Public sector pay rises 4.5% as private sector salaries fall

PUBLIC sector pay has risen 4.5 per cent on average since the Covid-19 pandemic struck – while millions of private sector staff have seen their earnings tumble.

Official figures showed that, while frontline workers have on average received pay increases this year, weekly earnings in the private sector were 0.9 per cent lower in the May to July period compared with a year earlier.

The average public s ector worker is now paid £563 a week – almost £30 more than the £534 received by staff at private firms. The gap was just £6 in November, Office for National Statistics data showed. Professor Trevor Williams, an economist at Derby University, said: ‘This is a fairness issue. People working in shops, in delivery services and in utilities are every bit as much essential workers as those in the public sector and they need to be respected. As it is, they are the lowest paid of everyone.’

The Treasury in July announced above-inflation pay rises of 2.5 per cent for both police and prison officers, 3.1 per cent for teachers and 2.8 per cent for doctors.

By contrast, private sector workers were far more likely to have been furloughed than those in the public sector, most of whom remained on full pay regardless of the amount of work done.

Even at its most generous, the Government’s furlough scheme paid only 80 per cent of wages, with employers choosing whether to cover the remaining 20 per cent themselves.

Hardest hit by pay decreases was the construction industry – where earnings fell by 7.5 per cent – followed by retail, hotels and r est aurants, where pay declined 3.2 per cent on average.

The figures published by the ONS last week showed that across the whole economy pay excluding bonuses rose at 0.2 per cent annually in the period May to July.

Figures due on Friday will highlight the continuing damage to the public finances from the emergency response to the pandemic. They will cover the state of the Government’s coffers in August and are expected to show further deterioration, according to Dhaval Joshi, chief European strategist at BCA Research.

In July, national debt exceeded £2 trillion for the first time. The total was £227.6 billion higher than at the same point a year earlier.

Higher national debt levels will make it harder for Rishi Sunak to pacify MPs and businesses who want the Chancellor to extend the furlough scheme beyond October for sectors such as aviation and hospitality.