Public sector wages are rising at twice the rate of private sector ones, new figures reveal. That is a hike of 6.1% in the last three months to June compared to private sector increases of just 2.8% – if workers are getting any wage increases at all. And yet public sector productivity is falling behind, with many still working from home. Unemployment remains high with the private sector holding back on hiring people thanks to government tax rises.
Public sector productivity falls behind
The public sector is described as a ravenous monster that depends on the struggling private sector to pay its wages. Critics argue that hard-working taxpayers are subsidising a public sector that is more comfortably off than the rest of the population.
This perverted vision of the economy was expressed last week by Labour MP Jonathan Brash who said we should be grateful to the public sector for supporting private business. “The state is one of the biggest procurers of the private sector,” he wrote. “It wouldn’t exist without taxpayers.”
Pay rises and productivity concerns
With inflation running at close to 3% this year, average private sector pay rises will not keep up with prices. Yet the public sector is protected from this with above inflation pay increases. Top of the pile are first-year junior doctors receiving a staggering 59.4% base pay rise, while senior nurses received 62.1%. Yet healthcare productivity is 5.8% lower than in 2019.
Despite workers being shed in the private sector thanks to Labour’s business taxes, the civil service has increased its ranks from 418,000 to 550,000 between 2016 and 2025. The least deserved pay rise is the 3.5% being offered across the board to civil servants despite evidence they are now less productive than before Covid.
Debt and economic impact
The slump in public sector productivity has been estimated to cost the UK £80bn in lost output. Figures from the Office for National Statistics show that total national debt is close to £3 trillion, thanks to the welfare bill and public sector wages and pensions. This means government paid out £7.7bn in debt interest alone for last month.
London government office occupancy has been estimated at just 27% thanks to working from home, while the Bank of England was recently exposed as allowing a thousand of its employees to work from abroad. Chancellor John Healey will have little choice but to dip into taxpayers' pockets again this October in his first budget, according to the article. Labour has failed to generate the growth needed to fairly fund the public sector and can only turn again and again to the much-diminished private sector for the money they desperately need.
