Unions welcome public sector pay hikes as Hunt accuses Reeves of caving in

Union chiefs have praised Chancellor Rachel Reeves for awarding inflation-busting pay hikes to millions of public sector workers, while her Tory shadow accused her of caving in to trade unions.

Teachers and nurses are set to receive a 5.5% pay boost, armed forces personnel will get a 6% increase, prison service workers 5% and the police 4.75%.

Junior doctors will be given pay hikes of around 20% over two years in a bid to resolve their long-running pay dispute and end strikes.

The TUC union said the Chancellor was “right” to accept in full the recommendations of the independent pay review bodies.

General secretary Paul Nowak said: “Her approach stands in stark contrast to the previous government, who played political games with the pay review bodies.

“I hope this is the crucial first step in dealing with the recruitment and retention crisis blighting our schools and hospitals.

“And it will need to be accompanied by a long-term plan for the public sector workforce.”

The FDA, which represents civil service professionals, said the pay boost of up to 5% for Whitehall officials was the “right decision”.

General secretary Dave Penman said: “For too long we’ve seen pay eroded due to short-term decision-making, with a broken pay system leading to record churn in the civil service and causing a crisis in recruitment and retention across the public sector.

“I appreciate that this announcement comes against a challenging economic backdrop and some departments may have some difficult decisions to make to achieve the efficiencies outlined by the Chancellor, but I welcome that the Government has recognised that public sector pay must be a priority.

“If we want world-class public services then we must invest in the public servants that deliver them, and this announcement is the first step in the right direction.

“There is still significant work to do and the FDA will continue to engage with the Government to improve the pay system so that it properly rewards hard work, attracts the skills and expertise we need, and provides the necessary progression to attract and retain talent.”

Mike Clancy, general secretary of the Prospect union, said the 5% pay rise for civil servants was a “welcome first step”.

“While we welcome the significant improvement in real value, and relative position compared to other public sector workers in the recent past, it remains our view that the pay remit process is flawed and an irretrievably broken process.”

Meeting the 2024-25 pay proposals will cost £9 billion more than the previous Conservative administration had budgeted for.

Ms Reeves said she will ask Government departments to find savings of at least £3 billion to help fund them, including by stopping non-essential spending on consultancy and communications.

But shadow chancellor Jeremy Hunt claimed around half of the £22 billion “fictitious black hole” in the public finances set out by Ms Reeves was due to her deciding to give above-inflation pay rises to public sector workers.

Responding to her Commons statement, the Tory frontbencher said pay awards were discretionary, “in other words, not something she has to do, but something where she has a choice”.

“Was she advised by officials to ask unions to ask for productivity enhancements before accepting above-inflation pay awards to help pay for those awards as the last government did?

“And if she was advised to do that, why did she reject that advice and simply tell the unions, ‘here’s the money, thanks for your support’?”

He later said: “She’s caved into the unions on pay, left welfare reform out of the King’s Speech, soft-pedalled on our productivity programme, and that is a choice, not a necessity.”

Paul Johnson, director of the influential IFS think tank, noted that “half of spending ‘hole’ is public pay over which govt made a choice and where pressures were known”.