TEACHERS, nurses and council staff in the North East have been warned their pay is too high and may have to be frozen or limited for several years.

Unions, MPs and experts last night rounded on the Chancellor’s announcement that he has asked the pay review bodies to consider how public sector pay can be made “more responsive” to local labour markets.

It is feared the move will see public sector workers’ effectively cut in the North while wages of their counterparts in the South could rise.

The row came as George Osborne was forced to acknowledge a grim picture of declining growth and rising unemployment for the UK over the coming years in his Autumn Statement on the economy.

Mr Osborne said the move to regional pay scales for public sector workers would be a “significant” step towards creating a more balanced economy that did not “squeeze out” the private sector.

Last night the Royal College of Nursing threatened to end its 95-year history of not striking in response to Mr Osborne’s proposals and union bosses have hit out at what they claimed was the latest assault on their members.

Kevin Rowan, regional secretary of the Northern TUC, said: “The Tory-led Government’s review into regional pay adjustments represents a stealth attack on the North. Collectively this will drain even more wages from North East’s economy, make the region’s families poorer which will then mean less to spend with local shops and businesses.

“Why should a nurse or a teacher or social worker doing exactly the same job in Tyneside be paid less than someone doing the same job in David Cameron’s constituency in leafy Oxfordshire?”

Mr Rowan was backed by Michelle Williams, one of the Northern national executive members of the teachers’ union NASUWT.

She said: “We need to attract the best candidates from the whole country to the North East but we have to ask ourselves now how do bring in the best if the Government tells graduates and others that they must be paid less if they are prepared to come here?”