It will not borrow more to cover the extra £3bn it needs to fund the rises. Today the government accepted the recommendations of all the independent pay review bodies and agreed to award millions of public sector workers, including police officers and teachers, 5-7% pay rises. The former has greater potential to drive up inflation because it pumps extra money into the economy. The inflationary impact of public sector pay rises depends on how they are funded - whether through extra borrowing or by finding savings in existing budgets. Actually what I think they want to know is that the government is committed to easing the burden on their cost of living."īusiness correspondent the outset the government has pushed back against awarding chunky pay rises to public sector workers, arguing that doing so could fuel inflation. The current level of CPI inflation is running at 8.7% and Mr Sunak is seeking to avoid pay increases that could fuel a wage-price spiral.Īsked what level inflation would have to fall to reach his target, Mr Sunak told the press conference: "Do I think that everyone sitting at home is focusing on whether inflation goes down to 5.2%, 5.4% or 5.3%? Mr Sunak was repeatedly asked about concerns that the pay rises could fuel inflation - contrary to the promise he made to halve inflation by the end of the year. He said the independent pay review body process "has been accepted as the best, fair way, that we have in this country to find resolution on public sector pay". Members of the British Medical Association (BMA) want their pay to be raised by about 35% - a figure Health Secretary Steve Barclay has described as "not fair or reasonable".Īsked about whether the 6% pay rise for junior doctors could be considered "fair" given it is considerably less than the 35% they are asking for, Mr Sunak said they would also receive an additional consolidated £1,250 increase". The prime minister's announcements come as junior doctors kick off the longest strike in NHS history, with young medics walking out from 7am today and returning on Tuesday. Mr Sunak said the move would raise over £1bn. The UK will charge migrants more to access the NHS to pay for public sector pay rises, says the health secretary. He confirmed the pay awards were not going to be funded by increased borrowing or higher taxes but through other avenues - including an increase to the charge migrants have to pay when they apply for visas and to the immigration health surcharge, the levy migrants have to pay to access the NHS. Giving a press conference shortly after the offers were unveiled, the prime minister said they were "final" and "one of the most significant" pay awards in decades - costing "billions of pounds more than the government had budgeted for". "This deal will allow teachers and school leaders to call off strike action and resume normal relations with the government."' "The government will also provide a hardship fund of up to £40m to support those schools facing the greatest financial challenges. "The government has committed that all schools will receive additional funding above what was proposed in March - building on the additional £2bn given to schools in the Autumn Statement.
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