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Rishi Sunak has hinted he will ignore recommendations for public sector pay rises, saying workers “need to recognise the economic context we are in”.

Reports surfaced over the weekend that the prime minister planned to block upcoming proposals from public sector pay bodies in an attempt to tackle soaring inflation in the country.

And health minister Helen Whately refused to commit to the uplift during an interview with Sky News on Monday morning.

Unions and opposition parties have hit out at the rumoured decision, saying inflation was not being driven by the wages of nurses and teachers, but by the economic decisions taken by the Conservatives over their 13 years in power.

Politics live: ‘Seriously?’ – Labour responds to lack of commitment on pay rises

Last week, the Office for National Statistics confirmed inflation was stuck at 8.7% and the Bank of England raised interest rates to 5% – a 15-year high.

Asked by broadcasters today whether public sector pay was a major driver of that inflation, Mr Sunak said: “Government borrowing is something that would make inflation worse, so the government has to make priorities and decisions about where best to target our resources.

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“And that’s why when it comes to public sector pay, we need to be fair, but we need to be responsible as well.”

Pay review bodies or PRBs take evidence from across sectors like the NHS and education each year, as well as submissions from government, before saying what wage rises should be introduced for the following 12 months.

Amid anger from unions about the figures failing to match inflation last year, Health Secretary Steve Barclay insisted it was right for ministers to “continue to defer to that process to ensure decisions balance the needs of staff and the wider economy”.

The PRBs’ recommendations are expected to be published next month, alongside formal pay offers, with reports claiming they could be around 6% for the health service and 6.5% for teachers.

But while being questioned on public sector pay, Mr Sunak said: “It is important that we don’t make the inflation situation worse and it is important we prioritise the things that are right.

“I am making the decisions that are right for the long term and that is what I am going to continue doing.”

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TUC general secretary Paul Nowak accused the government of “playing politics with working people’s incomes”, adding: “It risks permanent economic harm – and will undoubtedly damage recruitment and retention of staff in our vital public services.

“Instead of blaming workers who can’t afford to put food on the table or petrol in their cars to get to work, ministers should focus on a credible plan for sustainable growth and rising living standards.”

The joint general secretary of the National Education Union, Kevin Courtney, also claimed Mr Sunak was “laying the groundwork for a further real-terms pay cut and one that flies in the face of the recommendations of the pay review body”, demanding the reviews be published as soon as possible.

Labour’s shadow health secretary, Wes Streeting, did not commit to his party accepting the recommendations were they to win power at the next election, but he did say he wanted PRBs “back up and running with the full confidence of everyone involved”.

He added: “It is not working people that have driven our economy off the cliff, it is the Conservative Party. We are still paying through the nose for that disastrous mini-budget that all of those Conservative MPs cheered on.

“People are paying through the nose on their mortgages, paying through the nose with their bills going up and their weekly shop, paying through the nose with rising energy bills, and Britain is an outlier when you look at other economies.

“That’s why we need a serious plan to get growth back into the economy.”

Government pay position offers Labour opportunity and challenge


Tamara Cohen

Tamara Cohen

Political correspondent

@tamcohen

The government’s wavering position on NHS pay presents Labour with both an opportunity and a challenge.

On the plus side, they can point to the fact the position of ministers seems at odds with what they were saying back in December.

Then, the government argument went that it was not for them to decide how much nurses, teachers, or police officers should be paid because this is determined by independent pay review bodies.

Now, they are suggesting the opposite – with health minister Helen Whately the latest to refuse to commit to following recommendations if the government judges they are not affordable.

Labour’s Emily Thornberry was withering in her interview with Sky News this morning: “I mean, seriously – do they really have a policy at all?”

Highlighting government inconsistency on political issues of this sort is exactly what you would expect an opposition party to do.

But it’s not entirely straightforward for Labour. They know there are questions that follow which could be challenging for the party.

Would they commit, for example, to following all pay review body recommendations in power?

Around half of public sector workers are covered by them (civil servants are not), but they are not binding, although Conservative governments have ignored their recommendations more than Labour did in power.

And given Labour agrees with the government that inflation needs to come down, and agrees with the Bank of England that interest rates needed to rise – how comfortable will they be supporting potentially inflationary public sector pay hikes?

