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Public Sector Pay Pinch Will Cost Economy £16 Billion

Friday, May 12, 2017



‘Cruel’ cap on public servants’ pay also self-defeating, says union

New GMB analysis reveals that the Governments’ public sector pay pinch will cost the UK economy a staggering £16 billion in lost wages by 2020. [1]

Currently, public sector workers are subjected to a 1% pay cap – meaning that their earnings are kept below inflation.

Between 2017 and 2020, each worker will be an average of £3,300 out of pocket.

With over 5 million public sector workers in the UK, that amounts to £16 billion less spent in the economy.

Over the full decade from 2010 to 2020, a full-time staff nurse will have lost out on over £18,000 in real terms. [2]

A recent GMB report found that the Government’s public sector pay policy was even more prolonged and severe than those pursued by Margaret Thatcher and John Major.

75% of voters support ending the 1% pay cap, including 69% of Conservative voters.

The new figures also reveal the Parliamentary seats where public sector workers could decide the course of the election.

Eighty-five Conservative MPs have a greater number of public sector workers in their constituencies than the size of their majorities.

Rehana Azam, GMB National Secretary for Public Services, said:

“These figures show the public sector pay squeeze is not only cruel and unnecessary – it’s completely self-defeating.

“Each and every public sector worker – from paramedics and teaching assistants to cleaners and council officers -  will be £3,000 out of pocket if this cap is allowed to continue.

“That’s money they need for food, bills and travel from them and their families.

“But it’s also pinching £16 billion from our economy, suppressing growth, and jobs.

“If Theresa May is serious about helping ordinary working families then she must give our five million strong army of public sector workers the long overdue fair wage they need and deserve.”


Contact: GMB press office on 07958 156846 or at

Notes to Editors

[1] Estimates of local public sector employment numbers from the ONS's 2015 Business Register and Employment Survey (the latest year for which figures are available). To obtain an estimate for the average real terms salary loss imposed by the cap for public sector workers, we used national and regional estimates for average (median) public sector salaries as provided by the ONS’s Annual Survey of Hours and Earnings (ASHE) publication.

See attached spreadsheet:

[2] Figures taken from the GMB’s report End the Public Sector Pay Pinch, 08 March 2017:




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