By Health workers exempt from public sector pay freeze
The Government will freeze public sector pay next year but NHS workers and those in the lowest paid jobs will still get an increase in their wages, the Chancellor has announced this afternoon.
Rishi Sunak said that while much of the private sector had been hammered during the coronavirus crisis, public sector workers had largely not been affected by job losses and falling wages.
Mr Sunak said in that ‘difficult context’ he could not justify ‘significant across the board’ pay increases for all public sector workers.
However, he revealed NHS staff will be exempt from the pay freeze while those earning less than £24,000 will get a pay rise of at least £250.
The Chancellor also said the government had spent £280bn this year to fight coronavirus and will spend a further £55bn to support public services next year.
He said unemployment was predicted to rise to a peak of 7.5% – or 2.6 million people – in the second quarter of 2021. It is forecast to fall in every coming year, hitting 4.4% by the end of 2024.
The Chancellor said spending 0.7% of national income on overseas aid was “difficult to justify” and at a time of “unprecedented crisis” it is being cut to 0.5% in 2021 but with the intention to return to 0.7% when the fiscal situation allows.
Other main points:
- £18bn allocated to testing, PPE and vaccines and £3bn for the NHS plus over £2bn to keep transport arteries open, more than £3bn to local authorities and £250m to help end rough sleeping
- GDP expected to grow by 5.5% in 2021 but will not recover to pre-crisis levels until the fourth quarter of 2022
- Borrowing is expected to reach £394bn for the current fiscal year, or 19% of GDP – the highest recorded level of borrowing in peacetime
- £3bn for a three-year Restart programme to help a million people who have been unemployed for over a year to find jobs
- The national living wage will rise by 2.2% to £8.91 per hour and extend to those aged 23 and over. For a full-time worker on the national living wage, that’s an increase of £345 next year. National minimum wage will also increase.
- “Levelling up” fund worth £4bn.
