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

Sky News has learned that government officials are likely to approve salary increases for all public sector employees, according to political editor Beth Rigby. This decision is anticipated due to worries about potential additional strikes.

Saturday, July 27, 2024, at 5

Sky News reports that officials are likely to approve pay increases for public sector employees that exceed the rate of inflation soon, due to worries about the financial implications of failing to resolve the issue.

Reports indicate that independent pay review panels have suggested to government officials that teachers and nurses should receive a pay rise of approximately 5.5%, a rate that surpasses inflation. This recommendation aims to align their salaries with those 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 workers as soon as next week. This decision comes despite warnings from the Institute for Fiscal Studies that the increase could add an additional £10 billion in costs, over and above the 3% raise that ministers have reportedly already planned for.

On her podcast, Electoral Dysfunction, Rigby mentioned that government insiders expressed concerns over potential repercussions, such as union-led strikes, if they failed to adhere to the pay review bodies' suggestions.

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"She pointed out that it would generate unwanted commotion for a new government, particularly after they heavily criticized the Conservatives for their failure to resolve salary agreements."

A source from Whitehall informed Rigby that they would be "very surprised" if the Treasury were to reject the suggested pay increases, citing potential strikes as a significant risk if the government were to decline the proposal.

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The news arrives as Ms. Reeves is anticipated to disclose a significant deficit in the government's budget, estimated at about £20 billion, in the coming week.

The previous administration faced numerous strikes related to public sector salaries due to rampant inflation triggered by Liz Truss' mini-budget, affecting various sectors including nurses, doctors, teachers, and railway employees.

After negotiations, the government reached agreements with the majority of unions, but junior doctors and certain railway employees are still pushing for improved wages and working conditions.

On Friday, while addressing the media, Ms. Reeves pointed out that failing to resolve a salary disagreement comes with its own expenses, emphasizing the significant financial impact of previous strikes.

"The chancellor emphasized their commitment to resolving the industrial dispute and moving beyond it."

Throughout their election campaign, the Labour Party committed to immediate negotiations upon victory. Following their win, Health Secretary Wes Streeting has initiated talks with the British Medical Association, and Transport Secretary Louise Haigh is currently engaging with the Aslef rail union.

Both Ms. Reeves and Prime Minister Sir Keir Starmer have cautioned about the challenging fiscal situation they've inherited from the Conservative party, noting that it is more dire than initially anticipated.

Next week, Ms. Reeves is scheduled to address parliament with a presentation on the current economic situation and her strategy to address these issues.

At this time, she might also reveal her plans regarding salaries for public sector employees.

As of March, the Office for National Statistics (ONS) reported that the UK had approximately 5.95 million employees in the public sector.

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In a conversation on Sky News' Sunday Morning With Trevor Phillips, Treasury Exchequer Secretary James Murray mentioned he would explain the government's stance considering the current state of public finances and the legacy of public spending.

Alluding to the possibility of agreeing to the 5.5% rate, Mr. Murray stated, "Obviously, there is a cost associated with adhering to the suggestions from the pay review bodies."

"However, failing to reach an agreement carries its own risks, including the potential for strikes. Additionally, there are enduring issues related to hiring and keeping teachers, healthcare workers, police officers, among others. Thus, it's crucial to define our path ahead."

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Mr. Murray stated: "The appropriate procedure involves reviewing the recommendations from the pay review bodies and subsequently formulating our response based on the state of public finances and inherited public spending."

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