Government Poised to Approve Significant Pay Rises for Public Sector Workers Amid Industrial Action Concerns

Sources indicate that government officials are likely to sanction salary increases for all public sector employees, according to Sky News. Political editor Beth Rigby reports that this decision is anticipated due to worries about potential continued strikes.

Saturday, July 27, 2024, 5:

Sky News has learned that in the next few days, the government is likely to approve pay increases for public sector employees that exceed the rate of inflation, due to worries about the financial implications of failing to reach an agreement.

Reports indicate that independent pay review panels have suggested to government officials that teachers and nurses should receive a pay raise of approximately 5.5%, which is above the current rate of inflation. This recommendation aims to align their salaries with the rising wages seen in the private sector.

Sky News' political correspondent Beth Rigby has learned that Chancellor Rachel Reeves is expected to approve the independent recommendations for a salary increase for all public sector employees as soon as next week. This is despite warnings from the Institute for Fiscal Studies that this could add an additional £10 billion in costs beyond the 3% increase that ministers have reportedly already planned for.

During her "Electoral Dysfunction" podcast, Rigby mentioned that government insiders expressed concerns about potential repercussions, such as union-led strikes, if they failed to accept the suggestions from the pay review bodies.

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"She mentioned that there would be significant uproar regarding a new government they are opposed to, particularly after they heavily criticized the Conservatives for their failure to resolve salary negotiations."

A source from Whitehall informed Rigby that they would be "very surprised" if the Treasury rejects the suggested pay increases, considering the potential for industrial strikes if the government declines the proposal.

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Ms. Reeves is anticipated to disclose a deficit in the public finances estimated at approximately £20 billion in the coming week.

The previous administration faced numerous strikes concerning wages in the public sector, triggered by rampant inflation after Liz Truss' mini-budget. This affected various professionals including nurses, doctors, teachers, and railway staff, who all participated in the walkouts.

After negotiations, government officials reached agreements with the majority of the unions, however, junior doctors and certain railway employees are still advocating for improved salaries and work conditions.

During a discussion with media outlets on Friday, Ms. Reeves pointed out that failing to resolve a salary disagreement carries its own expenses, emphasizing the substantial costs associated with previous strikes.

"The chancellor expressed a desire to resolve the industrial dispute and put it behind them."

Throughout the election campaign, the Labour Party committed to immediate negotiations should they emerge victorious. Following their win, Health Secretary Wes Streeting has commenced discussions with the British Medical Association, and Transport Secretary Louise Haigh is currently engaged in talks with the Aslef rail union.

Both Ms. Reeves and Prime Minister Sir Keir Starmer have highlighted the challenging "legacy" left by the Conservatives, indicating that the state of public finances is more dire than initially anticipated.

Next week, Ms. Reeves is scheduled to address parliament, where she will discuss the current economic situation and her strategies for addressing it.

This could be the moment she reveals her plans regarding salaries for public sector workers.

According to data from the Office for National Statistics, as of March, the UK public sector employed approximately 5.95 million individuals.

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During an interview on Sky News' Sunday Morning With Trevor Phillips, James Murray, the Exchequer Secretary to the Treasury, stated that he would clarify the government's stance considering the current state of public finances and the legacy of public spending they've inherited.

Alluding to the possibility of agreeing to the 5.5% rate, Mr. Murray stated, "It's evident that there is a definite cost involved in responding to the suggestions from the pay review bodies."

"However, failing to reach an agreement carries its own risks, including the potential for strikes. There are also ongoing challenges related to attracting and keeping teachers, NHS staff, police officers, and others. Therefore, it's crucial that we outline our plan moving forward."

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Mr. Murray noted: "The appropriate procedure involves reviewing the suggestions from the pay review bodies and subsequently formulating our response based on the current state of public finances and inherited budgetary policies."

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