Treasury faces renewed calls to end 1% pay cap

Written by Richard Johnstone on 13 April 2017 in News

ONS figures show that pay fell in real terms in the three months to February

The Treasury is facing renewed calls to end the 1% limit on civil service pay increases after figures revealed the real terms value of public sector pay fell in the three months to February.

Figures published by the Office for National Statistics yesterday showed that average weekly earnings in public administration, which includes the civil service, stood at £562 in February, down from £564 in November.

An analysis of the figures by the Resolution Foundation concluded that, once pay rates are adjusted for inflation which stands at 2.3%, this means the value of pay fell by 0.3% in the three months to February.

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Economic analyst Stephen Clarke said the pay packets were shrinking in sectors ranging from accommodation to finance, as well as the public sector.

“While the National Living Wage is protecting the lowest earners from this squeeze, boosting wages across the rest of the economy is the big living standards challenge of this parliament,” he said.

The GMB trade union said the government’s 1% public sector pay cap, which came after a two-year freeze in wages introduced in 2010 as part of then chancellor George Osborne’s deficit reduction plan, meant the average full-time public sector worker has lost out to the tune of £9,000 since 2010.

Rehana Azam, GMB national secretary of public services, said that if the cap remains in place as planned to 2019-20, public servants stand to lose £4,000 more.

“Wages are falling in real terms for both private and public sector workers, but the situation is made even worse in the public sector by the cruel and unnecessary pay caps introduced by the government,” she said.

“We should cherish our public sector workers – instead we offer poverty pay and increasingly poor conditions – no wonder recruitment is down and moral is at an all-time low.”

Trade union Unison added that many in the public sector are suffering real financial hardship.

It’s time ministers looked again at their pay policy and gave public sector employees a decent pay rise,” said general secretary Dave Prentis.

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Richard Johnstone is CSW's deputy editor and tweets as @RichRJohnstone

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