[Finance] Rachel Reeves to reveal £20bn shortfall left by Conservative Government

[Weststander]

Not all OAPs who are not on 'welfare' are 'sitting pretty'

Not all worked in the public sector (and thus have very generous pensions) or have decent private pensions.

This is just to pay for the Public Sector workers 5%+ pay rise.

Reeves knows these public sector workers will have voted Labour, she is just rewarding her electorate.

There’s also a large section of OAP’s, 2.4m, are who entitled to an array of welfare benefits. Some add up to a fair whack.

Brown should never have made it universal in the first place. As I said my parents definitely didn’t need the winter fuel payment. Madness when others suffer.

Public sector workers …. I don’t think of them as a different part of society to me, competitively. In a recent all nighter in A&E for a loved one, again I saw what our servants endure, what they do for us. We need to look after these people, retain them. But I should mention that the pension scheme is incredible …. Mrs.W is accruing the rights under one.

 

[Mellor 3 Ward 4]

Martin Lewis seems to agree with me:


Martin Lewis, founder of MoneySavingExpert, immediately warned the targeting of the payments was “too narrow with the winter we have coming”, adding: “The energy price cap is likely to rise 10% this October and stay high across the winter, leaving most energy bills nearly double those pre-crisis, at levels unaffordable for millions.

“Many pensioners eke out the £100 to £300 winter fuel payments to allow them to keep some heating on through the cold months.

“While there’s an argument for ending its universality due to tight national finances, it’s being squeezed to too narrow a group – just those on benefits and pension credit. Yet again, those just above the thresholds will be hardest hit.”

 

[aolstudios]

 

[Steve in Japan]

So - why is it going to be 'grim' for non public sector staff?

Errr, cos they're going to have to pay for it.

 

[WATFORD zero]

The fantasy of Rwanda continues, and was going to apparently save the Government 6.5 billion of completely unbudgeted immigration costs and that's why they hadn't budgeted for them

 

[Steve in Japan]

And about time too - it's been a grim 17 years for public sector workers according to this IFS publication:

Recent trends in public sector pay | Institute for Fiscal Studies

How has public sector pay changed in recent years? Which type of workers have done better and which have done worse?

ifs.org.uk

1. Average pay in the public and private sectors has performed very differently since the election in 2019. Real public sector earnings initially grew substantially during the pandemic (whereas private sector earnings fell as many were furloughed). But the ensuing rise in inflation hit public sector pay much harder due to government pay restraint. Overall, between December 2019 and November 2023, inflation-adjusted average private sector pay grew by 2.3%, whereas public sector pay fell by 0.3%.

2. These recent trends come on top of poor earnings performance in both sectors since 2007. Real public sector pay at the end of 2023 was still 1% lower than its level at the beginning of 2007. Real private sector pay increased by 4% from 2007 to 2023.

3. Within the public sector, some high-profile professions (nurses, and particularly teachers and hospital doctors) have seen considerably worse pay growth than the average public sector worker. Indeed,teachers saw large reductions in average real pay from 2010 to 2019 (falling 13%) but have seen stronger pay growth since then (with pay 5% higher in September 2023 than in April 2019 after accounting for the pay deals agreed last summer). Overall, this still leaves average teachers’ pay in September 2023 9% lower than in 2010.

4. Looking at trends in the English NHS, nurses saw a significant reduction in real pay over the 2010s (falling 7% between 2010 and 2019) and only a modest recovery since, with average nurse pay growing by a little less than 1% over the same 2019–23 period. Doctors also saw pay cuts between 2010 and 2019 (of around 10%) but, unlike teachers and nurses, have also seen their pay fall further in the period since 2019, making them the hardest-hit group of the three.

5. Doctors and teachers, as higher-paid public sector workers, have felt the consequences of compression of public sector pay, with pay deals consistently benefiting lower-paid workers more than higher-paid workers both within and across professions. Compared with 2007, the real earnings of a public sector worker at the 75th percentile (i.e. earning more than 75% of public sector workers) had fallen by 8% by 2023, whereas for a lower-paid worker at the 25th percentile, real earnings had risen by 16%.

