Public sector pay grows 4.1 per cent amid coronavirus crisis

Public sector pay was growing by 4.1 per cent in the last quarter despite the coronavirus crisis, figures showed today.

The annual rate for public workers for June-August came as the private sector flatlined, recording zero change.

The grim picture emerged in the latest data on earnings released by the Office for National Statistics.

The public sector has so far been spared much of the furlough pain, pay cuts and layoffs in the rest of the economy. 

MPs are set to be among the beneficiaries of the increase, as their salaries are linked to the figures for October – although some are calling for the rise to go to key workers instead. 

According to the ONS, regular pay in the public sector was 4.1 per cent higher in June to August than the same period last year, while the private sector flatlined

The annual rate of change in total weekly earnings in the private sector in August alone looked slightly brighter at 1.3 per cent – although it was still far below the public sector at 3.6 per cent

According to the ONS, regular pay in the public sector was 4.1 per cent higher in June to August than the same period last year.

By contrast, the private sector saw zero annual growth. In the construction sector, pay was down 5.3 per cent, while wholesaling, retail, hotels and restaurants remuneration was 1.8 per cent lower.

The annual rate of change in total weekly earnings in the private sector in August alone looked slightly brighter at 1.3 per cent – although it was still far below the public sector at 3.6 per cent.

MPs’ annual pay rises are set independently by the Independent Parliamentary Standards Authority, which has linked them to figures for public sector pay rises for October – due to be published in December.

That particular measure came in at 3.7 per cent for August, down slightly from 4.1 per cent in July.

The Labour leader said yesterday that politicians should not receive a rise that could take their salary to around £85,000 during the coronavirus meltdown

Sir Keir Starmer yesterday blasted the idea that MPs, currently paid around £82,000, should get an inflation-busting pay-rise in the middle of the  economic crisis.

The Labour leader called for the cash to be given to key workers instead in ‘this year of all years’ after their long hours of dedicated work throughout the pandemic.

Sir Keir told LBC radio: ‘We shouldn’t have it.’

Downing Street has so far dodged saying whether Boris Johnson supports the rise. 

Last week it emerged public sector workers were keeping hold of their jobs and salaries during the pandemic as figures showed they earned more than those in the private sector.

Those working in the public sector earned on average 7 per cent more than those toiling in the private sector in 2019, according to the Office of National Statistics on October 4.

The graph above shows the percentage difference between public and private sector workers employed by companies/organisations of varying sizes. The greatest earnings difference was in the ‘upper-skilled’ occupations of the smallest firms – employing 10 or fewer staff – where public sector workers earned 24 percent more than their private counterparts.

The greatest earnings difference was in the skilled jobs of the smallest firms – employing 10 or fewer staff – where public sector workers earned 24 per cent more than their private counterparts.

It comes after inflation-busting pay increases announced by the government in July – 2.8 per cent for medics and 3.1 per cent for teachers – cut a deeper chasm between these ‘key workers’ and those who work in supermarkets or care homes.

These taxpayer-funded pay increases will likely take the public sector premium back up to around 10 per cent, which it enjoyed before David Cameron’s coalition government introduced measures to cut the deficit.

The pandemic’s savaging of private businesses will, therefore, exacerbate the differences between the sectors because those who manage to retain their jobs will pay higher taxes to maintain the wage increases in the public sector.