UK cabinet ministers approved recommendations for public sector pay rises, a person familiar with the matter said, as Prime Minister Rishi Sunak tries to draw a line under a year-long battle with labor unions.
(Bloomberg) — UK cabinet ministers approved recommendations for public sector pay rises, a person familiar with the matter said, as Prime Minister Rishi Sunak tries to draw a line under a year-long battle with labor unions.
A cabinet committee signed off on a plan based on recommendations from pay review bodies on Thursday morning, said the person, who requested anonymity because the decision isn’t yet public. Those bodies have advised increasing pay for staff including police officers, teachers and doctors by 5%-6.5%, the Times has previously reported.
The decision to accept the proposals heads off one potential argument with labor unions, after ministers had repeatedly warned that the government wouldn’t necessarily do so as it prioritizes the fight against inflation. But the government also risks a fresh row after Chancellor of the Exchequer Jeremy Hunt ruled out extra borrowing to fund the increases — a move that threatens further cutbacks to services already stretched to the point of crisis.
“If you fund any public sector pay rise by increasing borrowing that year, that pumps billions of pounds of extra money into the economy,” Hunt told ITV’s Peston program on Wednesday.
With a general election expected next year, polls show voters blame the ruling Conservatives for the erosion of public services on their watch, leaving the ruling party facing a double-digit deficit to the opposition Labour Party in most surveys. Sunak and Hunt are calculating that if they can get inflation down — it’s currently running at 8.7% — they can still try to campaign on their economic record.
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