Rail strikes: Give public sector workers a pay rise or cut everyone's taxes by 2%? Chancellor left with tough set of choices

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Rail strikes: Give public sector workers a pay rise or cut everyone's taxes by 2%? Chancellor left with tough set of choices
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Rail strikes: Rise public sector pay by 9% or cut everyone's taxes by 2%? Chancellor left with tough set of choices

Your instincts are to cut taxes and reduce public spending yet pretty much every decision you've taken in office has involved doing precisely the opposite.

While headline pay per hour for public sector workers is still about 7% higher than for private sector workers, when you adjust for differences in working patterns and skill levels , actually public sector workers are now earning slightly less than their private sector counterparts - for the first time in at least a generation.

To find out, we need to take a look at the public finances. In 2021/22 the government spent a grand total of just over a trillion pounds, of which around £230bn was spent on public sector pay. Now, as things stand the Spending Review envisaged pay going up more or less in line with inflation - but at the time that was forecast to be around 2-3%. That would cost around £7bn. So let's imagine that's our starting point.

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