Reeves hints public sector workers could get above-inflation pay rises

Rachel Reeves suggested that the government may consider approving pay raises for teachers and other public sector employees that are higher than the rate of inflation. She emphasized the importance of reaching agreements in pay negotiations to avoid potential negative consequences.

The leader, who did not argue against claims that separate pay evaluation groups for educators and healthcare workers had recommended raises of around 5.5% - surpassing the current 2% inflation rate - stated that she would provide all the specific information at a later date in July.

Reeves's approach is likely to be supported by labor unions, but the expense of these raises, as estimated by the Institute for Fiscal Studies (IFS), could be around £10 billion for a 5.5% increase in wages across all public sector jobs. This would create significant challenges for the government's strict budgetary guidelines.

During an interview on BBC One's Sunday with Laura Kuenssberg show, Reeves stated that she was prepared to take difficult steps that the previous government failed to address. She mentioned that the pay proposal for teachers had been ignored by the previous education secretary, Gillian Keegan.

Currently, we are examining the suggestions from the pay review body and analyzing them," Reeves stated. "We will collaborate with public sector employees on this matter. Later this month, we will release updates regarding public sector salaries after thoroughly studying the public financial situation and spending.

However, we are aware that there are consequences to not reaching an agreement - such as more strikes, difficulty in finding and keeping doctors, nurses, and teachers. We will handle this situation in the correct manner and ensure that the numbers make sense.

Based on calculations from IFS as stated in the Sunday Telegraph, increasing salaries by 5.5% for teachers and nurses would total £5.5bn. If this raise was extended to all public sector employees, the cost would be closer to £10bn.

Recognizing that there were significant financial pressures, Reeves also suggested that the government would consider the recommendations of the independent pay review bodies, instead of routinely dismissing them, as had occasionally happened under the Conservatives.

She mentioned that the government will handle things "correctly", emphasizing the importance of increased economic growth to enhance the financial situation.

Jeremy Hunt, who is in charge of economic affairs for the opposing party, disagreed with Reeves' statement that Labour was facing an especially challenging economic situation. He also denied the accusation that the Conservative party had avoided making tough choices.

"I have been interviewed multiple times over the years and although I may have flaws, one thing I believe no one can fault me on is my ability to make tough decisions," Hunt stated, acknowledging that his government did receive the teachers' pay review recommendation before the election was announced.

During an appearance on Sky's Trevor Philips on Sunday show, James Murray, a junior Treasury minister, declined to comment on the plans for public sector pay. He simply stated that Reeves would provide more information on the government's response based on the current state of public finances and spending.

He stated: "I believe it would not be beneficial for me to anticipate the steps we are currently taking in regard to any public sector employee."

Reeves declined to provide a specific timeframe or possibility of removing the restriction on working-age benefits for families with more than two children. This limitation is a major factor contributing to child poverty, which has caused concern for Keir Starmer as he faces potential opposition from fellow members of parliament. Reeves explained that without knowledge of how the estimated £3 billion annual expense would be covered, it would be difficult to make any changes to the policy.

"I will manage our economy with strict discipline, restoring stability, as we have been lacking stability," she stated.

Reeves strongly criticized the lack of action by the previous government, specifically mentioning the case of Keegan. She pointed out that the Conservative former education secretary had the pay review body recommendation for teachers but did nothing about it during her time in office.

She chose not to take any actions. She refrained from sharing it publicly. She remained silent on her intended course of action. An election was called by them. They avoided making hard choices. They shied away from facing them.

In the same way, Reeves mentioned that a decision regarding a project for energy infrastructure planning was disregarded because the previous energy secretary, Claire Coutinho, was not ready to make the tough choices.