Civil servants warned George Osborne in 2015 about the impact continued public sector pay restraint would have on child poverty rates, newly-released documents reveal.
The GMB trade union has obtained papers under Freedom of Information legistation that reveal Treasury officials warned the then-chancellor that extending the 1% public sector pay cap after the 2015 election would “have a negative impact on family relationships”.
The warning was revealed in a ministerial decision record, which stated that continuing the 1% limit would mean “public sector workers’ take-home pay is not likely to keep pace with inflation”, while extending the cap “could increase financial pressure on families of public sector workers which may have a negative impact on family relationships”.
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The policy decision paper also highlighted that the limit “will make it more difficult for low-income families with children to access essential goods, and will therefore make it harder for the government to hit the Child Poverty Act targets”. There are an estimated 2.4 million children in households in which there is at least one public sector worker in the UK.
The 1% cap on public sector annual pay rises was first introduced in 2012, following a two-year freeze. It was extended in 2015 and remained in place until earlier this year.
The papers also revealed that a further two-year freeze was considered from 2015.
Although the government announced it would end the across-the-board 1% pay award policy for public sector workforces in September 2017, pay restraint has continued, with Treasury pay guidance telling departments to limit average pay awards for civil servants in 2018-19 to a maximum of 1.5%. A trade union challenge to the remit was dismissed at a judicial review last week. Public sector staff in sectors such as health, policing and local government, as well as civil servants working for the Scottish Government, have been offered higher increases.
The Treasury released the paper to GMB after what the union called “a prolonged delay” and the union’s national secretary Rehana Azam said it showed ministers had imposed years of real-terms pay cuts across the public sector “in the full knowledge that it would condemn families and children to poverty”.
She added: “Public sector workers have been forced to leave their homes, use foodbanks and many of our members are unable to fund basic necessities for their children such as an annual holiday.
“If Theresa May is serious about ending ‘burning injustices', she must use this Budget to reverse the fall in living standards that this government has imposed on ordinary working people.”