Rishi Sunak hinted that this week’s Budget could include a public sector pay rise.
Public sector pay rises were paused in 2021/2022, with the exception of the NHS and workers earning less than £24,000.
Mr Sunak said the topic will be discussed when he delivers the Budget to the House of Commons on Wednesday.
“Obviously over the past year, we took a decision to have a more targeted approach to public sector pay given that the year before there were large increases,” he told The Andrew Marr Show.
“And obviously the private sector was seeing pay decreases last year, and people were on furlough.”
He continued: “We thought that was reasonable and fair. Now going forward, we’ll have to set a new pay policy and that will be a topic for next week’s spending review.”
The Trades Union Congress (TUC) is urging Mr Sunak to end the pay freeze and say his spending review is the “big test for the government’s promise to build back better.”
General secretary Frances O’Grady said: “Public services are essential to the resilience our economy needs. They must be better funded, with good pay and conditions to attract and keep high-quality staff.
“Too much of our economy has been taken over by business models that profit from low pay and denying workers’ rights. That must end.
“The chancellor must set out plans to rebuild our economy in a new design with fair pay and decent jobs for all.”
The union body is calling for investment-backed plans for jobs, public services and a fair transition to net-zero.
Recommendations include raising the minimum wage to at least £10 an hour, tackling labour shortages by working with business and unions to improve pay and conditions, and reversing universal credit cuts to a basic level of £260 a week.