I can't see that you've referenced anywhere the gold plated final salary pension schemes the public sector enjoy. That's an enormous benefit that those who work in the private sector can only dream of.

 

[Bozza]

Both Hunt and Reeves can be duplicitous at the same time. And they are. Reeves will get a free pass from most on here though.

IFS analysis is that half of the "black hole" is to finance the public sector pay reviews being awarded, and is absolutely not unfunded commitments inherited from the Tories, as claimed.

And that's the disappointing thing. This government was elected on a promise of honesty with the electorate, and they've broken that already. I have no issue at all with public sector staff getting long-deserved uplifts in pay. I've recently spent every day for three months in Sussex hospitals with my mum, they are staffed by absolute heroes who deserve pay that recognises that.

If you are going to be honest and transparent, you would own that decision and not try to blame unpopular policy, such as the reduction in winter fuel payments, on the Tories.

Very, very poor from Starmer and Reeves.

 

[mikeyjh]

At some point, surely, someone smart in the tory party (yeah, I know) will figure out that perhaps they could stop bringing up Rwanda. That they continue to humiliate themselves with this millstone is quite remarkable. It doesn't even add up FFS, cheaper to keep them here.

 

[Seagull27]

I can't see that you've referenced anywhere the gold plated final salary pension schemes the public sector enjoy. That's an enormous benefit that those who work in the private sector can only dream of.

I'm not sure what that's got to do with relative increases/decreases in pay, compared to 2007 and 2019. Unless the government contributions to those pensions has increased to counteract the stagnation in pay?

No, didn't think so.

 

[Bodian]

Errr, cos they're going to have to pay for it.

Bins collected, roads mended, etc etc - they all cost, and we all have to pay for it.

I can't see that you've referenced anywhere the gold plated final salary pension schemes the public sector enjoy. That's an enormous benefit that those who work in the private sector can only dream of.

My father-in-law worked in the private sector. His pension is higher than anything I will get as a pension. Indeed, his pension plus state pension is not dissimilar to my take-home monthly pay.

Both Hunt and Reeves can be duplicitous at the same time. And they are. Reeves will get a free pass from most on here though.

IFS analysis is that half of the "black hole" is to finance the public sector pay reviews being awarded, and is absolutely not unfunded commitments inherited from the Tories, as claimed.

And that's the disappointing thing. This government was elected on a promise of honesty with the electorate, and they've broken that already. I have no issue at all with public sector staff getting long-deserved uplifts in pay. I've recently spent every day for three months in Sussex hospitals with my mum, they are staffed by absolute heroes who deserve pay that recognises that.

If you are going to be honest and transparent, you would own that decision and not try to blame unpopular policy, such as the reduction in winter fuel payments, on the Tories.

Very, very poor from Starmer and Reeves.

But there was always going to some pay rises for the public sector. The c£10bn appears to be the 'cost' of the pay rises - not the difference in costs proposed between pay rises under Labour & the Tories. So - the 'half the black hole' is a bit of misnomer really. It's only 'half' if you start from the point that the pay rises this year under the Tories would have cost £0.

Or maybe the Tories really were working on the basis that there wouldn't be any pay rises.

 

[Steve in Japan]

I'm not sure what that's got to do with relative increases/decreases in pay, compared to 2007 and 2019. Unless the government contributions to those pensions has increased to counteract the stagnation in pay?

No, didn't think so.

If you don't think total compensation (including pensions) is relevant when making public sector vs private sector pay comparisons, then I can't help you. To be fair, the Labour Party clearly don't think so either.

Here's a clue - you're both wrong.

 

[Nicks]

So MP's on a £91,000 wage can claim up to £3,400 a year for heating bills.
Something morally wrong here

 

[Seagull27]

If you don't think total compensation (including pensions) is relevant when making public sector vs private sector pay comparisons, then I can't help you. To be fair, the Labour Party clearly don't think so either.

Here's a clue - you're both wrong.

We're not making overall pay comparisons though, we're making comparisons in change in pay over a period of time.

Would you be happy if your company didn't give you a pay rise this year, and justified it by saying you already get above average pensions contributions? Or that you already get a yearly bonus perhaps, so you don't need a pay rise?

