Counselor, Rishi Sunak, prepares to announce renewed pressure on public sector salaries in next week’s government spending review in response to the economic shock of the coronavirus pandemic.
Government sources said an announcement of a wage restriction would be part of the mini-budget on Wednesday, as part of plans to launch a Whitehall savings campaign to address record levels of government borrowing incurred during the crisis..
The new round of belt-tightening of public officials – many of whom have been at the forefront of the government’s response to the pandemic – will likely contrast sharply with Boris Johnson’s generous four-year settlement of the Armed Forces.
The Prime Minister told the House of Commons on Thursday that he wants the United Kingdom to be the leading naval power in Europe, and said the budget increase will help provide the Ministry of Defense with swarms of drones and « directed energy weapons ».
Meanwhile, Johnson has repeatedly refused to confirm whether the government will stick with its statement commitment to keeping foreign aid spending on the world’s poorest people at 0. 7% of the national income.
Leaders of nearly 200 charities have written to the prime minister urging him to abandon a plan to reduce the target to zero.. 5%.
With the prime minister committing to spending in key areas including defense and green technology, Sunak has been scouring the budget for potential savings..
In an argument reminiscent of a wage freeze in the era of austerity imposed by conservatives after the 2008 financial crisis, Sunak is expected to argue that public sector profits should align with the private sector, as wages have come under severe pressure as the British economy faces the deepest recession in history.
It is understood that NHS personnel, including doctors and nurses, will be exempt from a period of renewed restraint to avoid sparking a public backlash as a result of the forward role healthcare workers have played during the pandemic.
However, unions have warned that a renewed wage freeze elsewhere will still be a blow to the teeth for employees after Boris Johnson promises to end austerity ahead of the 2019 elections, and with millions of key workers continuing to keep the country undergoing a health emergency.
Frances O’Grady, Secretary General of TUC, said: “Freezing their salaries is not a way to reward key workers for their service.. The unions would fight to increase the appropriate wages they received. The workers should not bear the brunt of the crisis.
Dave Prentice, Secretary-General of Unison, said key public sector workers are still at the center of the battle against COVID. The government should do the right thing next week and announce more than one wage increase that employees have earned. Anything less than that risks ruining morale when the entire country depends on them.
The imminent launch of the chancellor’s savings campaign comes as government spending rises in response to the pandemic, with more than £ 40 billion spent supporting wages of up to 9. 6 million workers through the vacation scheme. Extending the wage subsidy plan until the end of March is expected to cost billions of pounds, in addition to more than 210 billion pounds spent on the government’s emergency response to Covid since the start of the pandemic..
Official figures due to be published alongside a review of spending by the Office of Budget Responsibility, the government economist, are expected to show an increase in borrowing to more than £ 400 billion this year as the economic fallout from the crisis has led to losses..
With spending to cushion the economic blow, and tax receipts collapsing from the cliff as lockdown restrictions put business into a severe standstill, this will represent a budget deficit of more than twice the size of that output due to the 2008 financial crisis.
The government spends more than £ 200 billion a year employing more than $ 5 billion. 4 million people work in jobs across the public sector, the majority of whom work in education and health.
Sources said that the Treasury Department is expected to shed light on official figures that show that public sector workers benefited from a 7% « initial wage premium » over their private sector counterparts last year..
It is believed that Sunak considers the analysis from the Office for National Statistics to be important because it highlights that the average worker’s income in the public sector exceeds his income in the private sector even after accounting for personal characteristics, type of job and skills..
However, research from the Institute for Financial Studies shows that public sector salaries are 1. 5% lower than in 2010 after inflation, and among the lowest levels of private sector revenue in decades. She said this may have exacerbated the difficulties in recruiting workers and retaining existing employees.
The basis for a three-year public-sector wage freeze that Sunak can consider was made clear in a report published by the Center for Policy Studies, a right-wing think tank, in a report Friday.
Bringing up the issue of wage restraint in the public sector, CPS said that up to £ 23 billion could be saved through a three-year wage freeze for workers. She said the option to allow wages to grow at just 1% a year – similar to the policy pursued by George Osborne as part of the austerity-era cuts to Whitehall budgets – would save more than £ 11 billion.. .
CPS Director Robert Colville was among the lead authors of the 2019 Conservative Statement. CPS also called on the government recently to drop its pledge to raise the minimum wage and scrap the triple lock on pensions, which could also appear in the spending review.. .
Employee representatives have warned that a wage freeze will have a detrimental effect on government plans to appoint thousands of employees to key roles in the public sector after mass displacement over the past decade of austerity if new restrictions are widespread..
Kevin Courtney, joint national secretary for the National Education Association, said the government has committed to raising primary teachers’ salaries to more than £ 30,000 a year by 2022. « We would be very concerned if there was a turn away from this position. It would be completely unreasonable. They were doing this because of problems with recruiting teachers, and these problems will return with revenge after the epidemic. « . .
Rehana Azzam, the national secretary of the GMB Trade Union, said plans to impose wage restrictions to balance the books will come as millions of pounds are paid to companies with close ties to government ministers.
“Billions are being wasted, pouring from their closets into their friends’ pockets. Some people are taking advantage of the pandemic while our workers are working throughout its outbreak.
“It is a dangerous area for the chancellor if he imposes restrictions on payment as a way to offset the cost of the pandemic. We did not go through it, we are still in it. Does he really want to do this when people’s morale is so low. When people lost loved ones and the people they worked with, is it now time to kick them some more? I don’t think it will go down well.
Public sector, Rishi Sunak, Corona virus, wages
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