“Inflation is below 1% and therefore a proposed 1% pay rise is indeed a pay rise, and that’s simply a matter of fact.”

Matt Hancock, HoC Health and Social Care Committee

March 16, 2021

Facts

Former Health Secretary Jeremy Hunt, now chair of the House of Commons Health and Social Care Committee, asked Matt Hancock about the NHS 1% pay rise. He said: “Does it constitute a real terms pay cut or not? Is there an extra 0.7% on top of the 1%. Could you just explain that one?”

Hancock responded: “Inflation is below 1% and therefore a proposed 1% pay rise is indeed a pay rise, and that’s simply a matter of fact.”

Inflation for 2021/22 – which is the year the pay rise would take effect – was then forecast between 1.5% and 1.8%, with the government’s own Office for Budget Responsibility estimating that inflation would rise to 1.5% in 2021 and 1.8% in 2022. 

Following Hancock’s comments, London Economics said: “When assessing whether the proposed cash pay increase represents a real-terms increase or cut, it is not sensible to compare a proposed cash increase in 2021 with a measure of inflation in 2020.

Making the relevant comparison, and based on forecasts from the independent Office for Budget Responsibility, the proposed 1% pay increase in cash terms being offered by the Government to the 1 million employees covered by the Agenda for Change Framework in 2021 represents a real terms reduction of 0.5%.”

Verdict

While the government has since uplifted the pay offer to 3% (and with inflation forecast to leap ahead even more than that)  Hancock’s initial claim that the 1% pay rise was a real terms increase was questionable.

When we asked Matt Hancock to respond to the claims laid out in this website, a spokesperson said: “This list is false, wildly inaccurate, and in some cases possibly even defamatory. For example claiming that some of Matt's claims in the Commons were in defiance of the ministerial code, when they were in fact accurate. The priority throughout this unprecedented pandemic has been saving lives.” 

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