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Philip Hammond: Public servants are paid 'premium' | Philip Hammond: Public servants are paid 'premium' |
(35 minutes later) | |
Public sector workers receive a 10% "premium" over the private sector, said Philip Hammond, who said colleagues should not be leaking cabinet talks. | Public sector workers receive a 10% "premium" over the private sector, said Philip Hammond, who said colleagues should not be leaking cabinet talks. |
The chancellor refused to comment on reports he said at a cabinet meeting that public servants were "overpaid". | The chancellor refused to comment on reports he said at a cabinet meeting that public servants were "overpaid". |
Mr Hammond told Andrew Marr the question of overpayment was "relative" but the 10% premium was a "simple fact" once pensions were taken into account. | Mr Hammond told Andrew Marr the question of overpayment was "relative" but the 10% premium was a "simple fact" once pensions were taken into account. |
John McDonnell said Labour would end the 1% cap on public sector pay rises. | |
The shadow chancellor said his party had set aside £4bn on an annual basis to bring pay in line with inflation. | The shadow chancellor said his party had set aside £4bn on an annual basis to bring pay in line with inflation. |
Pay rises for most public sector workers are set by independent pay review bodies, but have effectively been capped at 1% each year since 2013. | Pay rises for most public sector workers are set by independent pay review bodies, but have effectively been capped at 1% each year since 2013. |
Before that, there was a two-year freeze on pay for all but the lowest-paid workers. | Before that, there was a two-year freeze on pay for all but the lowest-paid workers. |
The government has come under pressure over the policy since the general election, with some Conservative ministers speaking out in favour of lifting the cap. | The government has come under pressure over the policy since the general election, with some Conservative ministers speaking out in favour of lifting the cap. |
On the BBC's Andrew Marr Show, Mr Hammond was asked about a Sunday Times report claiming he had said public sector workers were "overpaid" compared with the private sector. | On the BBC's Andrew Marr Show, Mr Hammond was asked about a Sunday Times report claiming he had said public sector workers were "overpaid" compared with the private sector. |
'Job at hand' | 'Job at hand' |
He said he was not going to discuss what was and wasn't said in a cabinet meeting. | He said he was not going to discuss what was and wasn't said in a cabinet meeting. |
"I do think on many fronts it would be helpful if my colleagues - all of us - focused on the job at hand," he said. | "I do think on many fronts it would be helpful if my colleagues - all of us - focused on the job at hand," he said. |
Mr Hammond said public sector pay had "raced ahead" of the private sector after the economic crash in 2008, and that - when pension contributions were not taken into account - the gap had "now closed". | Mr Hammond said public sector pay had "raced ahead" of the private sector after the economic crash in 2008, and that - when pension contributions were not taken into account - the gap had "now closed". |
But he said public sector employers made "very generous contributions" to workers' pensions, meaning the public sector "are still about 10% ahead" in terms of pay. | But he said public sector employers made "very generous contributions" to workers' pensions, meaning the public sector "are still about 10% ahead" in terms of pay. |