May to use final leadership days to give public sector staff £2bn pay rise

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The move will reportedly see two million workers receive above-inflation salary increases.

Public sector workers including teachers and police officers are to be given a £2 billion pay rise, it has been reported.

The Treasury will unveil the biggest public sector pay rise for six years on Monday before Theresa May’s tenure as Prime Minister comes to an end, according to The Times.

Two million workers will receive above-inflation salary increases, the paper said, amid concerns the private sector is pushing ahead on pay.

Annual increase in employees’ full-time earnings
(PA Graphics)

The Treasury is expected to say that, barring some extra funding for schools, the money will have to come from existing budgets.

Public sector pay rises were capped at 1% after the Conservative-led coalition came to power in 2010, but the cap was scrapped last year.

Theresa May
The announcement is set to be one of Theresa May’s last acts as PM (Henry Nicholls/PA)

Jonathan Cribb, a senior research economist at the Institute for Fiscal Studies, told the paper: “These public sector pay rises are higher than last year’s and considerably higher than the 1% for many years before that.


“It is the highest nominal pay increase since the coalition. But these increases are still slower than pay rises that are happening on average in the private sector.

“With the partial exception of schools, there seems to be no new money to fund these pay rises, meaning savings will have to be made elsewhere.”

The announcement will come during Mrs May’s last days in office, with either Boris Johnson or Jeremy Hunt taking over the top job.


During the leadership contest, frontrunner Mr Johnson refused to commit to a pay rise for public sector workers despite an apparent policy pledge by one of his key backers.

Health Secretary Matt Hancock had said the public sector would be “shown some love” if Mr Johnson won, but the former foreign secretary made no spending pledge.

“Of course he’s right, we are going to make sure that we properly fund our public services,” Mr Johnson said.

“It’s very important when you’re in charge of a great public service, whether it’s the police or transport, you’ve got to make sure – or local government – you’ve got to make sure that you understand their cares and their needs.”

But shadow chancellor John McDonnell was critical of the raise after years of austerity.

“With overall wage growth at 3.4%, it looks like Philip Hammond’s final act as Chancellor will be this insulting pay offer set to push public sector workers further behind,” the Labour MP said.

“After years of holding back the pay of our dedicated public sector workers, it is shameful for the Government to pay for ending the public sector pay cap with more cuts.”

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