Is this the end of austerity?

Unions have condemned the government’s much-vaunted public sector pay rises as “derisory” amid fears extra money for workers will mean government cuts in other areas.

A million public sector workers received their first pay increase above 1% since 2013, when the pay cap replaced a complete pay freeze brought in in 2010 by the then-chancellor George Osborne as part of the Coalition’s austerity programme.

Teachers, prison officers, members of the armed forces, doctors and dentists will be given rises of between 1 and 4%, backdated to April, the start of the financial year.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Reuters says the announcement, which was rushed through before Parliament’s summer recess began, was an attempt by Theresa May “to regain momentum after a rocky few weeks of Brexit drama”.

But The Times reports that there is no new money coming from the Treasury to fund the rises, “meaning that the relevant departments will fund them from within their existing budgets”.

This has led to fears that other government services or jobs could be cut to fund the pay rises.

Unions have widely condemned the pay increase, pointing out that some of the consolidated figures, which don’t include bonuses and perks, are below the current 2.4% rate of inflation.

The Police Federation said officers’ pay had fallen by about 18% since 2009-10 and the rise would be just £2.50 a week extra for a constable at the start of their career.

The federation’s vice-chair, Che Donald, said: “Today’s derisory announcement flies in the face of a lot of hot air spouted by the Home Office and government over the past few months. In reality this pay award is an insult to those who serve day in, day out.”

The British Medical Association (BMA) expressed similar sentiments, while Christina McAnea, assistant general secretary at the Unison union, telling The Guardian: “Behind the good news headlines, the government is simply robbing Peter to pay Paul”.

It comes as a Resolution Foundation report revealed millions of families are worse off than they were 15 years ago.

Research has indicted that low-income families are actually earning £100 less a year today than they were in 2003, even with figures adjusted for inflation and housing costs.

“The remarkable income stagnation for so many reveals that the economy has been failing to generate income for people over many years despite record levels of people in work” says the BBC’s economics editor Kamal Ahmed.