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Rishi Sunak Accepts Public Sector Pay Rise Recommendation Of More Than Six Per Cent

Rishi Sunak announced the government has accepted the pay review body's recommendations in full (Downing Street)

7 min read

Prime Minister Rishi Sunak has confirmed that millions of public sector workers will receive pay increases of more than 6.5 per cent for 2023-24, accepting the full recommendations of the independent pay review body and forcing ministers to find cuts of up to £2bn.

Teachers will be given a 6.5 per cent pay rise and junior doctors will receive 6 per cent. Police and prison officers will receive rises of 6 per cent while armed forces personnel will receive five to six per cent. Teachers have confirmed that further strikes will now be called off in response to the pay rise. 

The government will not pay for wage rises with extra borrowing, meaning departments will be forced to make cuts elsewhere in their budgets to cover the costs. There will also be a rise to the NHS health surcharge for migrants, and visa charges in order to raise money for the pay rises. 

Pay review bodies - which offer advice on how much public sector workers should be paid - put forward their recommendations to the government. Each board of experts advise on workforces ranging from the police, prison officers, dentists and doctors. Their decisions are not legally binding but are usually accepted by government officials.

The Prime Minister delivered a press conference on Thursday afternoon to confirm the changes. "I can confirm today that we are accepting the headline recommendations of the pay review bodies in full but we will not fund them by borrowing more or increasing your taxes," Sunak said.

"It would not be right to increase taxes on everyone to pay some people more, particularly when household budgets are so tight. Neither would it be right to pay for them by higher borrowing. Because higher borrowing simply makes inflation worse.

"Instead, because we only have a fixed pot of money to spend from that means government departments have had to find savings and efficiencies elsewhere in order to prioritise paying public sector workers more."

Sunak also announced that the 6.5 per cent pay rise has halted further strikes for teachers.

"All teaching unions have just announced that they're suspending all planned strikes immediately," he confirmed.

"Teachers will return to the classroom, disruption to our children's education will end and the unions have themselves confirmed that this pay offer is properly funded. And so they're recommending to their members and then to the entire dispute.

"So it is now clear momentum across our public services is shifting to the vast majority who just want to get on with their lives calling of serving others and now returning to work."

A rare joint statement between the government and the four main education unions, ASCL, NAHT, NASUWT and NEU, set out that they hoped the new deal on pay would end strikes and resume normal relations between the government and unions.

“This is the largest ever recommendation from the School Teachers’ Review Body (STRB)," the statement said.

"A 6.5 per cent increase for teachers and school leaders recognises the vital role that teachers play in our country and ensures that teaching will continue to be an attractive profession.

“Importantly, the Government’s offer is properly funded for schools. The Government has committed that all schools will receive additional funding above what was proposed in March - building on the additional £2 billion given to schools in the Autumn Statement. The Government will also provide a hardship fund of up to £40 million to support those schools facing the greatest financial challenges."

ASCL, NAHT, NASUWT and NEU will now put this deal to members, with a recommendation to accept it.

The Prime Minister then called on all other unions who continue industrial action to end their disputes, insisting no further strikes will force the government's hand over pay. 

"Today's offer is final. There will be no more talks on pay. We will not negotiate again on this year settlements and no amount of strikes will change our decisions," he continued. 

"Instead, the settlement we reached today gives us a fair way to end the strikes. A fair deal for workers and a fair deal for the British taxpayer."

Today the longest strike in NHS history started as junior doctors began a five-day walk out over pay and conditions. Health leaders claimed the industrial action will prevent the NHS from cutting waiting lists for operations - a key pledge Sunak set out to do at the start of the year.

Industrial action across the health service will take place on 11 days over the next fortnight. Strikes have already affected 600,000 appoints and are set to impact thousands more appointments, according to Professor Sir Stephen Powis, the NHS national medical director

Sunak and Hunt had already confirmed public pay sector rises would not be funded by extra borrowing. For pay rises above 3.5 per cent, it is expected that the funds will come out of existing Whitehall budgets, government sources told the BBC earlier this week

Inflation remained stubbornly high in May at 8.7 per cent while core inflation – which excludes the cost of food and energy – rose from 6.8 per cent to 7.1 per cent.

One senior Conservative claimed the public sector wage demands would only be affordable if the government made cut backs elsewhere. Another government aide also told PoliticsHome that they believed the country could not afford the public sector pay increases which were laid out this week. 

Another Conservative MP voiced concerns that the pay increases will contribute to even higher inflation. 

”The government has little choice but to accept the pay review body recommendations," they said. 

"Had they rejected the endless strikes it would have debilitated public services and made any chance of achieving pledges difficult. The obvious problem is that this is likely to add to inflation, but I'm not sure how much.”

Hunt has said that such actions could stoke inflation further. “If you fund any public sector pay rise by increasing borrowing that year, that pumps billions of pounds of extra money into the economy. And when companies can't meet the demand, when people try and spend that money, they react by putting up their prices,” he told ITV's Robert Peston on Wednesday.

Speaking at this week's NATO summit in Vilnius, Rishi Sunak claimed he would be "fair" on taxpayers who would "foot the bill" for public sector pay rises. 

"We will be guided by a couple of principles: the first is fairness, fairness for our public sector workers because we want to make sure that they are rewarded fairly for their hard work, but also fairness for taxpayers who ultimately have to foot the bill for pay rises,” he said. 

Greg Smith, Conservative MP for Buckingham, told PoliticsHome he believed significant pay rises for the public sector could "fuel inflation".

"Of course, everyone wants a pay rise but where is the money going to come from? If you fuel inflation then everyone is poorer. Sometimes we don’t look at the debate as a whole, we just focus on the pay of individuals – which is a perfectly natural thing to do. There has to be a more frank conversation over pay," he said. 

Sunak has made cutting the debt and growing the UK economy two of his five core missions. The UK government has not kept a Budget surplus since 2001, according to OECD statistics, and runs a budget deficit of £87.4bn, according to the ONS. Meanwhile the UK economy contracted by 0.1 per cent between April and May. The UK economy has remained largely flat as high inflation has persisted throughout.

The Prime Minister has dealt with mutliple public sector strikes since taking office in October last year. In 2021, more working days were lost to strikes since 1989 when Margaret Thatcher was Conservative Party leader. 

An agreement for one million NHS workers was agreed in June, including newly qualified nurses, who will see their salary increase by more than £2,750 over 2 years.

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