The seven-year public sector pay freeze has been finally ended by the Tory Government as the Cabinet agreed wage hikes for police and prison officers.
Caving to pressure from voters, unions and her own MPs, Theresa May decided to grant police a 1% lump sum on top of a 1% pay rise for 2017/18.
Prison staff will also get a 1.7% rise, although both increases will have to be funded from within departmental budgets and possibly through other cuts or savings.
But unions and others branded the new offer “pathetic” and warned that with soaring inflation millions of workers were still suffering real terms wage cuts.
Crucially, Downing Street also signalled that the wider public sector could see a relaxation of the 1% pay cap imposed by George Osborne.
The Cabinet agreed that “more flexibility” would be shown to help retain and recruit staff and maintain “world class public services”, the PM’s official spokesman said.
Labour’s ‘Corbyn surge’ in the general election in June stemmed in part from voter anger over the continuing wage squeeze on nurses, the armed forces, teachers and others.
But critics were swift to point out that the police’s extra 1% was in fact “non-consolidated” and would be a one-off lump sum just for this financial year.
Amid growing threats of winter strikes over the pay squeeze, the GMB union said the announcement was “smoke and mirror politics”, as it was funded not with new money but from further cuts.
PCS union chief Mark Serwotka told the TUC conference that the offer was “a pile of crap and not good enough”.
TUC general secretary Frances O’Grady pointed out that new figures released on Tuesday showed inflation now stood at 2.9% - way above the rises announced.
“This below-inflation pay offer is pathetic. Public sector workers have suffered seven long years of real pay cuts, and are thousands of pounds worse off. Today’s announcement means bills will continue to rise faster than their wages.
“If Ministers think a derisory rise like this will deal with the staffing crisis in our public services, they are sorely mistaken.”
The Prison Officers Association swiftly said that their 1.7% offer was inadequate. POA general secretary Steve Gillan said: “I have made it clear that it is a pay cut. It is not acceptable. Our executive will be looking co-ordinate action with other trade unions.”
When asked directly if the 1% pay cap had now ended, the PM’s spokesman replied: “Yes”.
The PM’s official spokesman said Cabinet agreed this morning that “more flexibility may be required to deliver world class services” and that would be reflected in the 2018/19 pay review process for the NHS and other staff.
“The cabinet agreed that our public sector workers are among the most talented and hard-working people in our society,” the spokesman said.
“They, like everyone else, deserve to have fulfilling jobs that are fairly rewarded.
“The government takes a balanced approach to public spending, dealing with our debts to keep our economy strong, while also making sure we invest in our public services.
“The government recognises that in some parts of the public sector, particularly in areas of skill shortage, more flexibility may be required to deliver world class public services, including in return for improvements to public sector productivity.”
The Treasury confirmed the police and prison officer rises and the move follows weeks of speculation the freeze may be lifted in response to growing anger about morale in the public sector.
Treasury Chief Secretary Liz Truss said the higher increases for rank-and-file police and prison officers - which are based on recommendations from independent pay review bodies - would be backdated to September 1.
HuffPost UK revealed this summer that Chancellor Philip Hammond had warned fellow ministers he backed pay rises if they could be funded from savings within individual departments.
But the sheer number of NHS staff would mean deep cuts in the health budget to afford a rise for nurses, midwives, doctors and others.
Unison general secretary Dave Prentis warned: ”There must be no selective lifting of the cap. No one part of the public sector is any more deserving than the rest. With inflation on the rise, the cap must go for everyone and it must go now.”