Shocking new figures have revealed that the public sector pay cap has reduced spending power in Burnley by a massive £83.8m. in the last seven years.
The analysis, published by the TUC union, shows that public-sector workers are earning, on average, £2,695 less today than if their pay had risen in line with inflation.
Burnley’s 5,720 public sector workers – including nurses, teachers and council staff – saw a total real terms pay loss this year of £15.4m.
Burnley MP Julie Cooper said the less money in workers’ pockets would inevitably have a knock-on effect for the local economy with shops and businesses all suffering as a result.
Worryingly, the Labour MP revealed that public sector workers including nurses have told her they are struggling to make ends meet.
She said: “It is very worrying to see these figures, which paint a very stark picture. They are shocking but not surprising.
“The issue is that it is not just individuals or individual families that are struggling because of the pay freeze, but also the local shops, cafes, hairdressers and other businesses they would be spending their money in.
“People are spending less now simply because they have less money in their pockets. Businesses are struggling as a result. Just at the moment we are seeing the pre-Christmas ‘Black Friday’ sales on a scale that we have not seen before.
“Wages simply aren’t keeping up with inflation. I have done case work for single parent nurses who are struggling to feed their children.
“Teachers and teaching assistants are feeling under-valued and abused. This is not right. These people are doing important jobs for society so they should be rewarded properly.
“The public sector pay freeze has also had a drastic effect on recruitment, particularly in the NHS, meaning that nurses and doctors are being over-stretched. No wonder we are struggling to recruit.
Mrs Cooper also said that delays in Universal Credit payments and the scrapping of the student Educational Maintenance Allowance had also had a negative impact on the local economy.
The figures have been released at the same time as an independent think tank claimed that average UK earnings in 2022 could still be less than in 2008.
Paul Johnson, director of the Institute for Fiscal Studies, added that the economic forecasts published in the Budget made for “pretty grim reading”.
Chancellor Philip Hammond said in his Budget speech last week that any pay rises for NHS staff next year – with the 1% cap expected to be lifted – would not need to come from the front-line budget.
Recommendations from pay review bodies on the salaries of some public sector workers will be considered next spring and summer.
But Mrs Cooper said: “There are no cast-iron promises and some public sector workers do not have pay review groups. We ought to be paying people properly.”
The MP said that Labour would clamp down on the very wealthiest organisations and individuals not paying their fair share in tax, and would invest in infrastructure that would increase productivity.
She added: “I was speaking to a local train driver recently who told me the equipment they are using in the north is little past the Victorian age. Productivity is falling and this is partly the reason why.”
Research published by the Institute for Public Policy Research 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.
TUC Regional Secretary for the North West Lynn Collins 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.”