Public sector pay cap: Jeremy Hunt hints at Treasury discussions to lift restrictions

Hunt tells NHS conference that discussions set to take place with chancellor Philip Hammond will look at ending pay strictures

Photo credit: PA

By Richard Johnstone

15 Jun 2017

The end of the government’s 1% cap on public sector pay rises looks increasingly likely after health secretary Jeremy Hunt revealed discussions with the Treasury intended to review the limit, while local government trade unions submitted a claim for a 5% hike.

In a speech to the NHS Confederation conference, Hunt – who was reconfirmed in post following the general election, said he had “a great deal of sympathy” for calls to give health service staff higher increases, particularly nurses.


"I will make sure our conversation is reflected back to the chancellor before we make that decision,” he added.

Hunt’s comments come after former Conservative MP Gavin Barwell, who was appointed as Theresa May’s chief of staff after losing his Croydon Central seat to Labour, has pointed to public sector pay restraint as a key reason for dwindling Tory support in the general election campaign.

Public sector pay was originally frozen for two years from 2010. This was then changed to a 1% cap on annual pay rises, which is still in place and was due – under pre-election Conservative plans – to remain in place until at least 2020.

Barwell’s comments echo those of former head of the civil service Lord Kerslake, who told CSW last week that the pay freeze had not only directly influenced voting decisions in June 8’s poll, but that its implications for the provision of services such as health and social care were also inextricably linked to issues close to voters hearts.

“It’s hard to see any party doing austerity now,” he said.

“The landscape is changing, and the consensus on public sector pay will have to be revised.”

Hunt's comments come after Public and Commercial Services union general secretary Mark Serwotka wrote to prime minister Theresa May urging her to use next week’s Queen’s Speech to bring an immediate end to cap.

Since the pay cap has been in place, the value of average pay in the civil service has fallen by up to 9% against inflation, he highlighted. If the pay cap continues until 2020, as the last Conservative government had originally proposed, average civil service pay will have fallen in value by over 20%.

It has also been revealed that trade unions representing council workers have submitted a claim for a 5% pay increase from next April.

The three unions that represent local government workers ­– Unison, Unite and the GMB – said that school and council employees’ living standards have plummeted as their wages have fallen way behind inflation after eight years of pay restraint.

The Local Government Association, which represents councils in the negotiations, said it would include the claim in its consultation over the possible 2018-19 increase.

However, the chair of the National Employers group Sian Timoney added the “ambitious” claim was a surprise.

“We recognise that public sector workers have had lower than average pay awards for a few years now, but local government continues to face significant financial challenges so we are surprised that the unions are seeking such an ambitious pay award. Local government has lost more than half a million jobs in recent years and meeting this claim would result in many more such job losses.”

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