 

[Couldn't Be Hyypia]

My father-in-law worked in the private sector. His pension is higher than anything I will get as a pension. Indeed, his pension plus state pension is not dissimilar to my take-home monthly pay.

Lucky him. But assessing the pensions of everyone in the private sector based on your FiL is not helpful. I know hundreds of people who work for small businesses who are able to make minimum (statutory) pension payments and no more. There is a MASSIVE wall of UK citizens in the private sector who will have little of no pension provision. It's going to be carnage.

 

[ATFC Seagull]

I can't see that you've referenced anywhere the gold plated final salary pension schemes the public sector enjoy. That's an enormous benefit that those who work in the private sector can only dream of.

Weren't these done away with as soon as Cameron and Osborne came in? They were for teachers. It's still not a bad pension but compared to many I know with private ones it's comparable.

 

[nevergoagain]

Lucky him. But assessing the pensions of everyone in the private sector based on your FiL is not helpful. I know hundreds of people who work for small businesses who are able to make minimum (statutory) pension payments and no more. There is a MASSIVE wall of UK citizens in the private sector who will have little of no pension provision. It's going to be carnage.

Age/Dates are key. So many private employers DID have very generous final salary pensions but you'd be hard pressed to find one now.

 

[beorhthelm]

But there was always going to some pay rises for the public sector. The c£10bn appears to be the 'cost' of the pay rises - not the difference in costs proposed between pay rises under Labour & the Tories. So - the 'half the black hole' is a bit of misnomer really. It's only 'half' if you start from the point that the pay rises this year under the Tories would have cost £0.

Or maybe the Tories really were working on the basis that there wouldn't be any pay rises.

the £9.4bn attributed to public sector pay is the amount on top of that budgeted for, which was about 2.2% pay rise - bascially matching inflation in spring, what Hunt expected/hoped the pay review would come out with. Reeves has decided to go with the 5.5% recommendation instead.

there's another chunk of £8.6bn not talked about, presumably because "normal reserves" is dull, techincal and doesn't give a neat headline. as i gather its to cover unforseen spending, a half billion here, a quarter there. there is also a reported budgeted reserve for £9.2bn though, so that should cover it. on asylum there is no new unknown expediture, and we know they're been dipping into Foreign Aid budget to cover this for years anyway. then there's some rail spending and Ukraine that are promised, known about but apparently not budgeted for - so now less for both of them right? no, they'll still get the funding, they aren't in the cuts section. end of the day, this black hole looks politically manufactured, which is a shame as i have expected Reeves to be a good chancellor.

 

[nevergoagain]

Both Hunt and Reeves can be duplicitous at the same time. And they are. Reeves will get a free pass from most on here though.

IFS analysis is that half of the "black hole" is to finance the public sector pay reviews being awarded, and is absolutely not unfunded commitments inherited from the Tories, as claimed.

And that's the disappointing thing. This government was elected on a promise of honesty with the electorate, and they've broken that already. I have no issue at all with public sector staff getting long-deserved uplifts in pay. I've recently spent every day for three months in Sussex hospitals with my mum, they are staffed by absolute heroes who deserve pay that recognises that.

If you are going to be honest and transparent, you would own that decision and not try to blame unpopular policy, such as the reduction in winter fuel payments, on the Tories.

Very, very poor from Starmer and Reeves.

uh-oh, I hope you've got your tin hat strapped on now.

 

[Bodian]

the £9.4bn attributed to public sector pay is the amount on top of that budgeted for, which was about 2.2% pay rise - bascially matching inflation in spring, what Hunt expected/hoped the pay review would come out with. Reeves has decided to go with the 5.5% recommendation instead.

Thanks. I can't quite work this out though, as I can't seem to find the exact data.

So - what is the actual amount the pay rise will cost? It must be substantially more than £9.4bn if that is the 3.3% difference. But all I can find anywhere is that the pay rise will 'cost' £9.4bn.

 

[ATFC Seagull]

Ultimately it's such a shame that the only possible 2 ways to spend/save money is through public sector wages and fuel allowances for the elderly, therefore pitching these two groups against each other.

If only someone could think of other ways to save or raise money.