(Alliance News) - The Chancellor Jeremy Hunt appeared to discourage workers from asking for pay rises far above the target rate for inflation as he stressed the Government's "responsible" approach to public sector wages.
It comes amid further signs of union unrest at the prospect the Chancellor and Prime Minister may not accept the recommendations of expert pay review bodies.
Teachers from the National Association of Schoolmasters Union of Women Teachers union in England plan to stage continuous action short of strike action starting in September, with a warning that the expected 6.5% rise in wages recommended by their pay review body was the minimum that should be offered.
Decisions on whether to accept the rises are expected within days, with Hunt hinting that any increases in wages may have to come from budget cuts.
Speaking on ITV1's Peston, airing on Wednesday evening, the Chancellor said: "We will take a responsible attitude when it comes to the element of pay that we directly control, which is public sector pay, and we'll make sure that any awards we give don't themselves fuel inflation."
"But what I would say is that just to take your bigger point, because public sector isn't the entire economy, is that if people can see that the trajectory of inflation is actually to fall dramatically … then people won't be asking for these pay awards that feed that pay spiral."
He urged workers to "understand this is a difficult period" and that if ministers "show discipline" they will avoid "having the same discussion in a year's time".
Prime Minister Rishi Sunak has made halving inflation to around 5.3% this year one of his policy priorities and said the Government will resist any increases which could risk making it harder to meet that goal.
Reports have suggested the independent review bodies have recommended that teachers should receive a 6.5% pay rise for 2023/24, while police officers, prison officers and junior doctors should all get 6% or more, at a potential cost in excess of GBP5 billion.
The Prime Minister, speaking at the Nato summit in Vilnius, Lithuania, said: "We will be guided by a couple of principles: the first is fairness, fairness for our public sector workers because we want to make sure that they are rewarded fairly for their hard work, but also fairness for taxpayers who ultimately have to foot the bill for pay rises."
"And the other thing we will be guided by is responsibility: I think everyone knows the economic context we are in and we need to make sure that Government decisions, particularly when it comes to not borrowing more, are made responsibly so that we don't fuel inflation, make it worse or last for longer."
Hunt was emphatic that "we won't fund any public sector pay awards through additional borrowing".
He said: "If you fund any public sector pay rise by increasing borrowing that year, that pumps billions of pounds of extra money into the economy. And when companies can't meet the demand, when people try and spend that money, they react by putting up their prices."
The Chancellor again appeared to rule out tax cuts in the near future, saying that halving inflation was "the quickest way that I can put money into people's pockets".
With the Government refusing to borrow more and no prospect of tax hikes to raise the money for wage increases, departmental budgets could have to be raided to fund pay rises, potentially leading to cuts to services.
Decisions by Sunak and Hunt on the pay awards are expected to be announced before MPs leave Westminster for their summer break on July 20.
Downing Street said that ministers would look at recommendations for the 2023/24 settlements "in the round" and had not made a "final decision".
Consumer Prices Index inflation peaked at 11.1% growth last year, and was last reported at 8.7% for May.
Anger over below-inflation pay rises has already fuelled a series of industrial disputes within public services.
The NASUWT has now announced action short of strikes, although its members in England could still walk out in the autumn term in a row over pay, workload and working time.
General secretary Patrick Roach said: "The Government must stop playing politics, publish the report of the School Teachers' Review Body and put an end to the damaging speculation they have allowed to develop over recent weeks.
"The STRB's recommendation of a 6.5% pay award for teachers and headteachers, which has been widely reported, is the minimum to which our members are entitled.
"However, NASUWT members are clear that teachers deserve better than just another real-terms pay cut."
Shadow cabinet minister Lisa Nandy refused to say whether a Labour administration would accept the pay review body recommendations in full.
The shadow housing secretary told LBC: "We haven't seen them all and we would obviously look at them carefully. In the end it is for governments to decide, though.
"We want a much greater focus on retention and recruitment in the pay review body recommendations, because we think that is becoming the major problem and it isn't just a question of wages for public sector workers, there's also the problem of workload, which is why we're losing a lot of people from professions like teaching."
source: PA
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