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Rachel Reeves is facing the prospect of further pressure on the struggling public finances as the government is considering handing pay rises to millions of public sector workers in order to avoid the looming threat of strike action.
It comes after public sector pay review bodies recommended pay rises of as much as 4 per cent for teachers and 3 per cent for NHS workers - significantly more than the 2.8 per cent that the government budgeted for.
Care minister Stephen Kinnock said the government will give “careful consideration” to the recommendations, but insisted the government would make sure it is balancing the books.
A rejection of the recommendations is likely to spark another wave of disruptive strike action which could bring public services to a standstill.
But even if the government does meet the pay recommendation, they still face the prospect of strikes as unions are likely to take issue with the funding coming from cuts to school or health service budgets.
Speaking to Sky News, Mr Kinnock said the government has received the recommendations, which were first reported in The Times.
“We’re all about putting more money into the pockets of working people, but we do also have to ensure that we are balancing the books, and we’ve got to work in terms of public sector pay within fiscal constraints”, he said.
“So, of course, we will give these recommendations careful consideration. But I would, of course, also urge our colleagues in the trade union movement to engage constructively with us and recognise the reality of the financial position.”
Speaking to ITV’s Good Morning Britain, he pointed to a pay deal for junior doctors that got them “off the picket line and onto the front line”, and said it had helped to get waiting lists down.
“Absolutely nobody wants to have strike action,” he said.
It comes just days after official figures revealed that the government borrowed nearly £15bn more than expected as a result of last year’s public sector pay rises and increased spending on benefits.
Earlier this year, the Treasury warned that there would be no additional funding for public sector pay rises beyond the 2.8 per cent allocated, saying that if ministers wish to award further pay rises they must find the money from existing departmental budgets.
But Unite branded the pay offer “insulting”, while the National Education Union said it was “putting the government on notice” that it was not enough.
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