Minister can’t rule out below-inflation pay rise – Budget updates


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Rishi Sunak’s 2021 Budget will include an end to the year-long public sector wage freeze imposed during the coronavirus pandemic, the Treasury has said.

The chancellor said in a statement ahead of his Commons speech on Wednesday that “with the economy firmly back on track, it’s right that nurses, teachers and all the other public sector workers who played their part during the pandemic see their wages rise”.

However, unions warned any pay rises must be above the rate of inflation, which is soaring. On Tuesday morning Paul Scully, the business minister, was unable to confirm this would be the case, saying any rises would be based on the recommendations of pay review bodies.

Meanwhile, the government has also announced a rise in the minimum wage for workers aged 23 or older. Some 2 million people on the so-called “national living wage” will see their pay increase from £8.91 an hour to £9.50 from 1 April.

The minimum pay for 21- and 22-year-olds is also set to rise, as well as for apprentices.

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Public sector pay freeze imposed on millions during pandemic to be lifted

The government is set to lift the public sector pay freeze it imposed on millions of workers last year, Rishi Sunak will announce on Wednesday.

The partial pay freeze was imposed by the chancellor in response to the coronavirus pandemic, and was described by unions as “kick in the teeth” for key workers who it hit, writes Jon Stone.

Critics accused the chancellor of economic mismanagement for taking demand out of the economy during a downturn, but Mr Sunak said he wanted public sector wages to match “the context of the wider economic climate” in which wages were falling.

Jon Sharman26 October 2021 07:51

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Minimum and living wages to rise

Some 2 million workers will get a pay rise next year when the national living wage is increased from £8.91 an hour to £9.50.

The change will take effect on 1 April, the Treasury said ahead of Rishi Sunak’s Budget address.

The 59p hourly boost will mean a full-time worker on the living wage will get a pay rise of more than £1,000 per year, according to the government.

But critics questioned how much better off workers will be considering the chancellor has already hiked National Insurance and cut universal credit as inflation rises. Many universal credit claimants are in work.

Nonetheless, the 6.6 per cent hike is more than twice the current consumer price inflation rate of 3.1 per cent.

While the national minimum wage applies to everyone of school-leaving age, the living wage is for the over-23s.

For those aged 21 and 22, the minimum wage will rise from £8.36 an hour to £9.18, while the figure for apprentices will go from £4.30 to £4.81 per hour.

Jon Sharman26 October 2021 07:56

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Minister can’t say if public sector pay will keep pace with inflation

Paul Scully, the business minister, has refused to say whether public sector workers will get an above-inflation pay rise next year.

The Treasury has announced an end to the coronavirus-driven public sector pay freeze ahead of Rishi Sunak’s Budget speech tomorrow.

However, Mr Scully said the level of any increase would depend on the recommendations of the pay review bodies when they report in the spring.

Speaking on Sky News, he declined to say whether they would be above the rate of inflation at the time.

“That will be determined by the pay review bodies. The chancellor is keen to give people a rise,” he said.

“They will then take that into account as they look to what should be an appropriate rise for the public sector, given the public finances.

“I can’t pre-empt what they are going to do. We will see where we are come next April when the review bodies have reported.”

Jon Sharman26 October 2021 08:08

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Living wage hike will cause small firms to struggle, lobby group claims

The UK’s smallest companies could struggle to fill jobs because of the impending living wage rise, a lobby group has claimed.

Mike Cherry, the chairman of the Federation of Small Businesses, told LBC he was worried about Rishi Sunak’s Budget.

He said: “For the smallest employers they will struggle to maintain jobs they need because of the increase of the national living wage, and employees will have to face the increase of NI contributions next April so it is problems all around.

“As we look at consumers we should look at businesses and tradesman, the cost of diesel and the cost of materials. That’s alongside debts and coming out of the pandemic.”

He added: “The smallest businesses will really struggle to keep people employed with the living wage going up higher than expected. The government should increase the employment allowance to allow businesses to employ people on their books.”

Jon Sharman26 October 2021 08:27

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‘Go slow’ strategy for customs checks ‘planned by France in fishing row’

A “go-slow” strategy for customs checks coming in and out of the UK before Christmas is reportedly being prepared by France as the row over fishing rights after Brexit escalates.

France will finalise a set of potential sanctions on Tuesday which could be rolled out if its fishermen are not given greater access to UK waters, writes Emily Atkinson.

Fury was sparked after the government in London announced last month that it had approved just 12 of the 47 applications it had received from French small boats. Paris called the move “unacceptable”.

Jon Sharman26 October 2021 08:37

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MPs should wear masks in Commons, WHO envoy suggests

MPs should wear masks in the Commons to mitigate the risks of “unstoppable” Covid-19, a senior World Health Organisation (WHO) official has said.

Dr David Nabarro, the WHO’s Covid-19 special envoy, told Sky News: “This virus, it is absolutely unstoppable, it gets everywhere, and so we have to do everything we possibly can to stop it.

“And one of the best ways to stop it is a well-fitting surgical mask properly over your face, pushed in over your nose, covering everything, and that reduces the risk to others and the risk to you.

“If it works, why on earth don’t people use it? It’s not a party political issue – this virus doesn’t vote.

“And indeed, there’s no difference in how you deal with the virus when you vote for this party or that party.

“So everybody, wear masks when you are in close confinement, it’s the right sensible proper thing to do, and everybody should be doing it, including our leaders.”

Though not as fraught an issue as in the US, mask-wearing by MPs has become a talking point in recent days. Last week Sajid Javid, the health secretary, urged his colleagues to cover their faces while in the Commons, though at the weekend Rishi Sunak would not be drawn on whether he thought they should as a matter of course.

Read more about all that here:

Jon Sharman26 October 2021 08:47

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Speaker says ministers should resign for pre-Budget briefings on spending

Sir Lindsay Hoyle has suggested ministers should resign for pre-briefing details of the Budget, as he said it was unacceptable for the government to “try to run roughshod” over parliament.

Expressing his anger at the move, the Commons speaker hit out at the decision of the Treasury to announce a multi-billion pound funding boost for the NHS — three days before the Budget, writes Ashley Cowburn.

The £5.9bn package unveiled on Sunday evening is aimed at tackling waiting lists, with the number of people waiting routine hospital treatment in England at the highest levels since records began in 2007.

Jon Sharman26 October 2021 08:57

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Cop26 on brink as Boris Johnson reveals he’s ‘very worried’ and climate fund deadline is missed

Hopes for a breakthrough on tackling the climate crisis at Cop26 are fading after Boris Johnson admitted he is “very worried” the summit will fail and it was revealed poor nations will not receive the $100bn of help they were promised until 2023 – three years late.

With just six days until the crucial Glasgow gathering, the United Nations also released fresh alarming evidence that the world is “way off track” in curbing greenhouse gas emissions.

Speaking to children in Downing Street, the prime minister dropped his previous optimism about the chances of reaching an agreement to deliver net zero emissions by 2050, writes Rob Merrick.

Jon Sharman26 October 2021 09:07

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Sunak ‘rules out VAT cut on household energy bills’

Rishi Sunak has ruled out cutting VAT on household energy bills to help families struggling through the winter, according to a report.

Treasury insiders told the Mail that the chancellor believes slashing VAT would subsidise the rich while providing little benefit to poorer households.

Labour has been calling on the government to bring in the measure, promised by Michael Gove and Boris Johnson during the Brexit campaign.

Earlier this week Labour produced research which it said showed poorer households pay a…



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