TORY CHANCELLOR Philip Hammond has promised to stick to the widely discredit “austerity” strategy of the last government and to keep cutting back on the pay of public sector workers.
Speaking to Andrew Marr on the BBC’s Sunday Politics show, Hammond claimed that public sector workers had received higher pay rises than private sector workers since the global economic crash of 2008 – so they did not deserve pay rises now. He admitted that the gap between public and private sector pay had now closed, but he said that public sector workers received more generous pensions which made up for their lower take home pay today.
Labour spokespeople pointed out that the public sector pay cap of 1% which the Tory Government imposed in 2013, which came after the Coalition Government imposed a public sector pay freeze, is in effect a pay cut. This is because inflation has been higher than 1% – so public sector workers have seen the value of their pay cut for a decade.
Labour believes this value should be restored and in their Manifesto issued during the recent General Election the Party promised to put £4 billion aside to fund pay rises to begin that process. Labour argued that modest increases in the pay of public sector workers would increase domestic consumer spending – safeguarding jobs and pay in the private sector and allowing for increases to take effect soon.
Chancellor Hammond argued that other Cabinet Members should stick to their own jobs and should not speak out or brief the press in secret against the public sector pay cap. He alleged that some Cabinet members were trying to undermine him because they disagreed with his policies on Brexit. He did not explain how he was going to be able to stimulate the economy if the public sector pay cap remained.