Teachers, nurses and other public sector workers could face lower pay outside of London and the southeast under "levelling down" plans by wannabe PM Liz Truss.
The Tory leadership contender unveiled a fresh war on unions and the public sector as she stepped up her bid for No10 last night, with plans to save £11 billion by slashing "Whitehall waste".
The bulk of the savings - some £8.8 billion - would come from paying workers living in poorer areas of the country less than counterparts in places like London and the South East, where the cost of living is higher.
The Truss campaign said it would initially apply to the civil service but could be expanded to public sector workers.
One expert said this would result in a "war on Workington" rather than Whitehall, as the entire civil service pay bill is £9 billion - meaning the estimated £8.8billion saving would include staff like nurses and teachers.
Tory Tees Valley Mayor Ben Houchen described it as a "ticking timebomb" - and claimed it could result in pay cuts for 5.5 million people
The proposal sparked alarm from MPs and union chiefs, who fired off a warning shot that she would "face opposition every step of the way".
Labour's Deputy Leader Angela Rayner said: "Liz Truss is declaring war on herself with this recipe for levelling down.
"A race to the bottom that would cut the pay of school and NHS workers outside London, widening the divide and punishing the North.
"This out-of-touch Tory Government’s commitment to levelling up is dead."
Mr Houchen trashed the plans and warned the backlash would "explode" ahead of the next election.
“There is simply no way you can do this without a massive pay cut for 5.5m people including nurses, police officers and our armed forces outside London," he said.
“Liz Truss’s campaign is explicit that their savings target is only possible ‘if the system were to be adopted for all public sector workers’.
“This is a ticking time bomb set by team Truss that will explode ahead of the next general election.”
Health Minister Maria Caulfield said it would be a "disaster".
She tweeted: "Regional pay for public sector workers such as nurses, doctors and police officers would be a disaster. If you are doing the same job you should be paid the same wage whether you are in London or Leeds."
Former Welsh Secretary Simon Hart attacked the plans - warning it would hammer Wales.
"Under these plans Wales is worst hit, with 430,000 workers including police officers & armed forces facing a near £3000 pay cut.
"This would be levelling down."
Mark Serwotka, general secretary of the PCS union, said: "If Liz Truss is elected, and if she tries to go ahead with these proposals, she'll face opposition every step of the way.
"Civil servants are not a political tool to be used and abused for one person's ambition; they are the hard-working people who keep the country running, day in day out, and they deserve respect."
Mike Clancy, general secretary of Prospect union, said: "Liz Truss has spent the last few weeks trashing the record of her own Government.
"Judging by this vacuous attempt to garner headlines friendly to her selectorate, she plans more of the same economically illiterate and insulting ideological nonsense that this Government has been churning out in recent years."
Institute for Government programme director Alex Thomas said the £8.8 billion proposed for savings from regional pay bargaining would not come from Whitehall.
"The whole Civil Service pay bill is only about £9 billion," he told BBC Radio 4's Today programme.
"You're not going to reduce the civil service pay bill to £200 million unless you pretty radically reshape the state.
"I know she wants to be radical but possibly not quite that much, so it's going to come from the wider public sector, it's going to come from nurses and teachers and local authorities."
He argued the "complicated and controversial" move would mean nurses and teachers being paid less or receiving slower pay rises than others, adding: "This is not war on Whitehall, it's more like war on Workington."
RCN General Secretary Pat Cullen said it was an "attack on NHS values".
"This is an attack on NHS values and a direct assault on its professionals," she said.
"Undermining trade unions and their members, diversity and employment rights are warped priorities when Ms Truss herself says hospitals are crumbling.
"Thinking that salaries for nurses and support workers deserve cutting further should sound the death knell for her political ambitions."
Ms Truss unveiled her plans for a "war on Whitehall waste", cutting civil service time off, ending national pay deals and scrapping jobs aimed at increasing inclusion and diversity in the public sector.
The Foreign Secretary claims her plans would save £11 billion and tackle left-wing "groupthink" within the Civil Service.
She said: "As Prime Minister I will run a leaner, more efficient, more focused Whitehall that prioritises the things that really matter to people and is laser-focused on frontline services.
"There is too much bureaucracy and stale groupthink in Whitehall. If I make it into Downing Street, I will put an end to that and run a government that focuses relentlessly on delivering for the British public, and offer value to hard-working taxpayers.
"I have shown in my time in Government that I'm prepared to take on the Whitehall orthodoxy and get things done.
"The British people can trust me to deliver on my promises and tackle the cost of living immediately."
Her campaign argued that civil service pay is negotiated at a national level so no account is taken of variations in the cost of living across the country.
New regional pay boards would mean civil servants' pay can be adjusted in line with the actual areas where they work, saving the taxpayer billions but also ensuring private employers are not "crowded out" by higher public sector wages.
The savings could be enhanced by moving more civil servants out of London.
Around £2 billion would be saved by bringing the average Civil Service leave entitlement down from 27 days to the 25 found in the manufacturing and private services sectors.
She also outlined plans to attack “facility time” from the public sector and axe diversity and inclusion schemes in Whitehall.
Facility time is time off from a worker’s job - granted by employers - to enable a union official to perform union duties.
Critics claim it means taxpayers fund activities that could include arranging strikes.
But supporters say it is a vital tool in forging good relations between staff and bosses.
Scrapping Whitehall diversity officers would save around £12 million a year - Ms Truss's campaign said there are at least 326 of the roles in government departments.
