To ask the Chancellor of the Exchequer, what estimate his Department has made of the number of people whose median annual pay is under £24,000 who are eligible to receive the £250 increase announced in the Spending Review 2020 and whose pay will fall in real terms as a result of inflation.
8 December 2020
We estimate that 2.1 million people earn less than £24,000 on a full-time equivalent basis in the public sector. The OBR forecasts inflation for the 2021/22 financial year will be 1.4%. With a payment of £250 everyone earning under £24,000 will receive a pay award worth over 1%, those earning less than £18,000 on a full-time equivalent basis will receive a pay award above inflation.
For the financial year 2020/21 government implemented significant real terms increases of at least 2% for the nine major workforces for whom the government sets pay policy. School teachers received 3.1% on average, doctors and dentists 2.8% and police 2.5%. In addition, more than 1 million NHS workers continue to benefit from the three-year Agenda for Change deal, which delivers an investment of 3% in 2020/21. The OBR’s current inflation forecast for the 2020/21 financial year is 0.6%.
OBR Economic and Fiscal Outlook: