Government considering end to public sector pay cap, defence secretary Michael Fallon reveals

Civil service union said there is “an unarguable case” to lift restrictions after the Conservatives lost their majority at the election


By Richard Johnstone

28 Jun 2017

Defence secretary Sir Michael Fallon has said government will consider ending the public sector pay cap, ahead of a vote in parliament later today to lift the 1% limit.

Speaking at a Royal United Services Institute event in central London, Fallon said ending the restriction was “something we have to consider not just for the army but right across the public sector as a whole”.

Public sector pay, including for civil servants, was originally frozen for two years from 2010, followed by a 1% cap on annual pay rises. This is due – under pre-election Conservative plans – to remain in place until at least 2020.


Fallon highlighted that in the military, as well in other parts of the public sector including the senior civil service, pay levels were partly a matter for the pay review bodies – although the government has set them a mandate to keep increases within the 1% limit. For civil servants outside the SCS, pay policy is set by the Treasury.

Decisions on pay increases also include forecasts of the inflation rate, and Fallon said it was likely this would start falling back from its current level of 2.7% from the autumn.

“But it is obviously something we have to consider not just for the army but right across the public sector as a whole,” he added.

The comments came as MPs will today vote on a Labour plan to end the 1% limit on public sector pay increases as part of an amendment to the Queen’s Speech.

The vote, which will take place this evening, is intended as a “test case” of MPs' willingness to oppose further austerity measures, Labour leader Jeremy Corbyn said.

The pay cap is under increasing pressure after a poll published yesterday found a majority of people supported ending the limit. The restrictions have also been blamed by prime minister Theresa May’s chief of staff Gavin Barwell for hitting Conservative support in the general election. Echoing this, former head of the civil service Lord Kerslake, has told CSW that the pay freeze had directly influenced voting decisions in the election.

Emphasising the need to support the emergency services, Corbyn said “you can’t have safety and security on the cheap”, adding that seven years of cuts to emergency services had made the country less safe.

“Our emergency service workers make us proud at the worst of times for our country, such as the Grenfell Tower fire and the recent terrorist attacks, and deserve the pay rise they have been denied for seven years,” he said.

Public and Commercial Services union general secretary Mark Serwotka said that there was now “an unarguable case to lift the pay cap from all civil and public servants to start to reverse seven years of cuts to their living standards”.

He added that following the election, the government does not have a mandate to continue with the restriction.

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