Public sector pay below private sector for first time since before 2008 crisis

Public sector wages have dipped below those in the private sector for the first time since before the financial crisis, new Treasury figures reveal.

Data obtained by the GMB trade union shows workers in the public sector were paid on average 0.6% less than their private sector counterparts in similar positions.

This is the first time the records, stretching back to 2005, show public sector workers as being worse off.

In 2010, the Treasury estimated they were 5.8% better paid than those in comparable roles in the private sector.

Rehana Azam, GMB national secretary for public services, said: “The Tories can never again claim that public sector workers are ‘overpaid’ when the Treasury’s own assessment proves otherwise.

“The average local government worker earns about £20,000 while teaching assistants are paid just £12,000, and all public sector workers have lost thousands due to a planned decade of real-terms pay cuts.

“It’s shameful that in one of the world’s richest nations some of our public sector heroes are forced to take on debt or use food banks to make ends meet.

“GMB’s members are performing miracles every day, but the goodwill is at breaking point and if public services can’t retain their staff then patients’ lives will be put at risk.”

The GMB is now calling on Philip Hammond to bring in above-inflation pay rises for public sector workers at next month’s Budget.

Mr Hammond has already announced a partial lifting of the 1% public sector pay cap, affecting only the police and prison officers.

Health Secretary Jeremy Hunt suggested earlier this month that the pay cap had been scrapped for NHS workers, but that negotiating future pay rises “is partly linked to productivity improvements that we will negotiate at the same time”.

Ms Azam also accused ministers of “an attempted cover-up” over the statistics, claims which are denied by the Treasury.

Liz Truss, the Chief Secretary to the Treasury, said in a written parliamentary answer earlier this month that there is a public sector pay premium of around 10% including pension contributions.

Excluding employer pension contributions, Ms Truss said “public and private sector pay is, on average, now around the same level”.

GMB’s analysis found that public sector workers pay significantly more into their pensions compared with those in the private sector.

Three in five public sector workers pay in at least 6% of earnings on average, compared with one in seven private sector workers.

A Treasury spokeswoman said: “Salaries in the public sector are now broadly comparable to those in the private sector after running ahead of the private sector for many years.

“Many public sector workers benefit from generous pension entitlements, giving around a 10% premium in many cases.

“We have confirmed the across-the-board 1% public sector pay policy has been lifted and the independent pay review bodies will report their recommendations in spring 2018.”