£100m lost in Lancaster economy due to pay caps

Lynn Collins TUC
Lynn Collins TUC

The public sector pay cap has reduced spending power in Lancaster and Morecambe by £150m, according to new analysis.

The analysis by the Trades Union Council (TUC) shows that 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 Lancaster and Fleetwood constituency have had £103.9m less to spend in the local economy, the TUC says.

In Morecambe and Lunesdale the figure is £47.6m.

The figures show that there are 7,091 public sector workers in Lancaster and Fleetwood, and 3,253 in Morecambe and Lunesdale.

These include jobs in the district and county councils, the NHS, education, police, fire, and civil service.
Lynn Collins, the TUC’s Regional Secretary for the North West 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.”

There was no mention of public sector pay rises in the government’s budget this week, but the Chancellor Phillip Hammond said the tax free personal allowance 
would rise to £11, 850 from April 2018, from £11,500 in 2017/18.

This has previously risen from £10,000 in 2014/15.

He also announced that the National Living Wage would rise in April 2018 by 4.4 per cent, from £7.50 an hour to £7.83.

Recent TUC polling shows that one in seven (15 per cent) public sector workers skipped meals this year to make ends meet. And one in four (24 per cent) 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.

In Lancashire as a whole, there has been a reduction of £267m, according to the figures.