After accepting recommendations from independent pay review organisations, Rishi Sunak approved one of the largest public sector compensation increases in years.
The Prime Minister was pressed to implement pay increases of six to 6.5 percent for 2023/24.
Police officers, NHS workers, junior physicians, jail officers, members of the armed forces, and teachers will all see an increase in pay. The ruling will affect nearly half of all public-sector workers.
The majority of civil servants, however, are not included in the salary increase.
Police officers and prison officers will receive a seven per cent pay rise. A six per cent hike has been given to NHS staff and junior doctors.
Members of the Armed Forces will receive a 5 per cent boost and teachers will take home an extra 6.5 per cent.
The pay increase, which could cost as much as £5billion, was agreed this morning after Sunak met with his Chancellor Jeremy Hunt.
Confirming the pay increase, Chief Secretary to the Treasury John Glen told the House of Commons: “Our decision is responsible because unlike some unsustainable demands we have delivered awards that don’t further fuel inflation and make the inflationary environment worse.
Ministers have been told to make departmental savings to cover the pay increases as the Chancellor ruled out borrowing to fund rises and hiking taxes.
The Prime Minister held a press conference after announcing the public sector pay increase.
Sunak urged union chiefs to call off planned industrial action by accepting the pay offer.
Speaking from Downing Street, he said: “Clearly this will cost all of you as taxpayers more than we had budgeted for… I can confirm today that we are accepting the headline recommendations of the pay review bodies in full.
“But we will not fund them by borrowing more or increasing your taxes.
Sunak stressed today’s pay offers are “final” and there will be no more negotations.
The Prime Minister added: “There will be no more talks on pay. We will not negotiate again on this year’s settlements, and no amount of strikes will change our decision.
“Instead the settlement we’ve reached today gives us a fair way to end the strikes, a fair deal for workers and a fair deal for the British taxpayer.”