Unions warn proposal to reduce payouts by a quarter as headcount shrinks could lead to industrial action

Ministers are planning to reduce redundancy pay for civil servants while cutting 91,000 Whitehall jobs, setting up a bitter confrontation that unions warned may lead to legal and industrial action.

The proposals could see average packages cut by a quarter at a time when the Cabinet Office minister, Jacob Rees-Mogg, is aiming to shrink the civil service by a fifth.

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