Millions of public sector workers are set to get a pay rise in this week’s Budget as the UK faces increasing inflation growth.
The Treasury tonight said the size of the wage increase will be determined next year after it has been given recommendations from pay review bodies.
Rishi Sunak froze pay for all public sector workers in 2021-22, except for the NHS and those earning less than £24,000-a-year.
The chancellor said he would now lift the one-year pay freeze due to strengthening economic conditions and “encouraging signs in the labour market”.
Rising prices will also have been a factor, with annual Consumer Price Index (CPI) growth hitting 3.1 per cent in September – the highest inflation levels for a decade.
Bank of England chief economist Huw Pill has said this figure could hit 5 per cent, which would put a serious cost of living squeeze on British households.
“The economic impact and uncertainty of the virus meant we had to take the difficult decision to pause public sector pay,” Sunak said.
“And now, with the economy firmly back on track, it’s right that nurses, teachers and all the other public sector workers who played their part during the pandemic see their wages rise.”
Private sector pay was constrained to 1.8 per cent last year as the UK economy dealt with the Covid crisis.
The chancellor said last year that it would not be fair to implement sweeping public sector pay rises, considering the recession and private sector wage conditions.
It comes alongside plans to increase the National Living Wage from £8.91 to £9.50 an hour.
Sunak’s Treasury press team have put out a stream of spending announcements over the past five days, which have revealed around £30bn of spending that will be in Wednesday’s autumn Budget.
House of Commons speaker Sir Lindsay Hoyle today hit out at Sunak for the torrent of press releases, saying that these announcements should be made in parliament.
Referring to Hugh Dalton’s 1947 resignation after briefing the Budget hours before it took place, Hoyle said: “At one time ministers did the right thing if they briefed before a Budget – they walked.
“It seems to me we’ve got ourselves in a position that if you’ve not got it out five days before, it’s not worth putting it out.
“It’s not acceptable and the government shouldn’t try to ride roughshod over this house. It will not happen.”