The UK government said it will scrap the year-long public sector pay freeze because the economy is “firmly back on track” following the disruptions caused by the COVID-19 pandemic.
Chancellor of the Exchequer Rishi Sunak confirmed the decision on Monday evening, which will pave the way for a possible wage increase next year for public sector workers such as teachers, nurses, police, and armed forces personnel.
According to the latest available data from the Office for National Statistics, there were 5.68 million public sector workers registered in June.
The pay freeze was imposed last November after the UK government resorted to heavy borrowing during the COVID-19 pandemic, which was caused by the CCP (Chinese Communist Party) virus, also known as the novel coronavirus.
Public sector pay increases were paused for 2021/22, with the exception of the National Health Service (NHS) and those earning less than £24,000.
But Sunak said on Monday said that frontline workers would see their wages rise as the economy bounces back following the lifting of COVID-19 restrictions in July.
“The economic impact and uncertainty of the virus meant we had to take the difficult decision to pause public sector pay,” Sunak said in a statement. “Along with our Plan for Jobs, this action helped us protect livelihoods at the height of the pandemic.
“And now, 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.”
The UK government lifted all CCP virus restrictions on July 19 in England. According to the Office for National Statistics (ONS), the UK economy grew faster in August as the end of lockdown restrictions gave a boost to the service sector.
The Treasury also said on Monday that the National Living Wage is set to increase from £8.91 to £9.50 (from $12.27 to $13.08) an hour as part of the autumn Budget.
The 59-pence rise means a full-time worker on the living wage would see their annual income rise by more than £1,000 ($1,377).
But amid rising inflation, critics have questioned whether the hike is enough to support families facing a cost-of-living crisis.
The Federation of Small Businesses said that higher wage bills, combined with the tax rises announced earlier, will drive many small firms into bankruptcy and eventually cause more job losses.
PA contributed to this report.