Tory leadership: Liz Truss pledges civil service pay shake-up

Liz Truss has said she wants to save taxpayers' money by scrapping diversity roles and ending national pay deals.

The Tory leadership candidate wants to link civil servants' pay to living standards where they work, meaning similar jobs could have different salaries depending on location

Ms Truss says that the scheme could be rolled out to other public sector areas, saving £8.8bn a year.

Labour called her plan "a fantasy recipe for levelling down".

The party's deputy leader Angela Rayner said it would reduce "the pay of Northerners, worsening the divide which already exists".

The FDA - the union for senior civil servants - said it was "astounding' Ms Truss was planning to move jobs out of London while at the same time cutting regional pay.

And a source close to the Rishi Sunak campaign said the plans would mean "stretching the NHS to breaking point and fewer police fighting crime as we head into a general election".

The Truss camp have argued that introducing regional pay would stop the public sector crowding out the private sector in places where private businesses can't compete with public sector pay.

Ms Truss has also been criticised for describing Scotland's First Minister Nicola Sturgeon as an "attention-seeker".

Scotland's deputy first minister John Swinney said he was "absolutely horrified" and described the comments as "obnoxious".

Ms Truss is competing with former Chancellor Rishi Sunak to become the next Conservative leader, and prime minister.

The party's 160,000 or so members are voting on which of the two they want to replace Boris Johnson, and the winner will be announced on 5 September.

There are bits of tinkering here and there in Ms Truss's plans, like saving £12m a year from cutting civil service diversity officers.

But the only way these plans will save "billions" is if they not only pay civil servants less in poorer areas - but other public sector workers too.

Ms Truss says she'll only do this if it "works" when they introduce it for civil servants.

Economically, the argument is that it's harder for private companies to hire people where public pay is higher and harder to compete with.

But politically - it's very hard to see how she sells this.

To save billions, she's arguing you'd need a situation where nurses, police, teachers - for example - would be paid less in Sunderland than ones in Surrey.

Lots of policy has been pumped out in this campaign with headlines like 'Whitehall waste' to appeal to members.

But dig in to the detail, and there are loads of questions about how some of these would work in practice.

At a question session on Monday evening Mr Sunak told party members he was the candidate for change.

He was introduced to the stage in Exeter by former International Trade Secretary Liam Fox who said Mr Sunak had the "character, courage, experience intellect and downright decency" to win over swing voters.

Ms Truss received her own campaign boost when she received the endorsement of trade minister Penny Mordaunt.

Ms Mordaunt - who was knocked out of the race after finishing third - described Ms Truss as the "hope candidate".