Public sector pay freeze will end, chancellor to announce in budget
Millions of nurses, teachers and members of the armed forces will receive a pay rise next April as Rishi Sunak unfreezes public sector pay in the budget.
In his second pay giveaway in 24 hours, after announcing a rise in the national living wage, the chancellor confirmed he is ending a one-year COVID freeze imposed last November.
The size of the pay rises will depend on recommendations from independent pay review bodies, which set pay for frontline workforces including nurses, police, prison officers and teachers.
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What can we expect from the budget?
The Treasury says the government will be running a full pay round and the awards will be announced next year once ministers respond to the pay review bodies’ recommendations.
Announcing his latest budget pay boost, Mr Sunak said: “The economic impact and uncertainty of the virus meant we had to take the difficult decision to pause public sector pay.
“Along with our Plan for Jobs, this action helped us protect livelihoods at the height of the pandemic.
“And now, with the economy firmly back on track, it’s right that nurses, teachers and all the other public sector workers who played their part during the pandemic see their wages rise.”
The chancellor says his temporary pay pause in November helped protect jobs at a time of crisis during the pandemic, but also ensured the gap between public and private sector pay did not widen further.
The Treasury also says that despite the public sector pay freeze, more than a million NHS workers received a 3% pay rise in 2021/22, meaning an average nurse will now receive around an additional £1,000 a year.
Mr Sunak signalled that pay rises for public sector staff were on the way in a Sunday TV interview when he said he would set out a “new pay policy” in his budget on Wednesday.
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Minimum wage increase criticised
Asked if public sector workers could expect pay increases, the chancellor said: “That will be one of the things that we talk about in the spending review.”
According to the Treasury, public sector average weekly earnings rose by 4.5% in 2020/21 while private sector wage increases were a third lower than they were pre-pandemic, at only 1.8%.
But the government claims that despite the one-year break, most public sector workers will still see their earnings rise and their weekly earnings have increased by an average of 3% since April.
The news on public sector pay follows the Treasury’s announcement that the national living wage will increase from £8.91 to £9.50 an hour from next April, an extra £1,000 a year for a full-time worker.
Young people and apprentices will also see their wages boosted as the national minimum wage for people aged 21-22 goes up to £9.18 an hour and the apprentice rate increases to £4.81 an hour.
The living wage increase was the latest in a blizzard of pre-budget announcements by the Treasury in recent days which provoked an explosion of anger in the Commons from Speaker Sir Lindsay Hoyle.
“At one time ministers did the right thing if they briefed before a budget – they walked,” he told MPs with his voice trembling with rage.
As MPs shouted “resign!”, Sir Lindsay went on: “Yes absolutely, resign. It seems to me we’ve got ourselves in a position that if you’ve not got it out five days before it’s not worth putting out.
“It’s not acceptable and the government shouldn’t try to run roughshod over this house. It will not happen!”
Follow budget coverage live on Sky News on Wednesday with the chancellor’s announcement from 12.30pm
Over a third of people think Rachel Reeves exaggerated economic bad news in the run-up to the budget – twice as many as thought the chancellor was being honest, a new Sky News poll has found.
Some 37% told a YouGov-Sky News poll that Ms Reeves made out things were worse than they really are. This is much higher than the 18% who said she was broadly honest, and the 13% who said things were better than she presented.
This comes in an in-depth look at the public reaction to the budget by YouGov, which suggests widespread disenchantment in the performance of the chancellor.
Just 8% think the budget will leave the country as a whole better off, while 2% think it will leave them and their family better off.
Some 52% think the country will be worse off because of the budget, and 50% think they and their family will be worse off.
This suggests the prime minister and chancellor will struggle to sell last week’s set-piece as one that helps with the cost of living.
Some 20% think the budget worried too much about help for older people and didn’t have enough for younger people, while 23% think the reverse.
The poll found 57% think the chancellor broke Labour’s election promises, while 13% think she did not and 30% are not sure. Some 54% said the budget was unfair, including 16% of Labour voters.
And it arguably gets worse…
This comes as the latest Sky News-Times-YouGov poll showed Labour and the Tories are now neck and neck among voters.
The two parties are tied on 19% each, behind Reform UK on 26%. The Greens are on 16%, while the Liberal Democrats are on 14%.
This is broadly consistent with last week, suggesting the budget has not had a dramatic impact on people’s views.
However, the verdict on Labour’s economic competence has declined further post-budget.
Asked who they would trust with the economy, Labour are now on 10% – lower than Liz Truss, who oversaw the 2022 mini-budget, and also lower than Jeremy Corbyn in the 2019 election.
