The Centre for Policy Studies has a paper out revealing that a public sector pay freeze could save up to £23 billion by 2023. They argue that:

• The economic impact of the Covid-19 pandemic has been severe, but the pain has not been shared equally.
• Private sector workers have suffered far more than those in the public sector as businesses cut hours, wages and jobs.
• If public sector pay were to be frozen for three years, the government could save a cumulative £23 billion by 2023.
• As much as £11.7 billion could be saved if the public sector pay increase was limited to 1%.
• The public sector currently employs roughly 5.5 million employees, at a total cost of around £190 billion a year.

Since the start of the pandemic, private sector workers have suffered far more than those in the public sector, which strengthens the case for public sector pay restraint over the next three years to ensure the labour market isn’t unfairly weighted towards the public sector. MPs are scheduled to get another inflation-busting 4% pay rise, they should set an example by legislating to freeze their own pay.

Robert Colvile, of the CPS, says:

“The economic impact of the Covid-19 pandemic has been severe, but the pain has not been shared equally. Some businesses are folding under the strain, public finances have been decimated, while the public sector has escaped relatively unscathed. Healthcare workers aside, it is difficult to justify generous pay rises in the public sector when private sector wages are actually falling.

At the same time, there is a need to control public spending and reduce the structural deficit which the pandemic is likely to have opened up. The Chancellor should redress this imbalance by showing restraint when it comes to pay and pensions in the public sector.”

The Chancellor and the rest of the MPs should not be getting a 4% pay rise.

Download ‘Public Sector Pay: The Case for Restraint’ here.