a management allowance.

Mr Brown's intervention could also decrease the likelihood of the bigger increase for school leaders demanded by heads.

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: "Two per cent would be completely unacceptable. It would cause a crisis in recruitment and put in jeopardy all the gains made as a result of the investment Labour has made in education."

A below-inflation pay increase would further penalise teachers, many of whom are already upset at the replacement of management allowances and the knock-on effect on their pensions.

A teacher on management allowance 1 who will retire after 2010 after 35 years in the profession will lose pound;717 from their annual pension if they do not qualify for the replacement TLR payment.

This rises to pound;4,625 for a teacher with management allowance 5.

Mr Brown has also risked provoking teachers' ire by suggesting the recent deal on pensions, which keeps the retirement age at 60 for all current teachers, should be reopened. An inquiry led by Adair Turner, former director general of the Confederation of British Industry, has proposed raising the retirement age to 69 by 2050.

In its report published this week, the inquiry proposed the age rise to finance a more generous basic state pension that would rise in line with earnings from 2010.

Workers should also be automatically enrolled into an occupational or new national pensions scheme.

But Alan Johnson, trade and industry secretary who negotiated the deal, told Radio 4's Today programme: "Every deal that I've reached in my life, as a trade unionist and as a politician, I have honoured."

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