Dedicated staff should have their pay frozen, according to the think tank (Image: Getty Images/Blend Images)

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Public sector workers' pay should be cut to plug black holes in the public finances caused by the coronavirus crisis, a top think tank said today.

Freezing the wages of 5.5 million employees, including NHS staff, police and teachers for the next three years would slash £23billion from the Treasury bill, according to the Centre for Policy Studies.

Failing to hike salaries would in effect be a real-terms pay cut because wages would not keep pace with inflation, which is currently 0.5%.

Up to £11.7bn could be “saved” if increases were limited to 1%, analysts said.

The CPS – which was set up by Margaret Thatcher and is led by Robert Colvile, who helped write last year's Conservative election manifesto – claims private sector workers have “suffered far more than those in the public sector”.

Margaret Thatcher was one of the co-founders of the Centre for Policy Studies
(Image: Mirrorpix)

Unveiling its report, ‘Public Sector Pay: The Case for Restraint’, director Mr Colvile said: “The economic impact of the Covid-19 pandemic has been severe, but the pain has not been shared equally.

“Some businesses are folding under the strain, public finances have been decimated, while the public sector has escaped relatively unscathed.

“Healthcare workers aside, it is difficult to justify generous pay rises in the public sector when private sector wages are actually falling.

“At the same time, there is a need to control public spending and reduce the structural deficit which the pandemic is likely to have opened up.

“The Chancellor should redress this imbalance by showing restraint when it comes to pay and pensions in the public sector.”

Nurses could see their salaries suffer
(Image: Getty)

Public sector pay was capped for two years in 2010 – prompting outrage among workers. It was followed by rises limited to 1%, with the cap lifted in 2018.

The CPS claims public sector staff enjoy advantages over private sector counterparts, “in terms of higher pay, greater job security and significantly better pension provision”.

But National Education Union joint general secretary Kevin Courtney said a public sector pay freeze “is the very last thing the economy needs as it tries to recover”.

National Education Union joint general secretary Kevin Courtney
(Image: LightRocket via Getty Images)

Teachers' wages would standstill
(Image: Media Wales)

He added: “Key workers have kept this country on its feet throughout the pandemic.

“A pay freeze would in effect be yet another real-terms pay cut and would mean there is less money to be spent in our struggling retail and hospitality sectors.”

NASUWT teaching union general secretary Patrick Roach said: “Failing to invest in teachers is failing to invest in children’s futures.

“As children and young people try to recover from the impact of the pandemic, they need more than ever the expertise of experienced and qualified teachers in the classroom.

“Freezing teachers’ pay means risking the loss of that expertise.

“The proposal from the Centre for Policy Studies is out of step with public opinion and is a slap in the face to the teaching profession.”

Police Federation chairman John Apter said: “I completely understand the financial pressures the country faces because of the Covid crisis.

“However, it should not be public sector workers – who have been on the frontline, keeping essential services running and protecting the public – to be the ones to suffer as a consequence.

Police pay would also be frozen under the plan
(Image: Pete Harbour)

During the pandemic, the Government has thanked and celebrated members of the public sector; to freeze their pay and penalise these same workers would be morally bankrupt, unforgivable and a betrayal.”

Unite assistant general secretary Gail Cartmail said: “For the last nine months of the pandemic, public sector workers have kept the NHS running, the schools open and refuse being collected – these are the very same workers who have had their pay held down in real terms during a decade of Tory austerity.

“It should not be forgotten that more than an estimated 600 NHS and social care workers, often on low pay, have died from causes linked to Covid-19.

“Now the Centre for Policy Studies has the nerve to suggest that the public sector workforce should again bear the brunt of a three-year pay freeze, at a time when it has been revealed that ministers have been casual in the extreme over their stewardship of the public purse in how PPE contracts have been awarded.

“We suspect that the CPS is being used as an outrider to pave the way for Rishi Sunak ’s statement on public spending next week. The CPS’ analysis is insulting to those public sector workers that have underpinned the fabric of society during this continuing pandemic.

Chancellor Rishi Sunak delivers his spending review on Wednesday.

Chancellor Rishi Sunak delivers the spending review next week
(Image: Daily Mirror)

In a letter to Cabinet ministers in July, he wrote: “It will be vital that public sector pay awards made during the review take into account the wider economic context.

“In May 2020, public sector pay was up by 3.7% on the year before, compared to a fall of 1.2% in the private sector.

“Furthermore, this financial year’s public sector pay awards will be significantly more than the average in the private sector, where the OBR’s (Office for Budget Responsibility) central scenario assumes a fall in average earnings.

“Therefore, for reasons of fairness, we must exercise restraint in future public sector pay awards, ensuring that across this year and the CSR (comprehensive spending review) period, public sector pay levels retain parity with the private sector."

Boris Johnson pledged in June that the Government will "not go back to the austerity of 10 years ago", despite the £210bn hit to Treasury coffers inflicted by the pandemic.