Sunak Expected to Confirm End of Public Sector Salary Freeze | Public sector remuneration
Rishi Sunak is expected to confirm that the “pause” on public sector wages that has affected 2.6 million teachers, police and civil servants will be lifted in April, as the economy rebounds after Covid.
The Chancellor imposed the freeze last November and it came into effect in April. At the time, he said it was unfair for public sector workers to get a raise when many of their private sector counterparts were on leave or lost their jobs.
With rising wages in many sectors and the prime minister using his party conference speech to highlight prospects for a “high-wage economy,” Treasury sources said that argument no longer applied. .
However, each department in Whitehall will have to fund any salary increase from its own budget, and TUC analysis shows that the salaries of many public sector workers have dropped significantly in real terms after years of tight regulations.
TUC General Secretary Frances O’Grady said: “In the face of a looming cost-of-living crisis, the government must increase departmental budgets so that every public sector worker receives a significant pay rise and in real terms. If ministers do not give ministries the funds to raise salaries, they are not ending the wage freeze in the public sector.
A recent poll conducted for the TUC by YouGov found that 27% of public sector workers said the government’s wage policy made them more likely to quit.
NHS staff and civil servants earning less than £ 24,000 were exempt from the pay freeze, but it covered 2.6 million other public sector workers, including teachers, firefighters, military and police .
Sunak will define the funding for each department as part of a three-year expenditure review, which it will present with the budget on October 27.
Defense Minister Tobias Ellwood has previously said he hopes the military will get a pay rise of “over 1%” from April. Local government workers were offered 1.75%, well below the rate of inflation, which was rejected by the unions.
A government spokesperson said: “We recognize the incredible work that public sector workers have continued to do throughout the pandemic, and the challenges many of them faced as key workers. ”
Sunak is also expected to announce the April increase in the “National Living Wage” (NLW), after the Low Wages Commission produced its final report in the coming days. The commission is advising the government on how to meet George Osborne’s target of raising the NLW to two-thirds of median earnings by 2024.
In March, he suggested £ 9.42 as a rate likely to be needed, based on wage forecasts at the time – but since then wages have risen sharply and some experts believe a higher figure is likely . The current rate is £ 8.91.
Johnson seized on the promise of a higher post-Brexit economy earlier this month as gasoline shortages hit forecourts and businesses in sectors such as hospitality and retail complained of difficulty in recruiting Staff.
However, Sunak has made it clear that he is concerned that inflation could get out of hand if wages rise without productivity improvements – through better skills and investments in new technology, for example.
“This is something that we discussed together in this country and collectively decided that this was not the right model for the future,” he told reporters at meetings of the International Monetary Fund (IMF ) in Washington this week.
“We want to move to an economy with higher wages and more skills. Now obviously that will take time, and we would like to make sure that it comes with increases in productivity, so it’s not inflationary.
A Treasury source said Sunak was concerned about the risks of rising inflation, which could lead the Bank of England to raise interest rates and potentially increase the cost of servicing the government’s debt. “It’s something he’s been watching for a long time now,” the source said.
British inflation measured on the consumer price index was 3% in August, against 1% in March.