The Tories come top of the list of parties trusted on the economy on 17%, with Reform UK second on 13%, Greens on 8% and Lib Dems on 5%. Nearly half, 47%, don’t know or say none of them.
Only 57% of current Labour voters say the party would do the best job at managing the economy, falling to 25% among those who voted Labour in the 2024 election.
Some 63% of voters think Ms Reeves is doing a bad job, including 20% of current Labour voters, while just 11% of all voters think she is doing a good job.
A higher proportion – 69% – think Sir Keir Starmer is doing a bad job.
Paul Atkins, chair of the US Securities and Exchange Commission, said that the agency can continue advancing digital asset regulation without legislation from Congress, signaling his expectations for the industry in 2026.
In a CNBC interview released on Tuesday, Atkins said the SEC was providing “technical assistance” as Congress considered legislation for digital asset regulation, likely referring to the market structure bill working its way through the US Senate. Atkins said that although the agency’s operations were impacted by the longest US government shutdown in the country’s history, he continued to make progress on “rules that are focused on helping [the crypto] sector.”
“We have enough authority to drive forward,” said Atkins. “I’m looking forward to having an innovation exemption that we’ve been talking about now. We’ll be able to get that out in a month or so.”
Atkins, whom the US Senate confirmed to chair the SEC in April after his nomination by US President Donald Trump, has taken steps to reduce the number of enforcement actions against crypto companies, including by issuing no-action letters for decentralized physical infrastructure networks.
His actions align with many of the policy directives from the White House under Trump, who has issued several executive orders touching on crypto and blockchain.
Related: Republicans urge action on market structure bill over debanking claims
The SEC chair rang the opening bell at the NYSE on Tuesday, outlining his plans for the agency “on the cusp of America’s 250th anniversary.”
US regulators are still awaiting progress on a market structure bill
Lawmakers on the US Senate Agriculture Committee and the Senate Banking Committee are taking steps to move forward with a digital asset market structure bill, which will outline the regulatory authority of agencies, including the SEC and Commodity Futures Trading Commission, over cryptocurrencies.
Senate Banking Chair Tim Scott said that the committee planned to have the bill ready for markup in December.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
An official from the Bank of Russia suggested easing restrictions on cryptocurrencies in response to the sweeping sanctions imposed on the country.
According to a Monday report by local news outlet Kommersant, Bank of Russia First Deputy Governor Vladimir Chistyukhin said the regulator is discussing easing regulations for cryptocurrencies. He explicitly linked the rationale for this effort to the sanctions imposed on Russia by Western countries following its invasion of Ukraine in February 2022.
Chistyukhin said that easing the crypto rules is particularly relevant when Russia and Russians are subject to restrictions “on the use of normal currencies for making payments abroad.”
Russia banned the use of cryptocurrencies for payments in the summer of 2020.
Chistyukhin said he expects Russia’s central bank to reach an agreement with the Ministry of Finance on this issue by the end of this month. The central issue being discussed is the removal of the requirement to meet the “super-qualified investor” criteria for buying and selling crypto with actual delivery. The requirement was introduced in late April when Russia’s finance ministry and central bank were launching a crypto exchange.
Related: UK sanctions Kyrgyz banks, $9.3B crypto network tied to Russia
What is a super-qualified investor?
The super-qualified investor classification, created earlier this year, is defined by wealth and income thresholds of over 100 million rubles ($1.3 million) or an annual income of at least 50 million rubles.
This limits access to cryptocurrencies for transactions or investment to only the wealthiest few in Russian society. “We are discussing the feasibility of using ‘superquals’ in the new regulation of crypto assets,” Chistyukhin said, in an apparent shifting approach to the restrictive regulation.
Related: How a Russian national allegedly laundered $530M in crypto via Tether
Russia’s fight against sanctions
Russia has been hit with sweeping Western sanctions for years, and regulators in the United States and Europe have increasingly targeted crypto-based efforts to evade those measures.
In late October, the European Union adopted its 19th sanctions package against Russia, including restrictions on cryptocurrency platforms. This also included sanctions against the A7A5 ruble-backed stablecoin, which EU authorities described as “a prominent tool for financing activities supporting the war of aggression.”
Earlier in October, reports indicated that A7A5 — backed by the Russian ruble but issued in Kyrgyzstan — had become the world’s largest non-US-dollar stablecoin. In August, the US Treasury’s Office of Foreign Assets Control also redesignated cryptocurrency exchange Garantex Europe to its list of sanctioned entities for a second time.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
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