Rishi Sunak announces public sector pay freeze for next year

Rishi Sunak today announced the Government will freeze public sector pay next year but NHS workers and those in the lowest paid jobs will still get an increase in their wages.  

The Chancellor said that while much of the private sector had been hammered during the coronavirus crisis, public sector workers had largely not been affected by job losses. 

Mr Sunak said in that ‘difficult context’ he could not justify ‘significant across the board’ pay increases for all public sector workers. 

However, he revealed NHS staff will be exempt from the pay freeze while public sector workers on the lowest wages will be guaranteed a pay hike of at least £250 next year. 

The Chancellor said this approach will mean that a majority of public sector workers will see their wages increase. 

Mr Sunak had promised in the days leading up to the Spending Review that the nation would not see a return to austerity. 

But the decision to cap many workers’ pay next year is likely to spark accusations of the Chancellor going back on his word. 

Mr Sunak had paved the way for the freeze on Sunday when he failed to rule it out as he also said it was not the time to impose tax hikes ‘in the fog of enormous economic uncertainty’. 

Unions had warned the Chancellor that there would be a chance of industrial action if he went ahead with the move. 

Meanwhile, Labour said capping salaries would be an ‘absolute kick in the teeth’ for frontline workers after their efforts during the coronavirus crisis.

Mr Sunak had told Sophy Ridge on Sky News at the weekend: ‘You will not see austerity next week, what you will see is an increase in Government spending, on day-to-day public services, quite a significant one coming on the increase we had last year.’

He added: ‘When we launched the spending review I did say to departments that when we think about public pay settlements I think it would be entirely reasonable to think of those in the context of the wider economic climate.

‘I think it would be fair to also think about what is happening with wages, with jobs, with hours, across the economy, when we think about what the right thing to do in the public sector is.’ 

Frances O’Grady, the head of the TUC confederation of trade unions, had appealed to a ‘sense of fairness’ in urging ministers not to impose a public sector pay freeze.

‘We saw ministers join millions of us clapping firefighters, refuse collectors, social care workers – I don’t think this would be the time to reward them with a real pay cut,’ she said.