Autumn Statement: Public sector pay capped
George Osborne further alienated public sector workers today when he announced in his Autumn Statement that following two years of pay freezes public sector workers could look forward to pay rises of no more than 1%.
Public sector pay has been frozen for the last two years as the government tries to reign in its spending. But now as the end of that pay freeze looms Osborne has dealt another blow to public sector workers by announcing that their pay rises will be capped at no more than 1% a year until 2014.
The announcement is unlikely to help placate public sector workers who are set to strike tomorrow in a row over pensions. It will be the biggest public sector strike for a generation.
The latest move by the chancellor threatens to escalate the government's war with the unions. "George Osborne has ratcheted up the class war and has made it clear through his attack on pay and employment rights that he wants the workers to keep taking the hit while the rich get richer," says Bob Crow, leader of the Rail, Maritime and Transport Union.
"After two years of a freeze, pay for millions of key workers will go up by 1% in the next two years," adds Crow.
"With inflation over 5%, and the increase in pension contributions, that means nurses and the others we rely on will be around 25% worse off after four years of this ConDem government while top bosses' pay goes up by 12% a year. That's a scandal."
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).