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• Parliamentary constituencies in the South West will get an average economic boost of £5.2m if real terms pay cuts since 2010 are reversed
• ‘Protect the pay circle at the spending review, or living standards fall like the last decade’, warns the TUC

TUC analysis published today shows the South West’s economic recovery would be boosted by £288 million if cuts to key workers’ pay are reversed.

The move would make 405,000 public sector workers in the South West better off by helping recover lost wages following the austerity years of pay freezes and real terms pay cuts. 

The analysis by the TUC and Landman Economics further breaks down the gains for each constituency if the Chancellor scraps the planned cuts in his upcoming Comprehensive Spending Review this Autumn (27 October). 

The average economic boost for a parliamentary constituency in the South West would be £5.2 million. Click here for specific data for every parliament constituency.

In total, England’s economy would receive a £3.3 billion boost, based on restoring median public sector pay by 3.2% in line with CPI inflation.

By providing local key workers with proper pay rises says the TUC, the local economy will recover faster and better. This is because workers spend locally which drives the local economy and helps support pay rises for other workers too – thus creating the ‘pay circle’ effect.

As this is a median figure, some workers would need a higher increase to restore the real value of their pay. For example, between 2010/11 and 2020/21:

  • Maternity care assistants’ and nursery nurses’ pay was down by £2,000 (-7.6%)
  • Nurses’ and community nurses’ pay was down by up to £2,500 (-7.3%)
  • Firefighters’ pay was down by £2,600 (-7.4%)
  • Teachers’ (M6, outside London) pay was down by £2,000 (-5.1%)

The TUC also cautions that CPI can underestimate the degree to which the cost of living is rising. And in pay negotiations, RPI is often a better guide.

If the Chancellor restored median public sector pay by 10.1% in line with RPI inflation, it would boost the South West economy by £908 million. 

Pay cuts for public sector key workers in 2021/22

The Chancellor has put in place a pay freeze that is affecting the majority of public sector key workers, such as police, teachers and civil servants.

Some pay offers have been made for some workers.

  • Those currently earning less than £24,000 will receive a pay rise of £250 this year, but this is not permanent and will not be consolidated into their pay going forward.
  • Higher education staff have been offered 1.5%
  • Local government staff have been offered 1.75%
  • And NHS staff have been offered a 3% pay award.

However, many key workers in the public sector remain excluded from these awards.

The pay awards also don’t include outsourced staff such as NHS cleaners and porters where wages are low and out of step with directly employed staff.

With CPI inflation currently 3.2% and RPI inflation currently 4.8% (the costs of goods), many workers are likely to find the value of their pay has been cut again this year.

The TUC says that, in addition to restoring the value cut from pay between 2010/11 and 2020/21, the Chancellor must make sure that in the current year – and the years covered by the forthcoming spending review – pay for all key workers rises each year at least in line with inflation.

We're all part of the same pay circle. 

TUC Regional Secretary Nigel Costley said:

“We’re all part of the same pay circle.

"When key workers throughout the South West spend their pay, it goes straight into other people’s pay packets. Nurses, carers, shop staff, drivers, local businesses – across the economy, we all benefit.

“But it’s up to government to keep this pay circle moving.

"After all that has happened with the Covid crisis, our key workers deserve a proper pay rise. And if it means our local businesses and workers in our communities also benefit, then that's a win-win situation.

“But if the Chancellor attacks the pay circle in his spending review, working people will suffer. And we will see yet another slump in living standards across the whole economy.”

Editors note
  • Combined, England’s economy would receive a total £3.3 billion boost, based on restoring median public sector pay by 3.2% in line with CPI inflation.
  • The analysis models the economic impacts of reversing cuts to the value of public sector pay that took place over the period 2010/11 to 2020/21.

- Economic boost from reversing real-terms public sector pay cuts between 2010/11 and 2020/21


Boost to economy after multiplier: CPI increase (£)

Boost to economy after multiplier: RPI increase (£)

South West






- Constituency data: The full data set showing the economic boost to each parliamentary constituency can be downloaded here.

- Cost to government of restoring public sector pay to the same value as 2010 (net of income tax and national insurance receipts, and universal credit payment reductions)

Rate of pay restoration

Net cost to Exchequer

Boost to economy

CPI – 3.2%



RPI – 10.1%



- Methodology: Landman Economics and the TUC used ONS data on the number of public sector workers in English Constituencies and regional and national data on public sector pay from the Annual Survey of Hours and Earnings (ASHE) to calculate the lost value of public sector pay since 2010, and what would be required to restore its value, using both the CPI and RPI measures of inflation.

Landsman/TUC calculated the economic benefit which each constituency would derive from restoring the value of public sector pay to its 2010 value in real terms using the mid-point of the International Monetary Fund’s (IMF) range of multipliers for government spending (1.3%).

To accurately reflect the economic boost from raising pay, it was necessary to take account of the way Universal Credit payments are tapered down and National Insurance Contributions (NICS) and income tax (IT) go up as recipients pay increases. To do this, Landman/TUC calculated the number of public sector workers in receipt of Universal Credit (UC) in each region, using the Family Resources Survey (FRS). This was used to create an average impact of the credit taper for each region, and which was applied to each constituency within that region (it was not possible to derive data on benefit recipients at a constituency level because the FRS does not hold information below a regional level). They then modelled the impact of increased gross public sector pay on net incomes given UC, IT and NICS.

- Average losses suffered by key workers  

Some workers would need a higher increase to restore the real value of their pay.

For example, between 2010/11 and 2020/21:

  •  Maternity care assistants’ and nursery nurses’ pay was down by £2,000 (-7.6%)
  • Nurses’ and community nurses’ pay was down by up to £2,500 (-7.3%)
  • Firefighters’ pay was down by £2,600 (-7.4%)
  • Teachers’ pay was down by £2,000 (-5.1%)

- Parliamentary briefing: A briefing containing locally relevant data has been sent today to every MP in England. The example linked here is the briefing that has gone to the Chancellor, Rishi Sunak. 

- Child poverty in key worker families: Research published by the TUC earlier this year found that just over a million children in key worker families are living below the poverty line, representing 21% of children in key worker households.

- Spending review: The Chancellor will present a spending review alongside the budget on 27 October. The three-year review will set government department budgets and devolved government block grants for 2022/23 to 2024/25. The budgets that are set will affect the scope for public sector pay and staffing across the period. More information on the spending review is here.

- About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together the 5.5 million working people who make up our 48 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.

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