Conservatives urged to join ‘consensus’ to end public sector pay cap

Written by Richard Johnstone on 15 May 2017 in News
News

Liberal Democrats join Labour in pledging to scrap 1% limit on wage increases

Photo: PA

The Conservatives have been urged to join the “emerging consensus” to end the 1% cap on civil service pay increases following an announcement by the Liberal Democrats that they would remove the limit.

The party, which was in the coalition government when the current limit was introduced in 2012 after a two-year freeze, said it would increase public sector wages in line with inflation after the general election.

This follows a pledge by the Labour party that it would also end the 1% limit on increases.


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After the Conservatives were elected as a majority government in 2015, then chancellor George Osborne said that he would continue with the 1% limit until 2020 as part of the government’s deficit reduction plan.

Responding to the Lib Dem announcement, Prospect union deputy general secretary Garry Graham said that there was now “an emerging consensus that the 1% pay cap is hurting civil servants and damaging the capacity of our public services to respond to the challenges facing the UK”.

The union’s members in the public services have seen their living standards cut by 15% or more since 2010 with further cuts still to come under current government plans, he added.

“We would urge the Conservatives to listen to the voice of the profession and join with the other main parties in agreeing to lift the cap,” Graham said.

Announcing the Lib Dem’s plans, the party’s economic spokesman and former business secretary Vince Cable said that public sector workers faced a double blow under the Conservative government, with years of “pitiful” increases to pay combined with higher inflation.

“Our NHS and schools are already struggling to recruit the staff they need,” he said.

“A better future is available. We will stand up for our schools and hospitals and give hard-working nurses, teachers and police the pay rise they deserve.

"Within our carefully costed commitments, we believe government can and must lift the cap on public sector pay.”

The Lib Dem commitment comes as a leading pay policy expert has predicted the “beginning of the end” for the government’s policy to limit civil service wage increases to 1% a year, due to both the pressures the constraints have placed on public services and the likely increase in the inflation rate.

Ken Mulkearn, a director at Incomes Data Research who has analysed public sector pay trends for more than 20 years, predicted the cap, which has been in place since 2012 and followed a two-year freeze, would be “slowly unwinding in its current form” due to both the pressures the constraints have placed on public services and the likely increase in the inflation rate.

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