Public sector pay squeeze has reduced spending power in the North West by £1.3 billion this year, finds TUC

The public sector pay cap has reduced spending power in the North West by £1.3 billion this year according to new analysis published by the TUC.

The analysis shows that the North West’s public-sector workers are earning, on average, £2,695 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 West have had £7 billion less to spend in the local economy.

Across North West areas, the figures show local economies are missing out on huge amounts:

• In Greater Manchester, it is down £497 million
• Lancashire has experienced a reduction of £267 million
• In Merseyside, spending power is down £285 million
• Across Cheshire it amounts to £134 million

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 West Lynn Collins said: “The public sector pay squeeze has hit communities across the North West 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.”