Return to austerity?

Gov’t accused of hypocrisy after chancellor urges public sector pay ‘restraint’ and warns of cuts to come

Reading time: 7 min

This week’s public sector pay announcement – where less than a fifth of public sector workers were granted a pay rise – was followed almost immediately by the government warning of continued austerity.

While only a fraction of public sector workers were given pay rises of up to 3.1 per cent, including doctors, teachers, prison guards, armed forces staff and a few others, the announcement on Tuesday (June 21) raised hopes that there may be more pay rises for a wider swathe of public sector workers in the months to come.

But those hopes were dashed after it was revealed that chancellor Rishi Sunak quietly sent a letter to the heads of government departments warning that future pay rises may be off the table.

The letter read, “Furthermore, this financial year’s public-sector pay awards will be significantly more than the average in the private sector… therefore for reasons of fairness, we must exercise restraint in future public-sector pay rewards. Departments’ pay modelling should reflect this fairness.”

The letter also warned of ‘tough choices’ to be made on various budgets, prompting fears of a return to austerity.

‘Mixed messages’

Sunak was widely criticised by unions and others, with TUC general secretary Frances O’Grady noting, “It’s hard to see how public sector workers can trust ministers after this cynical ploy to disguise plans for more pay restraint.

“In the last decade, we learned the hard way that austerity and pay restraint slow down recovery. People have less to spend. Businesses have fewer customers. And it holds back growth,” she added.

“If ministers take this failed approach again, the living standards of both public and private sector workers will take a hit. And the key workers who saw us through the pandemic will be denied the pay rises they have earned. That’s no way to thank key workers.

“The prime minister promised no austerity after the pandemic. We need a recovery plan based on decent jobs with fair pay.”

Indeed, just over three weeks ago, prime minister Boris Johnson said ahead of a major speech, in which he invoked the spirit of former US President Franklin D. Roosevelt, that there would be no return to austerity.

“But in the end what you can‘t do at this moment is go back to what people called austerity… I think that would be a mistake,” he said in an interview with the Radio Times.

Johnson subsequently said in his speech that austerity was not an option, noting that the government wouldn’t “cheese pare our way out of trouble” and that “the world had moved on since 2008”.

Labour’s shadow chancellor Anneliese Dodds today (July 22) wrote to the chancellor, highlighting the hypocrisy of a government claiming austerity was over, only for the chancellor to quietly warn of future public sector pay restraint and potential budget cuts.

She criticised the government’s “mixed messages”, noting in her letter, “On Monday you announced that some would be receiving a pay rise and yet yesterday morning you spoke of ‘restraint’ and the prospect of cuts to come. This is not the right way to treat those who have contributed so significantly to tackling the coronavirus, often at great personal risk.”

Early pay rise call for NHS staff

More than a million NHS workers were left out of this week’s pay rise announcement, including nurses, paramedics, porters, cleaners and others who have risked their lives amid the pandemic.

These heroes are now left to wait for a pay rise because they are part of the Agenda for Change agreement – a three-year NHS pay deal struck in 2018 and due to expire in 2021. While the government indicated it will review this pay deal, no firm dates have been set.

A growing number of mostly Labour MPs are now calling for NHS staff to receive an early pay rise in an Early Day Motion (EDM) supported by health unions including Unite.

The EDM, tabled on Monday (July 20) praises the “extraordinary commitment and sacrifice of NHS staff throughout the covid-19 outbreak” and notes that because NHS staff must wait until 2021 for their next pay rise despite “having gone above and beyond” during the pandemic, the government must “show its support for the NHS by turning warm words and applause into a firm commitment to bring forward NHS pay talks and to fund an early and meaningful pay rise”.

So far, more than two dozen MPs have signed the EDM – you can read a full list of the signatories, as well as the text of the EDM, here.

Care and council workers left out

Others left out of this week’s public sector pay rise include care workers – a huge majority of whom work for private companies – as well as local authority workers, who are now being balloted on whether to accept a measly pay offer but forward by local authority employers before the pandemic started. This pay offer amounts to an increase of less than £2 a day on average for the lowest-paid.

Unite assistant general secretary Gail Cartmail highlighted the plight of care workers in an interview with BBC Radio Manchester on Wednesday (July 22).

“Care workers will miss out – care workers in the private have no pay award promised, which is incredible actually because they’re the people who held our loved ones hands and looked after their intimate needs and have been let down by our government,” she said.

“They haven’t had the protective clothing that they should have had and they have been unfairly exposed to this virus. They will get nothing. We stood on our doorsteps and applauded these workers – rightly so. But they deserve much better.”

Unite has also called on local authority workers, including refuse workers, school staff, cemetery workers and many others, who have also risked their lives amid the pandemic, to be properly rewarded for their efforts.

Unite national officer for local government Jim Kennedy called these essential council workers “the glue that keeps services for local communities running on a daily basis through good times and bad”.

Highlighting that local government employers are offering a pay increase of only £1.83 a day for the lowest paid workers, against a backdrop of ten years of real-terms pay cuts, Kennedy called on the government to act.

“We know the public is appreciative and supportive of our frontline workforce,” he said.  “Unfortunately, neither Rishi Sunak nor the local government employers are mirroring public opinion.

 “If the government is serious about ‘levelling up’ society, the chancellor needs to find the money to fund a decent pay rise for council workers.”

By Hajera Blagg

Related Articles