Katy Balls

Sunak’s NHS pay rise headache

Sunak's NHS pay rise headache
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Will the government press on with a 1 per cent pay rise for nurses? Despite the Chancellor announcing tax rises in his Budget, it's a recommendation over NHS pay that is proving the most contentious for ministers. The Department of Health has recommended a 1 per cent rise to the independent panel that advises the government on NHS salaries. This is below what had been expected — with nurses' unions campaigning for a pay rise as high as 12.5 per cent. Government aides are keen to stress no decision has been made as the independent body is not due to make its recommendation until May. 

Speaking today before the health select committee, NHS chief Simon Stevens has confirmed that the NHS had budgeted for a higher pay rise of 2.1 per cent. When asked by the chair Jeremy Hunt why the government now wanted to pay just half of the original sum, Stevens said 'things have changed' in the two years since the plan was first made. The argument from ministers was summed up by the Prime Minister on Sunday when Johnson argued that the government is giving workers 'as much as we can' in the 'tough times of the Covid pandemic'. The Chancellor takes the view that substantial pay rises for public sector workers cannot be justified at a time when average earnings in the private sector are falling.

However, it's an argument that is receiving a mixed reception among the parliamentary party. Tories worry that the lower pay rise narrative for public sector workers could be contrasted with pay rises for Downing Street staff and an expensive refurbishment of the Downing Street flat. 

It's a line Keir Starmer is already pursuing. While MPs such as the former whip and chair of the Covid Recovery Group Mark Harper have defended the 1 per cent pay rise, others worry it's the beginning of another politically painful row akin to the free school meals fiasco. The anger is not yet at that level — but MPs are starting to explore options. There are two ideas gaining traction in the party. 

The first is to have a targeted pay rise. Rather than an across the board NHS pay rise, MPs — including the influential education select committee chair Robert Halfon — are arguing in favour of a larger pay rise for lower-paid NHS workers. The thinking among those pushing for this idea is that this would deal with the politically salient part of the problem. 

The second idea is a one-off bonus payment to thank NHS staff for their work, like the £500 bonus seen in Scotland. Given the Chancellor is known to be worried about temporary spending becoming permanent (it's one of the reasons he has argued privately against extending the universal credit uplift), it's an idea that could sit well with the Treasury. 

The general sense in government is that the row is unlikely to reach such a point that ministers will have to consider a much higher pay rise for all NHS staff. But there are options should the government need to de-dramatise the issue.