Public sector pay

I greatly value the important work that nurses, doctors, police officers, firefighters, teachers and other public servants do in delivering essential public services.

Public sector pay is set by independent pay review bodies, but I am in favour of increasing it. I would hope that the Government will respond favourably to easing pay restrictions at the time of the Budget, and that we will see sensible progress soon.

More generally, it is important to strike the right balance between being fair to our public servants and managing our nation’s debt. I know that Ministers will continue to assess that balance. We also need to ensure that we can protect jobs in the public sector. In the 2015 Budget, when it was announced that the Government would fund public sector workforces for an average annual pay increase of 1 per cent for the 4 years from 2016-17 onwards, the Office for Budget Responsibility estimated that this policy would protect 200,000 public sector jobs.

It is also important to consider not just current pay but also the benefit of public sector defined benefit pensions. Treasury analysis has shown that in recent years public sector remuneration is still at a significant premium when considering the value of pensions.

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