A minister claimed on Thursday that the “green shoots of recovery” were emerging in Britain as she argued against big pay rises for nurses and other public sector workers.
Health minister Maria Caulfield claimed that large pay rises for public sector workers would fuel an inflation spiral, continuing the cost-of-living crisis.
As tens of thousands of nurses across the country went on their first ever strike, Ms Caulfield rejected their pay demands.
She insisted it could only be funded by taking money from frontline healthcare, raising taxes or borrowing more and risking an economic crisis as sparked by Kwasi Kwarteng’s disastrous mini-budget.
She also talked up the state of the economy, after official figures showed inflation dipping in November, despite the Bank of England having warned recently that the country is facing a two-year recession.
Ms Caulfield told Times Radio: “At a time of high inflation we know that inflation busting pay rises drive inflation further.
“And we have just seen the green shoots of recovery with the figures yesterday that inflation may be on the way down.
“It’s the biggest enemy for every household in this country.
“To agree inflation busting pay rises for nurses would inevitably lead to pay rises like that being asked across the public sector.”
Ms Caulfield’s “recovery” comments echo those of Norman Lamont who as Chancellor in 1991 was seen as prematurely hailing “the green shoots of economic spring”.
Union leaders have made a starting demand for a pay hike for nurses of more than 17 per cent.
But Ms Caulfield, herself a nurse, stressed the “difficult choices” facing the Government on funding big pay rises for public sector workers, such as for nurses.
“We only have three routes to pay for this pay rise,” she added.
“It’s either to borrow more money as a Government, which we saw the results of what happens when you do that just a few weeks, ago, you can’t afford to do that.
“Second, to tax taxpayers more which I don’t think is acceptable at a time of cost-of-living pressures for everyone.
“Or we take it out of healthcare budgets meaning we have less money for frontline stuff.”
She also argued that pay was a “smaller issue” for nurses than long working hours, not finishing on time, not having protected study time like doctors, and trying to get the right skill mix in the working environment so that patient workload is manageable.
Official figures on Wednesday showed inflation falling from 11.1 in October to 10.7 per cent last month.
Former Bank of England deputy governor Sir John Gieve on Wednesday largely rejected the Government’s argument that bigger pay rises for nurses, ambulance crews and other public sector workers would significantly push up inflation.
“The public sector pay increases don’t directly affect prices, on the whole we don’t pay for our health service or police service through prices,” he told BBC radio.
He stressed the key issue was instead how they could be funded given the “formidable squeeze” already on public services’ finances, so bigger pay rises would probably have to be funded by higher taxes or more borrowing.
However, he believes that it is “quite doubtful whether the Government can hold the line on public service pay”.
