Economy in the East faces £156m hit from key worker pay cuts
The Trades Union Congress is calling on the Chancellor to do more.
Last updated 5th Feb 2021
The TUC has revealed today (Friday 5th February) that the cuts to key worker pay could cost the region's economy £156 million this year.
It says that works out on average as a £2.7m hit per constituency in the East.
The analysis looks at Government plans to cut pay rises for key workers in the public sector.
It says that cutting pay rises for the millions of key workers who've helped to keep the country going during the pandemic, will have a knock on effect for other sectors.
It argues that if public sector key workers are forced to tighten their belts, the reduced spending will impact on other businesses as well.
As a result of its analysis, the TUC is calling on the Chancellor to reconsider and commit to policies that will improve pay and conditions for all workers.
It says they should include: "Fair pay rises for key workers in the public sector - with a plan to restore wages to their levels before austerity.
"Guarantee that all outsourced public sector workers get a pay rise so that they earn at least the real Living Wage.
"Action to ensure that every key worker in every sector gets a pay rise, including raising the national minimum wage to at least £10 an hour.
"Ban zero-hour contracts - and use the long-awaited employment bill to strengthen rights to fair working conditions for key workers."
TUC Regional Secretary Sam Gurney said: "Key workers have kept Eastern England going through the pandemic. The Prime Minister clapped them, but his applause will ring hollow if he cuts their pay. It's no way to thank them.
"We're all part of the same pay circle. When a key worker spends their wages, it goes into other people's pay packets.
"Shop staff, factory workers, delivery drivers, childminders, bar staff - right across the economy, we are all connected.
"If our key workers get the pay rises they've earned, it will benefit everyone.
"The spending boost will help our local businesses and high streets recover quickly. And it will help level up our unequal economy."
The TUC says that the chancellor must not repeat the mistakes of the 2010s.
UNISON Eastern regional secretary Tim Roberts said: “Taking money from the pockets of employees at the heart of the pandemic response is nothing short of deplorable. It would also deliver the worst possible blow to the Covid-scarred economy.
“The Prime Minister claims he wants to boost the public sector workforce. Yet hitting wages is going to see more staff leaving not joining, especially in care where pay is at poverty levels.
“Job vacancies have proved devastating to the NHS and care sector. Without an urgent rethink on pay, the government risks losing experienced staff.
“Fair wages for key workers would help protect public services and deliver the required economic boost.”
Millions of public sector workers saw their pay capped by George Osborne. They lost thousands of pounds - and the knock-on impact was wages falling across the economy and the worst slump in living standards in more than 200 years.
A spokesperson from HM Treasury said: "’Given the unique impact of Covid-19 on the health service, and despite the challenging economic context, the government will continue to provide for pay rises for over 1 million NHS workers.
‘’The government will also prioritise the lowest paid, with 2.1 million public sector workers earning less than £24,000 receiving a minimum £250 increase’’