Advertisement - Content continues below
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 - Content continues below
Advertisement - Content continues below

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 - Content continues below

Support The Big Issue and our vendors this Christmas

Every time you buy a copy of The Big Issue, subscribe or donate, you are helping our vendors to work their way out of poverty by providing 'a hand up not a hand out.' You’re helping Big Issue vendors achieve their #BigWish

Recommended for you

Read All
This pioneering project defied national reoffending rates - by giving young people a job
Employment

This pioneering project defied national reoffending rates - by giving young people a job

MPs launch inquiry into NHS staffing crisis
Employment

MPs launch inquiry into NHS staffing crisis

What is the 4 day working week and why are UK campaigners calling for it?
Four day week

What is the 4 day working week and why are UK campaigners calling for it?

This chart shows the real cost of beer over the last 20 years
Cost of Living

This chart shows the real cost of beer over the last 20 years

Most Popular

Read All
Video showing Boris Johnson repeatedly 'lying' to parliament hits 40 million views
1.

Video showing Boris Johnson repeatedly 'lying' to parliament hits 40 million views

Legacy benefits freeze left disabled people living on ‘historically’ low payments, court hears
2.

Legacy benefits freeze left disabled people living on ‘historically’ low payments, court hears

'Noel Gallagher was mega hungover and Will.i.am kept walking off' - The stories behind Big Issue photoshoots
3.

'Noel Gallagher was mega hungover and Will.i.am kept walking off' - The stories behind Big Issue photoshoots

Plans to remove British citizenship without notice 'would repeat Windrush mistakes'
4.

Plans to remove British citizenship without notice 'would repeat Windrush mistakes'