Advertisement
Employment

England faces £1.7 billion hit from public sector pay freeze, TUC claims

The TUC said the freeze could also lead to weakened wage growth for other workers if public sector employees spent less money

Plans to pause pay increases for public sector workers could cost England’s economy £1.7 billion, the TUC has claimed.

New analysis by the union found the changes to pay could weaken the economy as those working in the public sector were forced to “tighten their belts”.

Lockdowns have taken income away from hundreds of Big Issue sellers. Support The Big Issue and our vendors by signing up for a subscription.

In last November’s Spending Review, which was blasted by campaigners as “a missed opportunity”, Sunak promised a pay rise for NHS doctors and nurses but other public sector workers such as teachers and policemen had their pay frozen. 

TUC general secretary Frances O’Grady said this amounted to a pay cut when inflation was taken into account. 

“Key workers have kept the country going through the pandemic. The prime minister clapped them, but his applause will ring hollow if he cuts their pay,” she said. 

Advertisement
Advertisement

The new analysis, which calculated the difference in economic activity expected with and without the changes, found the economy could shed £1.7 billion between April 2021 to March 2022 if the pay freeze went ahead. This would amount to an average of £3.2 million per constituency.

The TUC claimed the public sector pay freeze could also lead to weakened wage growth for other workers if public sector employees became more frugal, adding that those whose jobs depended on consumer spending could be at particular risk. 

The union is calling on the chancellor not to “repeat the mistakes of the 2010s” when public sector workers saw their pay capped, claiming this led to “wages falling across the economy and the worst slump in living standards in more than 200 years”. 

O’Grady added: “Boosting key worker pay helps everyone. It puts more money in the pockets of working families. And their spending supports jobs in local businesses and high streets.

“This will help to level up our unequal economy. And it gives key workers the respect they have earned.”

A Treasury spokesperson said: ‘’Given the unique impact of Covid-19 on the health service, and despite the challenging economic context, the Government will continue to provide for pay rises for over one million NHS workers.

‘’The Government will also prioritise the lowest paid, with 2.1 million public sector workers earning less than £24,000 receiving a minimum £250 increase.”

Advertisement

Support the Big Issue

For over 30 years, the Big Issue has been committed to ending poverty in the UK. In 2024, our work is needed more than ever. Find out how you can support the Big Issue today.
Vendor martin Hawes

Recommended for you

Read All
How this social enterprise is tackling stigma and helping neurodiverse people into work
Employment

How this social enterprise is tackling stigma and helping neurodiverse people into work

Train drivers to stage more strikes in May, ASLEF union announces: 'We won't back down'
Train strikes

Train drivers to stage more strikes in May, ASLEF union announces: 'We won't back down'

'It's an epidemic': 1.4 million workers trapped in insecure jobs are stuck in precarious rented homes
insecure work and insecure rented homes impact life decisions
Employment

'It's an epidemic': 1.4 million workers trapped in insecure jobs are stuck in precarious rented homes

Millions of Brits think their jobs are 'meaningless.' Could a four-day working work week fix that?
Four-day working week

Millions of Brits think their jobs are 'meaningless.' Could a four-day working work week fix that?

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Citroën Ami: the tiny electric vehicle driving change with The Big Issue
4.

Citroën Ami: the tiny electric vehicle driving change with The Big Issue