The threat of industrial action by unions has been raised if the UK Government continues to freeze public sector wages for more than five million workers across the UK.
Expectations are growing that the Chancellor will use next Wednesday’s spending review to limit public sector wage growth to or below inflation as he tries to rebuild public finances on the brink of a pandemic. Only NHS front-line physicians and nurses will be excluded from the cap in recognition of their work during the coronavirus crisis.
However, teachers, police officers, members of the armed forces as well as NHS managers will all be affected.
The possibility of a freeze on public sector wages came as official figures showed today that public sector debt reached a new high of 2.0 2.08 trillion at the end of October after the British government borrowing reached a record .3 22.3 billion last month.
Next week’s expenditure review will be accompanied by the latest economic and fiscal forecasts from the Office of Budget Responsibility, the Government’s independent forecaster; they will be gloomy reading.
Mark Serwotka, Secretary General of the Public Services and Commerce Syndicate, said: “Civil servants along with millions of other public sector employees have held the leading position throughout this pandemic and the last thing they deserve is another pay freeze.
“Our members have secured universal credit, collected taxes, secured our borders and prisons in this unprecedented pandemic, and have already suffered 10 years of salary restrictions.
“Private companies have been allowed to secure lucrative Covid contracts worth 17 17 billion, yet ministers are not willing to reward their staff for all the incredible work they have done this year.”
He further added: “If Rishi Sunak fails to pay public sector employees properly, there will be widespread outrage and industrial action cannot be ruled out.”
Rehana Azam, National Trade Union Officer GMB said: “We will not stand by and allow public sector employees to pay for this crisis with new savings and a wage freeze to lower morale. This is a blow to the teeth for those who have fought the pandemic.
“Workers have lost their friends and loved ones. The crisis is still raging. “Now they are being kicked while they are down.”
Gail Cartmail, Assistant Secretary-General of the Unite Union, said any pay restrictions for public sector workers would be “offensive” and “simply terribly unfair”.
Dave Prentis, general secretary of the public sector union, Unison, said any new pay cap would be a “cruel bodily blow” to NHS staff not on the front line.
“Leading workers in all public services remain at the heart of the fight against Covid. The government should do what is right next week and announce the pay rise that all staff have more than they have earned.
“Anything less risks destroying morale when the whole country is relying on them.”
Frances O’Grady, Secretary General of the TUC, said: “A pay freeze would be a bitter pill for care workers, rejection collectors, emergency workers and all the key public sector workers who have helped the country go through this pandemic. .
“Freezing their pay is no way to reward key workers for their service. The unions will fight for the right wage increase they have earned. Working people should not bear the burden of the crisis. ”
In Westminster, SNP leader Ian Blackford said reports that Mr Sunak was preparing to “impose another decade of Tory austerity cuts” would “send alarm bells to Scotland and across the UK”.
He stated: “A wage freeze would be a slap in the face to workers who have been on the front lines of the war on the coronavirus crisis. These Tory cuts would threaten Scotland’s recovery and damage the damage that has already been made by an extreme Brexit., which has received more than 4 4 billion from the Scottish economy.
“It’s clear that the Tories have learned absolutely nothing from the last decades of the Westminster cuts, which pushed millions into poverty, undermined public services, tightened living standards and held back the UK economy.”
The MP of Malësia added: “There should be no return to the austerity measures of Tori. Instead the Chancellor should announce a fiscal stimulus of at least 80 80 billion to start a green recovery and a huge increase in funding for our NHS and public services, including a pay rise for workers who have given so much much to fight the coronavirus.
“By holding back investment and blocking the transfer of financial powers, the UK Government has caused thousands of unnecessary job losses and hampered Scotland’s ability to respond to this crisis. The Tories should not even jeopardize Scotland’s recovery. ”
The chancellor is already under fire due to widespread reports that he is preparing to set aside the commitment to spend 0.7% of national income on overseas aid while seeking savings. The Treasury will not comment on reports ahead of the Chancellor’s statement Wednesday.
However, starting the spending review in July, Mr. Sunak warned of the need for “restraint” in future public sector wage solutions.
He said prices made in the review period should take into account the “broader economic context”.
The chancellor also stressed the need for “justice”, stressing that while public sector wages were rising, private sector wages had fallen again during the coronavirus pandemic.
This argument was supported by a new report from the Center for Policy Studies, which said that private sector employees had suffered far more from the economic impact of the disease.
The center-right think-tank said measures were needed to ensure the labor market was not unfairly weighed against the public sector.
She said a three-year wage freeze across the public sector could save up to 23 23 billion, helping close holes in public finances opened by the pandemic.
If the NHS were excluded, the CPS said it could still save 3 15.3 billion over three years.
Otherwise, she said an annual 1% pay limit would save 11. 11.7 billion over the period or 7 7.7 billion if it did not apply to healthcare workers.
CPS Director Robert Colvile said: “The economic impact of the Covid-19 pandemic has been great, but the pain has not been shared equally.
“Health workers aside, it is difficult to justify the generous increase in public sector wages when private sector wages are currently falling.
“At the same time, there is a need to control public spending and reduce the structural deficit which is likely to open up a pandemic.”
Meanwhile official economic figures released this morning by the Office for National Statistics showed that borrowing in October, excluding state-owned banks, was lower than forecast by economists, yet still marked the highest level since October since registrations began. in 1993 and an increase of 10. 10.8 billion year-on-year.
The ONS said borrowing for the first seven months of the financial year was now estimated at 4 214.9 billion, the highest in any April-October period recorded.
This means that the UK’s total debt has reached about 100.8% of gross domestic product – a level not seen since the early 1960s – as the government has spent more than 200 200 billion to support the economy through the pandemic .
Experts said this left the Chancellor facing a difficult balancing act ahead of his review of spending on Wednesday with Brexit also approaching the end of the year.
Mr Sunak stressed that UK public finances would have to be put on a “sustainable path” over time.
He said: “We have provided over 200 200 billion in support to protect the economy, lives and livelihoods from the significant and far-reaching effects of the coronavirus.
“This is the responsible thing to do, but it is also clear that over time it is right we ensure that public finances are put on a sustainable path.”
While borrowing in the financial year so far has been less than forecast by the OBR, it is still thought to be on track to come close to the full financial year forecast of 37 372.2 billion by the end of March 2021.
Samuel Tombs at Pantheon Macroeconomics said: “The borrowing signature is almost entirely attributable to tax bills last year, exceeding his forecast by 1. 71.4 billion due to the higher path to GDP in the second and fourth quarters of third than OBR predicted ”
He added that the borrowing trend would “worsen in the winter and the OBR will not revise its borrowing forecast next week”.
ONS data showed government tax revenue was 39 39.7 billion last month, up 2. 2.7 billion year-on-year after a pandemic of declining VAT, business rates and payroll tax pay as it earns.
Government spending on day-to-day activities rose to. 71.3 billion, up 6. 6.4 billion from a year earlier, including 1.3 1.3 billion in the fund scheme and 300 300 million in self-employment income support scheme payments.
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