A million public sector workers will get a pay rise as the Chancellor today announces bumper increases for the armed forces, teachers, doctors, dentists, prison officers and the police.
Philip Hammond will confirm the 1 per cent pay cap – which has limited annual rises for six years – has been abandoned.
The pay deals will vary across the workforce but a Government source last night told the Mail that the rises would be ‘much better than the 1 per cent everyone is used to’.
It is believed the rise could be somewhere between 1.5 and 3.5 per cent for many roles such as teachers, police officers and doctors.
Bumper increases: Chancellor Philip Hammond is set to announce a pay rise for a million public sector workers
Whitehall departments have been told they are allowed to spend more of their budgets on pay. However, there will be no new money to fund additional increases, meaning any extra pay rises will have to come from efficiency savings or cuts to services.
The raft of pay rises, which will be announced in the Commons today, comes after nurses were told in March they would get a 6.5 per cent increase over three years.
However union bosses are expected to scoff at the rise, who want as much as 5 per cent to make up for the cash lost from the six-year cap, The Sun reported.
Pay review bodies for each workforce have drawn up the recommendations after looking at variables including the turnover of staff. The announcement will prove popular with public sector workers who have long complained about the cap, but there will be concerns about how the rises will be paid for.
Unions are likely to still warn the increases are not enough. The rise for doctors will mean that millions of pounds from the £20billion NHS funding boost – announced last month to mark the Health Service’s 70th anniversary – will go on staffing.
This will dismay many members of the public who had hoped the Government’s extra money would go towards frontline care. A senior GP earns on average £100,000 a year while hospital consultants are typically on £92,000 – which excludes overtime and performance bonuses.
Public sector pay restraint has played a key role in the Government’s efforts to clear Britain’s huge budget deficit.
Philip Hammond will confirm the 1 per cent pay cap – which has limited annual rises for six years – has been abandoned
It became a major issue at last year’s general election when Theresa May was challenged by a cash-strapped nurse during a live TV debate. Earlier this year, Mr Hammond signalled the end of austerity ahead of his Spring Statement when he declared: ‘There is light at the end of the tunnel because what we are about to see is debt starting to fall after it’s been growing for 17 continuous years.’
However, the Office for Budget Responsibility last week warned austerity may have to continue for at least another 50 years to bring the nation’s finances under control.
It said debt will become unsustainable without tax rises or further cuts to spending. It blamed some of the pressure on Mrs May’s £20billion NHS boost as well as rising state pension costs and the ageing population – which will require more spending on care.
The OBR said: ‘On current policy we would expect the budget deficit to widen significantly over the long term, putting public sector debt on a rising trajectory. This would not be sustainable.’
In a stark 168-page report, the watchdog said the public finances were in a perilous position and urged ministers to consider carefully any further commitments.
Meanwhile, a report yesterday found that the country’s tax burden has reached its highest level for almost half a century.
The taxman is set to take £724.9billion this year – 34.3 per cent of GDP. That is the highest proportion since 1969-70, when the country was run by a Labour Government under Harold Wilson.
The report, written by the TaxPayers’ Alliance campaign group, also said overall Government revenues are at a 32-year high at 37 per cent of GDP, a measure of the size of the economy.
In total, the Government will raise £775.8billion – which is equivalent to around £28,000 from every household, according to the study.
The research also found that new taxes have hit poorer households the hardest. The bottom 10 per cent of earners in Britain pay 49.5 per cent of their income in tax.