No more bailouts to fund public sector pay rises, cabinet ministers warned
Warning issued to cabinet ministers over public spending rules
- Labour Chancellor Rachel Reeves is tightening public spending rules, warning cabinet ministers they can no longer easily access Treasury reserves for public sector pay increases.
- Chief Secretary to the Treasury, James Murray, has informed ministers that access to reserves will only be granted in exceptional circumstances and any funds received must be repaid.
- This measure is part of preparations for the upcoming Autumn Budget, aiming to control government finances amidst predictions of a significant £50bn gap in Labour's sums.
- The new policy comes after Labour previously offered above-inflation pay rises to public sector workers to end strikes, a strategy now facing renewed pressure from groups like junior doctors.
- Ministers seeking Treasury assistance will need to demonstrate they have exhausted all other options for savings and cuts, with any allocated funds requiring repayment over successive years.