More than two million public sector workers to get pay rises despite wage increase ‘pause’
Chancellor uses private sector cuts to justify ‘freeze’ for some key workers, but NHS and low-paid exempt
THE majority of public sector workers are to be given a pay rise, the Chancellor said, despite the private sector bearing the bulk of economic pain from the pandemic. Rishi Sunak confirmed in the Commons that there would be a general “pause” in pay increases next year for workers in the public sector.
However, he exempted up to 1.4 million doctors, nurses and other NHS workers as well as public sector staff earning less than £24,000, who will be entitled to rises of at least £250.
This will cover an estimated 2.1 million low-paid public sector workers – or about 38 per cent of the staff in state services.
With the NHS accounting for a quarter of the public sector workforce, it means more than half will be entitled to a pay rise next year despite the outcry over the “pay freeze”.
It also comes despite evidence that Mr Sunak cited to justify the “pause” in pay which showed that the private sector had been hardest hit by the economic fall-out from the coronavirus.
He said unemployment and redundancies were rising in the private sector and many were seeing significant wage cuts. “In the six months to September, private sector wages fell by nearly 1 per cent compared to the previous year, while over the same period public sector pay rose by 3.9 per cent,” he said.
The Treasury said this disparity in wage growth between the public and private sector exacerbated the pre-existing position, where the public sector tended to be paid more than the private sector. The median salary in the public sector was £1,770 higher than in the private sector in 2020, according to the Office for National Statistics.
The difference was starker when pensions were included, with total public sector remuneration about 7 per cent higher than in the private sector in 2019, up from 5 per cent in 2017.
Mr Sunak said the pay restraint to be targeted in 2021-22 was designed to “protect jobs and ensure fairness”.
Ben Zaranko, a research economist at the Institute for Fiscal Studies, said the decision to protect at least half of the public sector meant that the Treasury would save less – and that workers would not face the same sweeping freezes as they did after 2010.
He believed there was a “reasonable economic case” for a one-year pay pause, but questioned if it could be sustained for longer without having an impact on retention. Although there was a pay gap between public and private, it was at its lowest for 25 years, particularly if pensions were excluded.
Despite the softening of the pay “pause” to protect the NHS and lowpaid, there was anger yesterday from unions representing other front-line workers.
John Apter, chairman of the Police Federation, said it was a “kick in the teeth” for police officers: “We are realists; we know that the country is facing a difficult economic future. But rewarding those who have played a vital role in the fight against the virus with a pay freeze is nothing short of a disgrace.”
Dr Mary Bousted, joint general secretary of the National Education Union, said it was a “body blow” to teachers who had been key workers keeping the country going during the pandemic.
Mick Cash, leader of the RMT union, said: “[We] will have no hesitation in taking strike action to deliver our members the pay rise they deserve and in supporting national coordinated action to deliver pay justice for all key workers.”
Michael Gove yesterday wrote to IPSA, the body that oversees MPS’ pay, urging it to emulate the same restraint on MPS’ salaries.
‘Rewarding those who have played a vital role in the fight against the virus with a pay freeze is a disgrace’