I fully value our public sector workers, they are absolutely vital to maintaining the world class services we have come to rely on in this country. They work immensely hard and deserve all the praise they rightfully receive, over the past few weeks it has been demonstrated just how important our emergency services are.
We inherited the biggest deficit in our history, and we spend more on debt interest than on the entire NHS pay bill. The cap was introduced as dealing with our country's debts and restoring public finances was the right thing to do. In order to ensure these services remain fully funded we must make sure our economy is fit for the future. We have acted to bring the deficit down and it is now down by almost three-quarters. At the same time, we have seen the economy grow and record levels of people in employments.
Public sector pay salaries makes up over half of departmental spending and pay restraint has helped to protect thousands of jobs and frontline services. Twenty five percent of Britain’s workforce is employed in the public sector meaning the bill for increasing pay even by a small amount is enormous. The Institute of Fiscal Studies reports that if we followed Labour’s plan on public sector pay rises, it would cost £54 billion over this Parliament. That is an astronomical figure which in reality would mean cuts would have to be made in other places in order to increase wages. Unlike Labour, the Conservatives realise there is no easy answer or quick fix.
However, I completely understand the need to reward our vital public sector staff appropriately and would like to see the pay cap lifted, when public finances allow it. The Independent Pay Review Bodies are carrying out a review and will be reporting to Government with their recommendations.
Our Policy on public sector pay has always recognised that we need to balance the need to be fair to public sector workers, to protect jobs in the public sector, and to be fair to those who pay for it – the British taxpayer.