'No public sector pay rise expected' in Hammond's Budget

Report suggests Chancellor Philip Hammond is not planning to offer cash to fund a pay rise


Photo: Jonathan Brady/PA

By John Ashmore

21 Nov 2017

Philip Hammond will reportedly resist pressure to increase public sector pay when he announces his Budget tomorrow.

Cabinet colleagues, Labour and numerous trade unions have been calling for a departure from seven years of pay restraint for state workers, but the Times reports the chancellor will not offer any new cash.

The government scrapped the 1% pay cap by giving police and probation officers a small pay rise earlier this year, but there are fears among some ministers that offering increases in other parts of the public sector will fuel tension with staff who do not see a pay boost.


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The TUC released figures yesterday suggesting the average public sector worker has seen a real-terms pay cut of £2,000 since 2010, with the situation exacerbated by rising inflation over the last year.

Elsewhere, ITV News reports that the Office for Budget Responsibility will say the government is on course to hits its target of reducing the structural deficit to 2% of GDP by 2020-21, which would appear to rule out any major new spending commitments from Hammond. 

Reports over the weekend suggested nurses could be in line for a pay rise, but the Treasury apparently wants to review productivity in the health service before promising any more money.

Nor has Hammond bowed to demands from communities secretary Sajid Javid to borrow tens of billions for housing, although there are suggestions he could scrap stamp duty for first-time buyers to help younger people get on the housing ladder.

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