The UK needs a pay rise. Real median (average) household incomes are today only five per cent higher than they were in 2007 and the country is in the worst period of pay growth in 150 years, exposing serious weaknesses in the UK’s economic model. The focus of government economic policy must now be to raise pay and productivity across the entire economy, and it is critical that the public sector is not left behind.
In this briefing, we argue that government should revise its policy on public sector pay as part of a wider strategic intervention to raise earnings across the economy, in both the public and the private sectors, and we set out three principles to guide government and pay review bodies in lifting the public sector pay cap.
