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2 August 2022

How the gap between public and private sector pay has grown

A proposal by Liz Truss would have further depressed public sector wages that have fallen in real terms since 2010.

By Ben Walker

Under the guise of a “war on Whitehall waste”, Liz Truss unveiled – and then swiftly abandoned – a plan to reduce public sector pay by up to £8.8bn outside London and the south-east of England.

In practice, the plan would have meant lower pay for 74.5 per cent of those working in the public sector.

Since 2010 private sector pay (seasonally adjusted, excluding arrears) has risen by 42 per cent. Public sector pay has risen by just 26 per cent. In real terms, public sector wages have fallen by 4.4 per cent since 2010, while private sector wages have risen by 4.3 per cent. The gap has grown each year and has widened significantly since the Covid-19 pandemic began.

[See also: Can “Trussonomics” work?]

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