The government wants to reward some public sector employees for the extra work they've done during the Covid-19 pandemic.
The Chancellor of the Exchequer has promised almost a million public sector workers a pay rise this year. Public sector workers are employed by the government, and their wages are largely paid for by taxes such as VAT and income tax. Police officers, military members and prison officers are all in line for a salary bump, but the biggest increases will go to doctors and teachers.
Many people see these pay rises as long overdue. Most public sector workers have faced ten years of pay freezes or very low pay rises as part of the UK government's programme of austerity (cutting public spending). Austerity was brought in as a response to the 2008 financial crash and the Tory government’s opinion that public spending was too high and therefore unsustainable. But a couple of years ago the government announced that “austerity is over” and that they now have a bit more money to throw around.
Then the Covid-19 pandemic hit. That, alongside the accompanying lockdown, has made a mess of the government’s spending forecasts for 2020. They are now spending a lot more money than planned, in order to fund things like the furlough scheme and the ‘Eat Out to Help Out’ initiative. They’re also likely to receive less tax than usual, because lots of people are losing their jobs and lots of businesses are selling less than normal or even going bust.
In some ways, then, this seems like an odd time for the government to pledge to increase public sector salaries. But the coronavirus pandemic has put new pressures and risks on the public sector workers who are getting a pay rise. Not only can they not work from home, they’re particularly likely to be exposed to the virus. Their roles bring them into contact with lots of people, their duties can’t always be done while socially distanced, and their workplaces are often set up in a way that can make it easy for a virus to spread.
It’s a relatively common economic practice that riskier jobs should come with an extra financial reward, both because it’s seen as ‘fair’ and because it incentivises people to keep doing the job rather than quitting for safer work.
Read our explainer on: who decides how much we earn?
