The government risks a fresh row with public services over pay

Ministers risk a fresh row with public sector workers after warning they will not award pay rises that risk fuelling inflation.

The Government is still assessing whether to accept the recommendations of pay review bodies that would mean rises or around six per cent for millions of workers.

Treasury minister Victoria Atkins said “no decisions have been made” yet but said that “top of our mind” is the impact increasing pay packets would have on the economy.

Chancellor Jeremy Hunt and Rishi Sunak “are looking incredibly carefully at the recommendations and the impacts that that may have, not just for individuals – really important, of course, that we have that at the top of our mind – but also wider implications for the economy”,” Ms Atkins said.

“So they will announce their decisions in due course.

READ MORE: Hunt says driving down inflation ‘will put more cash into your pockets’

“But the Chancellor has said this week that we have to be absolutely tireless in driving down inflation, because that’s what’s hurting all of us.”

Rishi Sunak has already warned that “we all live within budgets” and insisted he has to take a “responsible” approach to the public finances and the wider economic picture.

Ms Atkins ruled out extra borrowing to fund pay settlements, which would mean the government either offers lower pay settlements than recommended or raids departmental budgets to fund them.

Ms Atkins said: “We do have to ensure that when we’re making decisions, wider decisions about departmental spending, that we’re not relying on borrowing to fund those decisions.

“And so those are the sorts of considerations that the Prime Minister and the Chancellor will be bearing in mind.”

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Independent review bodies have reportedly recommended that teachers should receive a 6.5 per cent pay rise for 2023-24, while police officers, prison officers and junior doctors should all get six per cent or more, at a potential cost in excess of £5 billion.

The Prime Minister insists his general approach will be guided by “fairness” and “what is affordable”.

“We all live within budgets, Government is no different to that, and we need to see what is affordable for Government and indeed the taxpayer because it is the taxpayer that is ultimately paying for all of this,” he said.

Anger over below-inflation pay rises has fuelled a series of industrial disputes within public services.

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Shadow Cabinet minister Lisa Nandy refused to say whether a Labour administration would accept the pay review body recommendations in full.

The shadow housing secretary said: “We haven’t seen them all and we would obviously look at them carefully. In the end it is for governments to decide, though.

“We want a much greater focus on retention and recruitment in the pay review body recommendations, because we think that is becoming the major problem and it isn’t just a question of wages for public sector workers, there’s also the problem of workload, which is why we’re losing a lot of people from professions like teaching.”

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