We cannot tolerate ‘wildly excessive’ public sector pay claims, Clarke says

Chief secretary to the Treasury says Cabinet colleagues will have to ‘stick within’ their spending review settlements.

25 June 2022

The Chief Secretary to the Treasury has said public sector workers should expect wage rises of around 3%, as he warned the Government cannot tolerate “wildly excessive” pay claims.

Simon Clarke said Cabinet colleagues will have to show “real discipline and ingenuity” in ensuring they “stick within” their spending review settlements, with no allowance for inflation in the reserve.

He said chasing double-digit numbers would be “directly against the interest” of doctors and nurses, as it would lead to a world where “we would very quickly lose control of spending discipline”.

It comes after Health Secretary Sajid Javid said NHS staff deserve “fair” pay with soaring costs taken into account.

He told BBC Radio 4’s PM programme: “This year’s pay rise, I can’t tell you right now what it’s going to be, but what I can tell you is that we will listen carefully to the independent pay review body, which by the way, rightly also, as well as inflation, takes into account retention and many other sensible factors.”

Sajid Javid
Health Secretary Sajid Javid said NHS staff deserve ‘fair’ pay with soaring costs taken into account (James Manning/PA)

Mr Clarke revealed the Government assumed funding for public sector pay rises of 3% in its autumn spending review, according to The Times, although this came prior to a huge inflation hike driven in part by Russia’s invasion of Ukraine.

In an interview with the newspaper, the Treasury minister was cited as saying public sector workers should expect rises around the 3% mark.

This is despite several unions calling for a pay increase at or above inflation, which on Wednesday was estimated to hit 9.1% on the CPI measure and 11.7% for RPI.

Mr Clarke told The Times: “Cabinet colleagues are going to have to show real discipline and ingenuity in making sure that they stick within their spending review settlements.

“There won’t be any allowance for inflation in the reserve.

“There can’t be.

“This is why people elect Conservative governments in the end, because we are responsible.

“It doesn’t always mean playing the easy tunes.

“The public finances are very stretched, we’re carrying an £83 billion debt interest payment this year.

“If we want to come through this as quickly as we can, we can’t tolerate wildly excessive public sector pay claims.”

He said current problems would only be compounded by offering the “false premise” that people can receive “very high inflation-driven pay settlements”.

“To be chasing double-digit numbers would be directly against the interest of those doctors, those nurses,” he said.

“What you can’t do is start suddenly saying we’ll have reserve access for inflation uprating all of these settlements.

“We really would then just be in a world where we would very quickly lose control of spending discipline.

“If we want this situation to resolve itself at the fastest possible rate with the least pain, the best thing we can do is not to compound the problems by offering the false premise that you can just keep paying people very high inflation-driven pay settlements.”

He was cited as saying ministers will have to find the cash elsewhere if they want to give more substantial pay rises.

“They’re going to have to own those choices,” he said.

A Treasury spokesperson said: “It is right that we reward our hard-working public sector workers with a pay rise, this needs to be proportionate and balanced with the need to manage inflationary pressures and public sector finances.

“Pay for most frontline workforces, including nurses, police officers, prison officers and teachers, is set through an independent pay review body process.

“The Government will carefully consider all pay recommendations from the independent pay review bodies this summer once their final reports are submitted.”

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