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20 July 2022

Why public sector pay rises are actually cuts

Higher inflation cancels out offers for nurses, doctors, teachers and dentists.

Yesterday (19 July) the British government announced a series of pay offers covering around two and a half million public sector workers, including teachers, nurses, doctors, police officers and members of the armed forces.

On Wednesday the Office for National Statistics reported a 40-year high in consumer price inflation, with prices rising 9.4 per cent over the year to June. This means that all of the government’s public sector pay offers are effectively pay cuts once adjusted for inflation.

A pay rise of 5 per cent for teachers and police officers instead becomes a cut of 4 per cent, while doctors and dentists will see their 4.5 per cent raise turn into a real-terms cut of 4.5 per cent. Junior doctors, who are signed up to a multi-year pay deal agreed before the pandemic of 2 per cent a year, will effectively have their pay cut by 6.8 per cent.

Ministers had admitted that the pay offers would not be in line with inflation, arguing that if they were they would only make inflation worse. In response, unions have threatened further industrial action.

Kevin Courtney, joint general secretary of the National Education Union, said: "Given this very poor pay proposal, we will look towards consulting our members in the autumn. This will be the largest ballot of teachers for a generation.   

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"We want James Cleverly [the Education Secretary] to engage with us directly and negotiate. We remain ready and stand ready to do that. But if it continues on this course into September, we will have no hesitation in recommending that our members take action." 

Philip Banfield, chairman of the British Medical Association council, said the offers represented a “brutal pay cut that will come as a bitter blow for doctors across England”.

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[See also: Stop telling people not to ask for a pay increase]