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North East spending power down £422m due to public sector pay caps, says TUC

New analysis from the Trades Union Congress (TUC) has found that the public sector pay cap has reduced spending power in the North East by £422m this year.

The analysis shows that the North East’s public-sector workers are earning, on average, £2,323 less today than if their pay had risen in line with inflation (CPI).

As a result, since the pay caps began in 2010, full-time public sector workers in the North East have had £2.1 billion less to spend in the local economy.

Recent TUC polling shows that one in seven (15%) public sector workers skipped meals this year to make ends meet. And 1 in 4 (24%) say they couldn’t pay an unexpected bill of £500.

Research published by the IPPR last week revealed that raising public sector pay would boost spending in local economies. And would help the public purse by raising tax revenues and reducing the cost of in-work benefits.

TUC Regional Secretary for the North East Beth Farhat said: “The public sector pay squeeze has hit communities across the North East hard. And that means less money spent on our high streets and in local businesses.

“The pay cap is a false economy. The Chancellor must use the Budget to give all public sector workers the pay rise they have earned, and end these artificial pay restrictions.”

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