The reports come while strike action by junior doctors over pay and conditions continues, with unions planning a five-day walkout next month.

Calling for pay restoration equating to a 35% rise, the British Medical Association (BMA) said wages had decreased by more than a quarter since 2008 when inflation was taken into account, and many doctors were burnt out from an increasing workload.

But when asked why he wouldn’t pay the profession more, the prime minister hit out at the industrial action and called the BMA’s demands “totally unreasonable”.

Mr Sunak said: “I think everyone can see the economic context we are in, with inflation higher than we’d like it, and it is important in that context that the government makes the right and responsible decisions in things like public sector pay.

“It is very disappointing that junior doctors have taken the decision that they have done. Over half a million people’s treatments have already been disrupted and I don’t think anyone wants to see that carry on – it’s just going to make it harder to bring waiting lists down.”

He added: “And I think people need to recognise the economic context we are in, and I am going to make the decisions that are the right ones for the country.

“That’s not always easy, people may not like that, but those are the right things for everybody, that we get a grip on inflation, and that means the government not excessively borrowing too much money and being responsible with public sector pay settlements.

“That is what I am going to do and I would urge everyone to see that is the right course of action.”

Labour’s Mr Streeting said he understood the “pain junior doctors are feeling in their pockets”, and while pay restoration for doctors could not happen “overnight”, staff understood that – and it was for Mr Sunak to fix it.

“I think the important thing is the prime minister has now got to grip this and get around the negotiating table to negotiate an end to this strike action,” he added. “Because every time we see strikes in the NHS we see delays and cancelled operations.

“The real risk to the NHS now isn’t just that staff walk out for another five days of strike action, but they walk out of the NHS altogether.

“If Rishi Sunak can sit there for an hour negotiating gongs and peerages for Conservative Party donors, supporters and MPs, he can sit around the table for an hour with junior doctors and put patients out of their misery.”

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Gary Neville hits out at national insurance rise – and makes prediction for Manchester United’s season

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Gary Neville hits out at national insurance rise - and makes prediction for Manchester United's season

Gary Neville has criticised the government’s national insurance (NI) rise this year, saying it could deter companies from employing people and “probably could have been held back”.

The former Manchester United and England footballer-turned business owner, who vocally supported Labour at the last election, employs hundreds of people.

But he expressed his frustration at the recent hike on employers’ NI, which has significantly increased the taxes businesses have to pay for their employees.

Speaking to Sky News’ Business Live, Neville said: “I honestly don’t believe that, to be fair, companies and small businesses should be deterred from employing people. So, I think the national insurance rise was one that I feel probably could have been held back, particularly in terms of the way in which the economy was.”

While the Sky Sports pundit thought the minimum wage increase introduced at the same time was necessary to ensure that people are paid a fair wage and looked after, he made it clear the double whammy for businesses at the start of April would be a challenge for many companies big and small.

“I mean look it’s been a tough economy now for a good few years and I did think that once there was a change of government, and once there was some stability, that we would get something settling,” he said. “But it’s not settling locally in our country, but it is not settling actually, to be fair, in many places in the world either.

“I don’t think we can ever criticise the government for increasing the minimum wage. I honestly believe that people, to be fair, should be paid more so I don’t think that’s something that you can be critical of. I do think that the national insurance rise, though, was a challenge.”

Read more:
The industries hit hardest by national insurance hike
Survival guide: How to offset national insurance contributions hike

Neville’s business interests are diverse, spanning property development, hospitality, media, and sports.

He co-founded GG Hospitality, which owns Hotel Football and the Stock Exchange Hotel, and is involved in Relentless Developments, focusing on building projects in the North West. He is also a co-founder of Buzz 16, a production company, and a partner in The Consello Group, a financial services company.

The tax increase is expected to raise £25bn for the Treasury, with employers having to pay NI at 15% on salaries above £5,000, and up to 13.8% on salaries above £9,100.

The rise has already led the Bank of England to warn that it is contributing to a job market slowdown.

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NI and tariffs pile pressure on firms

Governor Andrew Bailey warned last month that “the labour market has been very tight in the past few years, but we are now seeing signs that conditions are easing, employment growth is subdued, and several indicators of labour demand and hiring intentions have softened”.

