The government is expected to agree above-inflation pay rises for public sector workers in the coming days, amid concerns about the costs of a no-deal, Sky News understands.
Independent pay review bodies already recommended the value above inflation to ministers for teachers and nurses of around 5.5% to keep them in line with increases in the private sector, the reports suggested.
Sky News political editor Beth Rigby understands that Chancellor Rachel Reeves is likely to approve the independent recommendations as early as next week for all public sector employees, despite the Institute for Fiscal Studies warning that such an increase could cost an extra £10 billion on top do The 3% increase that ministers would have already budgeted.
Speaking on his Electoral Dysfunction podcast, Rigby said government sources were concerned about the other costs of not agreeing to pay review bodies’ recommendations – namely industrial action by unions.
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“[It would be] noise around a new government they don’t want, [especially] when they criticized the Conservatives so much for not reaching salary agreements,” she said.
A Whitehall source told Rigby they would be “very surprised” if the Treasury did not accept the pay recommendations, given the risk of industrial action if the government refused.
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It turns out as Mrs. Reeves is expected to do reveal a black hole in public finances of around £20 billion next week.
The last government was plagued by strikes over public sector wages, following the rising inflation that followed Liz Truss’s mini-budgetwith nurses, doctors, teachers and railway workers among the many sectors who downed tools.
Although ministers have finally reached agreements with most unions, junior doctors and some railway workers continue to fight for better pay and conditions.
During the election campaign, Labor promised to come to the negotiating table immediately if it won, and Health Secretary Wes Streeting promised has already held meetings with the British Medical Associationwhile Transport Secretary Louise Haigh is in discussions with rail union Aslef.
But both Reeves and Prime Minister Sir Keir Starmer have warned of their Tory “heritage”, claiming the public purse is in an even worse state than they initially thought.
Louise Haigh wants to end rail strikes… Photo: Reuters
…while Wes Streeting works to reach an agreement with striking doctors
Reeves is due to give a speech to Parliament next week, outlining the state of the economy and his plans to tackle it.
It was also at this time that she could announce her decision on public sector salaries.
In March this year, there were 5.95 million public sector workers in the UK, according to the Office for National Statistics (ONS).
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Speaking to Sky News’ Sunday Morning with Trevor PhillipsTreasury Secretary James Murray said he would set the government’s position “in the context of public finances and the public expenditure legacy that we have”.
But suggesting accepting the 5.5% figure, Murray said: “Let us be clear: there is obviously a cost in responding to the recommendations of pay review bodies.”
“But… there is also a cost in not reaching an agreement because there is a risk of union action, there are long-term problems in terms of recruiting and retaining teachers, people who work in the NHS, agents of the police and so on. So we need to define our path forward.”
Will the public sector receive a salary increase?
Murray added: “The appropriate process is to consider the recommendations of the pay review bodies and then define our response in light of public finances and public expenditure heritage.”
This story originally appeared on News.sky.com read the full story
