Public sector wages: Rishi Sunak considers pay freeze for workers

20 November 2020, 05:26 | Updated: 20 November 2020, 09:29

Chancellor of the Exchequer Rishi Sunak
Chancellor of the Exchequer Rishi Sunak. Picture: PA

By Megan White

Rishi Sunak is preparing to impose a pay cap on five million public sector workers as he seeks to rebuild the public finances, according to reports.

The Chancellor will use next week's spending review will limit pay rises in the public sector to at or below inflation, the Daily Mail reported.

Only frontline NHS doctors and nurses will be exempt from the cap in recognition of their work during the coronavirus pandemic, the paper said.

Read more: Northern Ireland to extend lockdown weeks before Christmas

Read more: WHO suggests swapping Xmas dinner for Covid-friendly 'picnic in the park'

However teachers, police, members of the armed forces as well as NHS managers will all be affected.

The move is likely to be met with fury by public sector unions who say their members bore the brunt of Conservative austerity cuts following the global financial crisis.

Defence Secretary says Christmas lockdown decision will be made around December 2nd

The Chancellor is already under fire over widespread reports he is preparing to set aside the commitment to spend 0.7% of national income on overseas aid as he looks for savings.

The Treasury would not comment on the reports ahead of the Chancellor's statement on Wednesday.

However, launching the spending review in July, Mr Sunak warned of the need for "restraint" in future public sector pay settlements.

He said awards made in the review period would have to take account of the "wider economic context".

The Chancellor also stressed the need for "fairness" - pointing out that while public sector pay was rising, wages in the private sector had fallen back during the coronavirus pandemic.

That argument was backed by a new report by the Centre for Policy Studies (CPS) which said private sector workers had suffered far more from the economic impact of the disease.

James O'Brien reacts to Chancellor Rishi Sunak's winter plans

The centre-ring think tank said measures were needed to ensure the labour market was not unfairly weighted towards the public sector

It said that a three-year pay freeze across the public sector could save up to £23 billion, helping to plug the hole in the public finances opened up by the pandemic.

If the NHS was excluded, the CPS said that it could still save £15.3 billion over the three years.

Alternatively, it said that an annual 1% pay cap would save £11.7 billion over the period - or £7.7 billion if it did not apply to healthcare workers.

CPS director Robert Colvile said: "The economic impact of the Covid-19 pandemic has been severe but the pain has not been shared equally.

"Healthcare workers aside, it is difficult to justify generous pay rises in the public sector when private sector wages are actually falling.

"At the same time, there is a need to control public spending and reduce the structural deficit which the pandemic is likely to have opened up."

The Unite trade union which said it appeared the CPS was being used as an "outrider" ahead of Mr Sunak's statement next week.

Assistant general secretary Gail Cartmail said: "The CPS analysis is insulting to those public sector workers that have underpinned the fabric of society during this continuing pandemic.

"In the spring, the Prime Minister was praising NHS staff for saving his life.

"Now, in the autumn, he needs to ensure that his Chancellor turns those warm words into hard cash for those that ensure the efficient running of the NHS, schools and colleges, and the myriad of services provided on a daily basis by local councils."

Unison general secretary Dave Prentis said a new pay cap would be a "cruel body blow" to NHS staff not on the frontline.

"Key workers across all public services remain at the heart of the fight against Covid," he said.

"The Government must do what's right next week and announce the wage rise ?all staff have more than earned.

"Anything less risks destroying morale when the entire country is counting on them."

More Latest News

See more More Latest News

Soham monster murderer Ian Huntley has sparked outrage by wearing a number 10 Man Utd-style football shirt in an apparent reference to his victims - 10-year-olds Holly Wells and Jessica Chapman.

Soham monster Ian Huntley 'wears Man Utd-style top' in apparent sick reference to 10-year-old victims

Dozens of Russian spies have been sanctioned by the Government - including 18 military intelligence officers who the Foreign Office says are responsible for malicious cyber-attacks on Britain.

Revealed: Russian spies sanctioned for cyber attacks including on Salisbury Novichok victim Yulia Skripal

Demonstration on the eve of parliament voting to proscribe Palestine Action.

Five charged over break-in at weapons firm Elbit Systems UK during Palestine Action protest

A fund has been launched in memory of the two men who were found dead in the holiday pool

Sister pays tribute to drowned Briton who ‘died trying to save his friend’ in Portugal

The tech firm whose CEO was caught seemingly having an affair with his colleague on the kisscam at a Coldplay gig has broken its silence after a fake statement from the CEO went viral.

Tech firm launches investigation into CEO caught 'having an affair' on kisscam with HR chief at Coldplay gig

Distressing footage Body worn footage shows PC Lydia Ward being comforted by colleagues as she is bleeding from the nose after she tried to arrest an assault suspect at Manchester Airport.

Student tells court he 'did not know' police officers he hit at Manchester Airport were women

Sandie Peggie is the claimant in the tribunal case against NHS Fife.

NHS Fife calls in cops over threats to staff in controversial tribunal case

Arsenal unveil new signing Noni Madueke at Sobha Realty Training Centre on July 18, 2025 in London Colney, England.

Arsenal complete £50m transfer of Chelsea forward amid ‘bullying’ by section of fans

Appearing in Woolwich Crown Court, each member of the group of eight were jailed for their involvement in supplying nearly a tonne of cocaine over seven months.

Drug dealing ‘gangster granny’ who led family in lucrative £1k-a-day cocaine operation jailed for 20 years

Patrick Howlett, 58

Man who sent £56,000 to Philippines for livestreamed sexual abuse of children jailed for 30 years

The chancellor seems likely to freeze fuel duty once again in the autumn Budget, easing a burden on thousands of households amid an ongoing cost-of-living crisis.

Major cost of living boost as fuel duty to be frozen once again

The explosion happened at Biscailuz Center Academy Training.

At least three people killed in 'horrific incident' at Los Angeles sheriff training facility

Jess Glynne usually closes her shows with Hold My Hand, which has become her signature song

Fans chant 'nothing beats a Jet2 holiday' at Jess Glynne concert

Farzana Kauser, 54,

Bradford mum was family crime group boss who used her children in international cocaine plots

Jayden, who was a passenger on the bus and was treated for a suspected broken collarbone, with his mum, Kim outside Minehead Middle Schoo

'I remember climbing out': Pupil opens up about horror Somerset coach crash as boy, 10, dead

Isa Giga

Man who travelled to Syria to 'fight for Jihad’ convicted of terrorism offence