Public sector workers 'thousands of pounds worse off since austerity'

17 Jul 17

Public sector workers are thousands of pounds worse off since austerity was introduced in 2010, the TUC claimed in a report released today.

This comes as chancellor Philip Hammond faced a backlash after a cabinet source reportedly told The Sunday Times he had said public sector workers were “overpaid”.

Although, a Treasury spokesman has since said: “The chancellor was describing the public sector pension premium. He did not say that public sector workers were overpaid.”

Figures from the TUC report showed the average fall in wage since austerity began of:

  • Prison officers, paramedics and NHS dieticians as more than £3,800 a year.
  • Firefighters as nearly £2,900,
  • Teachers as about £2,500.

The average pay for an NHS paramedic was now £35,577, the figures showed, which analysed pay between 2010 and 2017 and were adjusted for CPI inflation.

If paramedics’ salaries in 2010 kept pace with inflation measured by CPI, they would be earning £39,435 - £3,888 more.

TUC general secretary Frances O'Grady said: “It's been seven long years of pay cuts for our public servants. And ministers still won't tell us if relief is on the way.”

Hammond had urged the government not to increase public sector pay beyond the planned 1% pay rise, the Sunday Times reported yesterday. 

He was quoted as saying, at cabinet meeting on Tuesday last week: “Public sector workers are overpaid when you take into account pensions.”

Train drivers were “ludicrously overpaid”, the chancellor is believed to have said.

The source said the comments “caused some general astonishment”.

“His overall tone was that we shouldn't give them more cash because they are overpaid" they added. 

“Later in the meeting both Boris Johnson and the PM said we should not say public sector workers are overpaid.”

A number of public sector unions have come out strongly to rebuff the chancellor’s alleged comments.

Unison’s assistant general secretary Christina McAnea called the remarks “offensive” and accused Hammond as being “completely out of touch”.

In recent weeks a number of Conservative MPs have broken ranks and called for a rethink on the public sector pay cap.

This follows the release of official figures which show inflation has hit 2.9%, outstripping the 1% pay rise, leaving public sector workers with a real-terms pay cut.

On Andrew Marr’s BBC show on Sunday, Hammond refused to comment on whether he had said public sector employees were overpaid but defended his positon saying public sector pay had “raced ahead” of the private sector after the economic crash in 2008.

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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