People employed in the public sector could see their pay frozen for the next two years, as the new government tries to make spending cuts in order to plug the economic black hole.
Business leaders the Confederation of British Industry (CBI) said keeping wages at their current level could save £18bn over the next two years.
It cited the example of private sector businesses, many of which froze pay during the recession, leading to a 0.9% cut in wage payments. However, public sector pay went up by 2.8% during the recession.
The CBI did make allowances for those working on the frontline of the public sector, saying that not all wages would need to be frozen. But they suggested that the total amount spent on pay should remain at its current level.
In addition, the CBI said firms should be helped to attract business and create new jobs, which in turn would promote economic growth.
Other suggestions made by the organisation include giving service contracts to the private and third sector, potentially saving £8bn, and opening up the public sector to more competition.
Richard Lambert, director general of the CBI, said: "We have a new government with a determination to get a grip on the public finances and the political will to do it. We need to see a detailed plan for achieving this in the Budget."
Copyright © Press Association 2010
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"I think government is making suffer people who are working and this is not fair – what about inflation going high every day? That means the working class has to always suffer and that is the reason I heard so many unemployed people saying 'why should I work?' I alway asked them, 'why not?' They say, 'if I work I can't save money but if I don't work I better off with my lifestyle.' That's the impression government giving. Disgusting!! They never track correct problem and alway making suffer to working class people and this is not fair at all. All politicans should cut them wages" – Name and address withheld