The true cost of Reeves's capitulation on public sector pay
Public sector pay is rising, in some cases more than twice as fast as the Chancellor had previously claimed was affordable.
In the second major U-turn of the week, the Government has ditched its previous promise of restraint and backed the pay review boards' recommendations of handouts of between 3.25pc and 6pc.
The decision places fresh strains on the public purse, already reeling from the winter fuel debacle. The Prime Minister's spokesman estimates the cost of higher pay packets at £6.9bn next year, which economists say is roughly £3bn more than expected.
It raises fears of chaos both for departmental budgets and the private sector. The Treasury is only funding an increase of 2.8pc, leaving departments to fund the rest, with growing expectations of fresh tax raids to pay for the largesse.
A few months ago Rachel Reeves and assorted government departments had insisted that pay rises must be limited to 2.8pc to preserve public services.
Last year the Treasury argued that 'spending beyond this would require further borrowing beyond current plans, or tax rises'.
NHS England warned that inflation-busting pay rises would mean worse services, with longer waiting lists while patient safety would be put in jeopardy. Pay rises of 3.3pc, instead of 2.8pc, would cost 300,000 operations and appointments, they said.
Yet pay in the health service is now going to rise by between 3.6pc and 6pc, with the top end of that range going to junior doctors.
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