A minister has been unable to guarantee that people will be better off next year despite promising millions of workers a pay rise.
Chancellor Rishi Sunak is poised to end the public sector pay freeze that affected millions of public sector workers such as the police and civil servants during the pandemic.
The decision, according to the Treasury, means that more than five million public sector workers could be in line for a pay rise from next April.
It has also been confirmed that the wages of the UK’s lowest-paid workers will increase as the minimum wage for those aged 23 and over will go up 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 increases to £9.18 an hour and the apprentice rate increases to £4.81 an hour.
But business minister Paul Scully could not say whether people would feel better off this year, due to fears that inflation could outstrip any rise and taking into account the cut to Universal Credit.
If inflation outstrips any pay rise then in real terms, workers will actually get a pay cut in real terms.
Asked by Sky News whether the pay rise would at least match inflation, Scully said: “Well I can’t tell you, because as I say, that’s what the payroll review bodies will do.
“I can’t pre-empt what they’re going to do, I can’t predict what the chancellor is
going to say.”
Pressed on whether people would be better off this year, Scully said: “Well I can’t make those assumptions in terms of inflation and other costs at this moment in time, what I’m going to say is that pay packets are going to go up by 6.6% if they are on the national living wage at the moment.”
When questioned on the issue later in the day, the prime minister’s official spokesman was also unable to say whether public sector workers will get a real-terms rise in wages following the end to the pay freeze.
“The process is for independent pay review bodies to look at… for them to then come forward to make recommendations to departments on a sector-by-sector basis,” he said. “I’m not going to pre-judge that process.”
Asked if departments will get more funding to cover pay rises, he said: “How departments are funded will be a matter for the SR [spending review] and the chancellor to set out.”
Bridget Phillipson MP, Labour’s shadow chief secretary to the Treasury, called the offer “underwhelming”.
“This underwhelming offer works out at £1,000 a year less than Labour’s existing plans for a minimum wage of at least £10 per hour for people working full-time,” she said.
“Much of it will be swallowed up by the government’s tax rises, Universal Credit cuts and failure to get a grip on energy bills.”