Public sector workers’ pay has dipped below that of their private sector counterparts for the first time since the financial crash, Treasury figures obtained by the GMB union reveal.
The disparity, after seven years of austerity and cuts to public spending, will pile pressure on the chancellor, Philip Hammond, to abandon the public sector pay cap in next month’s budget. The analysis of hourly earnings shows that last year public sector workers were paid 0.6% less than private sector colleagues in similar jobs. By comparison, they enjoyed a premium of 3.1% compared with the private sector in 2005, rising to 5.8% in 2010.
Last month, Hammond announced a partial lifting of the 1% pay cap, affecting only the police and prison officers. The new figures will lead to more calls for the cap to be abandoned altogether in the budget, which is being billed as make or break for the chancellor after the party’s disastrous performance in last June’s general election. Protest marches by public sector workers calling for the pay cap to be lifted have taken place across the country this autumn.
On Saturday night the GMB claimed the Treasury had repeatedly refused to release the information until it officially complained and threatened to refer the matter to the Information Commissioner’s Office. The chief secretary to the Treasury, Liz Truss, refused to release the updated analysis when challenged in parliament.
Rehana Azam, the GMB’s national secretary for public services, said the Treasury estimates “kicked away the last prop” behind the government’s policy of enforcing real-terms public sector pay cuts, and disproved Hammond’s reported claim in a July cabinet meeting that public sector workers are overpaid. Azam said: “It’s no wonder that ministers fought tooth and nail to cover up these damning figures. The Tories can never again claim that public sector workers are ‘overpaid’ when the Treasury’s own assessment proves otherwise.”
The chancellor maintains public sector workers are still better off than their private sector colleagues because they benefit from higher employer pension contributions. But the GMB said its analysis shows that they also pay in significantly more through employee contributions. Three in five public sector workers pay in at least 6% of earnings on average, compared with one in seven private sector workers. Research suggests that when private sector wages outstrip those in the public sector, hospital fatality rates rise and schools’ GCSE results decline.
In the summer the Observer reported that the health secretary, Jeremy Hunt, and the education secretary, Justine Greening, had lobbied for an easing of austerity, while several senior Conservative MPs had warned that public services would be in growing peril without an urgent loosening of the purse strings.
External pressures are adding to the chancellor’s difficulties. Inflation hit 3% last week, while most public sector wages remain capped at 1%. Azam said: “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. Enough is enough. In the budget the chancellor must announce the fully-funded, above-inflation pay rises that public sector workers need and so desperately deserve.”
A Treasury spokesman disputed the GMB’s claim that it had deliberately withheld the analysis. “There was no delay in releasing the information,” a spokesman said. “We answered the original response promptly, and when the questioner asked for an internal review we looked carefully at it, and released further information as requested within the timing guidelines set out in the FOI code.
“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.”