Pay cap

Thank you  your email about public sector pay.  I greatly value the important work that public servants do in delivering essential public services. There is a trade-off between pay and jobs in many public services, and pay restraint is one of the many difficult choices the Government has had to make to help put the public finances back on track.

At Summer Budget 2015, it was announced that the Government will fund public sector workforces for an average annual pay increase of 1 per cent for the 4 years from 2016-17 onwards. At the time, the Office for Budget Responsibility estimated that this policy would protect 200,000 public sector jobs. It is 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.  As the Chancellor has said, public sector pay policy has always been designed to strike the right balance between being fair to our public servants and being fair to those who pay for them. That approach has not changed and Ministers will continually assess that balance.

We would all like to see staff in the emergency services remunerated better, just as we would like to see the living standards of all those in both private and public sectors improve.  This is best done by increasing our national income through improved productivity with a strong economic and export performance.  The alternatives are to raise taxation to fund more spending or, worse, borrowing more money and leaving further debt to the next generation who don't deserve to have a millstone of debt and debt interest around their necks for their entire working lives.  We have a duty to balance the needs of those who work in our public services with the taxpayers who provide their income.