Teachers face long-term pay rises of just 2 per cent a year after Tony Blair and Gordon Brown warned that the performance of public-sector workers had to improve before investment increases.
The Chancellor, addressing a Cabinet Office conference in London this week, said that public spending would be tight, insisting that pay rises in the next three years may be limited to 2 per cent, compared with 5 per cent in the early years of the Labour government.
The Prime Minister gave a bleak warning: "There is a basic deal here.
Investment for results."
Tory leader David Cameron accused the Government of "knee-jerk attacks on public-sector workers", and rejected the "automatic and lazy assumption that the private sector will always do things better than the public services".
Ministers announced in December that teachers' pay would increase by 2.5 per cent in 2006 and 2007, but Mr Brown seemed to indicate this week that it was unlikely there would be a similar increase in future years.
He said the next public-spending review would be based on 2 per cent rises for public-sector workers for a three-year period.
The National Union of Teachers attacked his stance and praised the Conservatives. Steve Sinnott, NUT general secretary, said: "David Cameron's recognition of the positive nature of the public- sector ethos is a welcome step forward and it is a recognition that Number 10 needs to reflect on.
"All Chancellors make statements about keeping public-service pay settlements down. The reality is that there is an incontrovertible link between public-service pay falling behind pay in the private sector, low morale, high staff turnover and recruitment and retention. The Government needs to remember that."