Not even one per cent?

Just a month after Cameron’s post-election U-turn on a 10 per cent pay rise for MPs, Tories say public sector workers may not get their 1 per cent pay rise after all.

Public sector workers should not expect to get a 1 per cent pay  rise in this year’s pay round, chief secretary to the Treasury, Greg Hands has told pay review bodies covering 2.5m workers.

He said some workers may get less than 1 per cent, some more, depending on the difficulty of recruiting and keeping workers.

This week, Hands set out the government’s expectation in a letter to the chairs of pay review bodies, despite these bodies being independent of government. The government view is also influential across the public sector for those groups of workers not covered by pay review bodies.

He told the review bodies, “The government expects pay awards to be applied in a targeted manner to support the delivery of public services and to address recruitment and retention pressures…. This may mean that some workers could receive more than 1 per cent while others could receive less; there should not be an expectation that every worker will receive a 1 per cent award.”

U-turn

The move comes a month after Cameron’s post-election U-turn in support of a 10 per cent pay rise for MPs and Chancellor Osborne’s fresh four-year public sector pay cap of 1 per cent. Cameron switched from being against the MP’s pay rise before the general election to supporting it as “the going rate” after the election.

This follows a combined two-year coalition pay freeze starting in 2010, followed by a three-year 1 per cent pay cap which ended in 2015.

It signals the continuance of the worst attack on public sector, with the Retail Price Index – still widely used by the City and in the formula for rail and utility increases– showing inflation running at 1 per cent a year.

The news will be a blow to those public sector workers who may have thought a 1 per cent pay rise at least kept pace with inflation for the first time in many years. The government’s preferred inflation measure, the Consumer Price Index – introduced as part of the first ‘austerity’ budget in 2010 – shows an inflation rate of 0.1 per cent.

Individual government departments will now provide their own evidence to the review bodies which are likely to set out how they want the Treasury proposals put into action.

Barrie Brown, Unite national officer for health said, “The coalition war on the public sector has now become the Tory war on the public sector. Those who assumed they would get the 1 per cent rise Osborne set out a month ago are left with a bitter taste in their mouth.

“As soon as you get ministers talking about ‘targeted’ rises you know they mean everyone gets a poor rise and the others get even less. It also opens the door for further discrimination against women, black and and ethnic minorities who make up a large proportion of the public sector workforce.

“We know from experience that if you give management discretion to target pay rises that there will be discrimination. It can also cause problems in a multi-disciplinary team working environment when one group gets a rise and the other does not.”

Fiona Farmer, Unite national officer for local authorities said: “It’s another kick in the teeth for hard pressed local services. Local government workers are the lowest paid across the public sector and cannot survive a further cut in the value of their pay.

“The government is also threatening to target progression pay in the public sector. This despite the fact that pay points have been the subject of long and detailed negotiations with employers who have agreed the current system.

“It angers us that the government categorise us as ‘essential’ workers when they are demanding bigger ballots and bigger majorities under their proposed trade union legislation. But when it comes to pay rises we’re worth less than 1% and, with job cuts, we’re disposable.”