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Biggest pay rise in 10 years for UK public sector

Staff Writer |
The British government announced what it described as the biggest pay rise for 10 years for public sector workers.

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Around 1 million school teachers, prison officers, members of the armed forces, police, doctors and dentists will see their pay rise between 2 percent and 3.5 percent.

The pay increases are mostly above inflation, with consumer price index (CPI) inflation at 2.4 percent, and are aimed at rebalancing public sector pay against private sector pay and helping to recruit and retrain qualified workers, according to an expert.

Jonathan Cribb, senior research economist at the Institute for Fiscal Studies (IFS), told Xinhua in an exclusive interview: "Public sector pay was frozen in 2010 and since then on whole increased by just 1 percent per year until last year. In most years, although not all, that was lower than inflation.

"Since 2010 public sector pay has grown slower than private sector pay, but one rationale for that is that public sector pay grew much faster than the private sector between 2007 and 2011. A gap opened up and as part of the austerity package the government has closed that gap, closing around 2016-17."

Cribb said that over the past two years public sector pay had fallen behind inflation and also behind private sector pay.

"These pay increases go some way to balance that for some workers," said Cribb.

However, no extra money or new taxes have been announced to pay for the pay rises.

IFS figures showed that paying public sector workers costs 180 billion pounds (about 236.5 billion US dollars) per year, about 9 percent of GDP.

Public sector pay is the second largest item of government spending after social security payments. Each 1 percent increase in pay for the public sector workforce costs the government about 1.8 billion pounds per year.

Cribb said: "The government has committed no new money, it is expecting departments to find money to pay for the extra pay. One suggestion is that government departments have been spending less than they are allocated and could use this underspend to pay the workers.

"That is at best a temporary solution, and if the Treasury does not give public sector employers (and government departments) more money, in the long run they will need to make cuts in the long run to what they are doing. That could include reducing the number of people they employ."

Trades unions were unhappy at the pay announcement and called for more money.

Trades Union Congress (TUC) General Secretary Frances O'Grady said: "These pay settlements are a long way from good enough."

"Many public sector workers will still get pay settlements that are less than inflation, so the pay misery will continue. And it's not clear if all the rises will be properly funded by the Treasury or will instead come from raiding budgets for frontline services," said O'Grady.

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