Autumn Statement 2012: Unions cheer as ministers see sense on regional pay

The government said it had accepted recommendations from pay review bodies not to press ahead with the controversial plans.

Chancellor George Osborne had asked the review bodies to consider the move amid suggestions that the private sector was suffering in parts of Britain thanks to high public-sector pay in low-wage areas.

Mr Osborne also confirmed that public servants whose pay has been frozen will receive a 1 per cent rise from next April.

Unison union head of health Christina McAnea said: "Introducing regional pay in the NHS would have been an expensive, bureaucratic nightmare.

"The NHS is already going through massive upheaval because of the government's Health and Social Care Bill and breaking up national pay bargaining would have caused even more conflict, which is bad for patients and staff.

"George Osborne's claims that national pay 'crowded out' investment in regional economies and 'hurt' the private sector never did stack up," said Ms McAnea.

"There is a positive case in the NHS for nationally determined pay which is fair, equitable and flexible enough to deal with recruitment and retention issues."

TUC general secretary Brendan Barber added: "It's good to see that the government has seen sense and in the face of huge opposition - from its own back-bench MPs, patients, public-sector workers, unions and academics - been forced to abandon any plans for localised pay for nurses, paramedics, prison officers and civil servants."