MILLIONS of Brits will have to swallow a real-terms pay cut as inflation-matching pay rises were ruled out by a minister today.
Transport Secretary Mark Harper told Sky News that raising public sector pay in line with inflation was “unaffordable”.
2
He said: “I think we want to try and give all the workers in the public sector who work very hard decent pay rises, but they can’t be inflation-busting pay rises.
“There simply isn’t the money to pay for those given the context, we haven’t seen those in the private sector either, the private sector pay rises have generally been settled below the level of inflation, which I accept is difficult for people.”
Asked about the lack of public sector pay rises in comparison with the maintenance of the triple lock, which will see all pensioners’ payments rise with inflation, Mr Harper said that pensioners should be protected as they were not able to “increase their hours or income”.
It comes as members of a number of public sector unions have voted to strike over pay and conditions.
The Royal College of Nursing voted to strike for the first time in its history and is demanding a 19% inflation-busting pay rise.
Rail passengers also face strikes before Christmas, though rail union boss Mick Lynch has ruled out strikes directly within the Christmas period between mid-December and early January.
Inflation currently stands at about 11%.
While some public sector workers have seen pay rises, these have often been below the rate of inflation making them a real-terms pay cut.
Most read in Money
Unions say that pay offers from the government and rail companies are not sufficient amid a cost of living crisis.
However, the government argue that raising pay in line with inflation will actually make inflation worse by creating a wage-price spiral.
This is when pay increases cause an increase in the supply of money in the economy, which fuels more inflation.
Chancellor Jeremy Hunt set out measures to reduce inflation and help with the cost of living in his Autumn Statement on November 17.
This included direct payments to those on Universal Credit and pensioners to support them with spiraling bills.
2
This post first appeared on thesun.co.uk
