Autumn Budget 2021: Chancellor Rishi Sunak set to end Covid-19 pandemic public sector pay freeze

The Chancellor Rishi Sunak will end the year-long public sector pay freeze in Wednesday’s (27 October) Autumn Budget.

It follows announcements on increases to the minimum wage, a mooted revamp of alcohol duty and funding pledges for both the NHS and T-Level education.

The move will pave the way for millions of workers to receive a pay increase.

Mr Sunak will declare that the UK Government’s Spending Review conclusion is that the public sector pay freeze, brought in due to heavy borrowing during the Covid-19 pandemic, can be brought to a close.

The decision, according to the Treasury, means that more than five million public sector workers, including teachers, nurses and armed forces personnel, could be in line for a pay rise in 2022.

How is the Government able to end the pay freeze?

Officials said the Chancellor was able to make the move due to the “solid recovery” of the economy since Covid-19 restrictions were lifted.

Speaking before the expected announcement, Mr Sunak said: “The economic impact and uncertainty of the virus meant we had to take the difficult decision to pause public sector pay.

“Along with our Plan for Jobs, this action helped us protect livelihoods at the height of the pandemic.

“And now, with the economy firmly back on track, it’s right that nurses, teachers and all the other public sector workers who played their part during the pandemic see their wages rise.”

It comes after public sector pay increases were paused in 2021/2022 - with the exception of increases for NHS staff and workers earning less than £24,000.

What has the reaction been so far?

The general secretary of the UK’s largest trade union, Unison, Christina McAnea said the pay freeze would continue “in all but name” unless Whitehall departments were given extra money by Mr Sunak to fund the wage increases.

Meanwhile, the National Education Union’s (NEU) joint general secretary, Kevin Courtney, described the announcement as “big on promises but short on detail”.

“Teachers, support staff and school and college leaders will not have a clear sense this week of what is in store, and there is no prospect of clarity until 2022.

“The Chancellor must do more than win a day’s headlines.

“He must make good on this latest pledge to drive up pay for those who kept this country on its feet throughout the pandemic.”

Trade Union Congress (TUC) general secretary Frances O’Grady had previously called on ministers to use the autumn Spending Review to end the public sector pay freeze and give frontline workers a pay rise.

Ms O’Grady made the demand earlier this month after research by the TUC found one in five key public sector workers had declared they were “actively considering” quitting and changing profession.

This was due to complaints about low pay, excessive workloads and feeling undervalued.

How is public sector pay decided?

Pay for most frontline workers, including nurses, police officers, prison officers and teachers, is set through an independent pay review body which makes recommendations to ministers.

Officials said the Government would be requesting “full recommendations” from the respective sector pay bodies, with awards to be announced next year.

The pre-Budget announcement comes after it was confirmed on Monday (25 October) that the UK’s lowest-paid workers will receive a pay rise next year.

The minimum wage for those aged 23 and over will increase from £8.91 to £9.50 an hour – an extra £1,000 a year for a full-time worker.

From April 1, young people and apprentices will also see their wages boosted as the so-called “national minimum wage” for people aged 21-22 goes up to £9.18 an hour and the apprentice rate increases to £4.81 an hour.

Reporting by PA

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