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Around five million public sector workers are expected to be hit by a salary cap as Rishi Sunak seeks to rebuild public finances, according to reports.
The chancellor is expected to use next week’s expense review limiting wage increases in the public sector to inflation or below it.
Only frontline NHS doctors and nurses will be exempt from the limit in recognition of their work during the coronavirus pandemic, The Times said.
However, teachers, the police, members of the military and NHS administrators will be affected.
The move is likely to be greeted with fury by public sector unions who say their members were the hardest hit by conservative austerity cuts after the global financial crisis.
The chancellor is already under fire from widespread reports that he is preparing to set aside a pledge to spend 0.7% of national income on foreign aid while seeking savings.
Releasing the spending review in July, Sunak warned of the need for “restraint” in future public sector pay deals.
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In October, Sunak warned of ‘tough decisions’ on debt
He said the awards given in the review period would have to take into account the “broader economic context” and highlighted that while public sector wages were increasing, private sector wages had receded during the coronavirus pandemic.
That argument was backed up by a new report from the Center for Policy Studies (CPS) that said private sector workers had suffered much more from the economic impact of the disease.
He said a three-year pay freeze across the public sector could save up to £ 23bn, helping to plug the hole in public finances opened by the pandemic.
If the NHS were excluded, the CPS said it could still save £ 15.3 billion over the three years.
Director Robert Colvile said: “Aside from healthcare workers, it is difficult to justify the generous wage increases in the public sector when private sector wages are actually falling.
“At the same time, it is necessary to control public spending and reduce the structural deficit that the pandemic has probably opened.”
The Unite union said it appeared the CPS was being used as an “escort” ahead of Sunak’s statement next week.
NHS front-line doctors and nurses are expected to be exempt from the limit
Under Secretary General Gail Cartmail said: “In the spring, the prime minister praised the NHS staff for saving his life.
“Now in the fall, you must ensure that your chancellor turns those warm words into cash for those who ensure the efficient running of the NHS, schools and universities, and the myriad of services provided daily by city councils.”
Unison Secretary General Dave Prentis said a new salary cap would be a “cruel blow” to NHS staff who are not on the front line.
“Key workers in all public services remain at the center of the fight against COVID-19,” he said.
“The government must do the right thing next week and announce the salary increase that all staff have more than earned.”
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