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12.05.17

‘Cruel’ public sector pay cap to cost economy £16bn in lost wages

The 1% cap on public sector pay will cost the UK economy a total of £16bn in lost wages by 2020, a leading trade union has stated.

Analysis released by the GMB has suggested that the policy of capping public sector workers at 1% – below the rate of inflation – will cost the UK economy hugely over the next five years.

And between 2017 and 2020, the union predict that the five million workers in the sector will find themselves out of pocket by an average of £3,300 each.

Rehana Azam, GMB national secretary for public services, argued that the figures show that the pay squeeze is “cruel and unnecessary” and, as well as that, 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,” she said.

“That’s money they need for food, bills and travel from them and their families. But it’s also pinching £16bn 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.”

The GMB’s call comes after the Resolution Foundation warned in March that public sector pay was in sharp decline and likely to decrease even further over the next few years.

And back in January, the Trades Union Congress warned that the public sector was facing a real-terms pay cut of 9.3% by 2020 – deepening worries about worker retention.

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