The Government is considering offering offering public sector workers pay increases of up to 6.5 per cent after recommendations from pay review bodies.
A final decision is expected within days, with the Prime Minister, Rishi Sunak, warning he has to take a “responsible” approach to the public finances and the wider economic picture.
Rejecting the pay review bodies’ recommendations risks further angering unions and exacerbating strike action.
A 6.5 per cent increase would still be below inflation, which was last reported at 8.7 per cent for May and peaked at over 11 per cent late last year.
Who are public sector workers?
The public sector is the part of the economy composed of both public services and public enterprises – it includes everything from healthcare and education to transport and the military, as well as people who work for the Government itself.
The Office for National Statistics (ONS) says around 5.4 million people work in the UK’s public sector, in 300 occupations.
Nearly half of these workers are in occupations related to health, education, social work, government, the police, and domestic services.
One tenth of all public sector workers are school teachers and a quarter work in the health and social care sectors.
Will public sector workers get a pay rise?
All of the independent pay review bodies have recommended pay rises of between 6 and 6.5 per cent for public sector workers.
The Chancellor, Jeremy Hunt, has ruled out pay rises funded through additional borrowing, urging workers to “understand this difficult period”.
With the Government refusing to borrow more and no prospect of tax rises to raise the money, wage increases could be denied or departmental budgets could be raided to fund them, potentially leading to cuts to services.
Mr Sunak, speaking at the Nato summit in Vilnius, Lithuania, said: “We will be guided by a couple of principles: the first is fairness, fairness for our public sector workers because we want to make sure that they are rewarded fairly for their hard work, but also fairness for taxpayers who ultimately have to foot the bill for pay rises.”
The Prime Minister has made halving inflation this year one of his policy priorities, and said the Government will resist any increases which could risk making it harder to meet that goal.
Teachers from the NASUWT union in England plan to stage continuous action short of strike action starting in September, with a warning that the expected 6.5 per cent rise in wages recommended by their pay review body was the minimum that should be offered.
And on Thursday junior doctors represented by the BMA launched their longest walkout yet over their long-running wage dispute.
BMA leaders urged the Government to return to the negotiating table in an effort to resolve the row, which has already led to a series of strikes and thousands of cancelled operations and consultations.
Dr Robert Laurenson and Dr Vivek Trivedi said: “Today marks the start of the longest single walkout by doctors in the NHS’ history, but this is still not a record that needs to go into the history books.
“We can call this strike off today if the UK Government will simply follow the example of the government in Scotland and drop their nonsensical precondition of not talking whilst strikes are announced and produce an offer which is credible to the doctors they are speaking with.
“The pay offer on the table to junior doctors in Scotland and how it was reached throws into sharp relief the obstinate approach being taken by the Prime Minister and the Health Secretary, Steve Barclay.
“The Health Secretary has said there can be no talks while strikes are planned – Scotland has proved him wrong. He said above 5 per cent wasn’t realistic – Scotland proved him wrong. He refused to even acknowledge the concept of pay restoration – Scotland proved this is not only possible but essential.”
The Health Secretary responded: “It is disappointing that the BMA is going ahead with further strike action. This five-day walkout by junior doctors will have an impact on thousands of patients, put patient safety at risk and hamper efforts to cut NHS waiting lists.
“We were in discussions about pay and a range of other measures to improve the working lives of junior doctors until their representatives collapsed the negotiations by announcing further strikes. A pay demand of 35 per cent or more is unreasonable and risks fuelling inflation, which makes everyone poorer.
“If the BMA shows willingness to move significantly from their current pay demands and cancels these damaging and disruptive strikes, we can get around the table to find a fair deal to resolve this dispute.”