Below-inflation pay increases for NHS workers could deliver £335m hit to North East and Yorkshire economies

The TUC has today warned that if ministers impose below inflation pay settlements of 3 per cent on NHS workers, they will deliver “a hammer blow” to the local economy, resulting in a hit of £335m to the North East and Yorkshire’s spending power.

In 2021, NHS workers received a 3 per cent pay settlement. Ministers have asked the NHS pay review body to recommend a similar award this year. Unions warn this will fall well below the cost of living, with inflation running at 9 per cent.

The TUC has modelled household spending power in the event of a projected 3 per cent pay rise for NHS workers, and compared it with household spending power if NHS workers were offered a pay rise that keeps pace with the cost of living.

As well as a £335m hit to the North East and Yorkshire’s spending power, England faces a “whopping” £2.1bn loss of economic activity as a result of wages failing to keep pace with inflation, according to the union body.

The TUC warns that stagnant wages have played a major role in the “crippling staff shortages” that vital NHS services are facing. The union body is calling for decent pay rises for all public service workers to at least match the cost of living and begin to restore earnings lost over the last decade.

TUC Northern regional secretary Liz Blackshaw commented: “Our brilliant key workers in the NHS helped get Britain through the pandemic. But many are now at breaking point, struggling to afford the basics and put food on the table.

“After a brutal decade of wage cuts and freezes overseen by successive Tory governments, NHS staff have been pushed to the brink by skyrocketing bills. Miserly pay offers will only be swallowed up by runaway prices.

“Any offer that falls below the cost of living will be a hammer blow to staff morale, especially as staff shortages continue to cripple vital services, and many NHS workers may choose to vote with their feet. Below-inflation pay offers would not only be bad for workers and our NHS, but for our economy too.

“It’s time the government started to undo the damage of the past decade. That means giving all our key workers the decent pay rise they are owed.”

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