The government has defended the tax increase, announced by Rachel Reeves in last year’s budget and implemented in April, arguing that the money was needed to pay for public services like the NHS to help bring down waiting lists.

‘Can’t get any worse’ for Man Utd

Neville conceded that turning beleaguered football club Manchester United around could prove more difficult than trying to bring about substantial economic growth.

The side finished 15th last season – its worst performance in the history of the Premier League.

“Yeah, that could be a bigger challenge than the economy… I think the two signings are good signings yet, there’s a couple more needed,” Neville said of his former club’s fortunes.

“I think they need a goalkeeper. And I think if they fill those two positions with decent signings, then United can have a lot, I mean, they have to have a better season than last year. It can’t get any worse, really.”

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English cricket goes into bat with bulk of £520m Hundred windfall

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English cricket goes into bat with bulk of £520m Hundred windfall

English cricket’s governing body will on Wednesday hail a landmark moment for the sport when it announces that three-quarters of the deals to bring in new investors to The Hundred have been completed.

Sky News understands that the England and Wales Cricket Board (ECB) plans to issue a statement confirming that it has received proceeds from the sale of stakes in Birmingham Phoenix, London Spirit, Manchester Originals, Northern Superchargers, Southern Brave and Welsh Fire.

The two other franchise deals – involving the Oval Invincibles and Nottinghamshire’s Trent Rockets – will be completed on October 1, the ECB is expected to say.

One insider said a statement was likely to be issued on Wednesday, although they cautioned that the timing could slip.

When all eight deals are concluded, they will generate a collective windfall of £520m for the sport’s strained coffers.

Last week, Sky News revealed that unresolved talks between India’s richest family and Surrey County Cricket Club – which hosts the Oval Invincibles Hundred team – were threatening to delay the delivery of a vast windfall for the sport.

One of the outstanding issues relates to the name under which the Oval Invincibles will play in future years, with the Ambani family keen to use a derivative of the Mumbai Indians brand that it also owns.

More on The Hundred

This week’s announcement will come after months of talks after the ECB and the eight Hundred-playing counties agreed exclusivity periods with their preferred investors.

The backers include some of the world’s most prominent financiers, billionaires and technology executives.

Following protracted talks, the ECB has agreed to revised terms with the investors, with host venues now retaining control of their teams’ intellectual property rights.

The investors will also hold an effective veto over future expansion of the Hundred, while the ECB will be barred from launching any other short-form professional version of the sport while the Hundred remains operational.

Meanwhile, the governing body will retain full ownership of the competition itself as well as controlling the regulation of it and the window within which it can be played each year.

The ECB has been waiting for investors in the eight franchises to sign participation agreements since an auction in February, which valued the participating teams at just over £975m.

Some of the deals involve the investors owning 49% of their respective franchise, while India’s Sun TV Network has taken full ownership of Yorkshire’s Northern Superchargers.

The proceeds of its stake sales will be distributed to all of English cricket’s professional counties as well as £50m being delivered to the grassroots game.

The windfalls are being seen as a lifeline for many cash-strapped counties which have been struggling under significant debt piles for many years.

The most valuable Hundred sale saw a group of technology tycoons, including executives from Google and Microsoft, paying about £145m for a 49% stake in Lord’s-based London Spirit.

This year’s tournament kicks off next week with fixtures including a clash between the two London-based franchises.

The ECB declined to comment.

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Italian restaurant chain Gusto on brink of administration

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Italian restaurant chain Gusto on brink of administration

The intense financial pressure facing Britain’s casual dining sector will be underlined this week when Gusto, the Italian restaurant chain, falls into administration.

Sky News has learnt that Interpath Advisory is preparing a pre-pack insolvency of Gusto, which trades from 13 sites.

Sources said that a vehicle set up by Cherry Equity Partners, the owner of Latin American restaurant concept Cabana, was the likely buyer.

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It is expected to take over most of Gusto’s sites although some job losses are likely.

A deal could be announced in the coming days, according to insiders.

The collapse of Gusto, which is backed by private equity investor Palatine, follows a string of increasingly heated warnings from hospitality executives about the impact of tax rises on the sector.

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Kate Nicholls, who chairs UK Hospitality, said this month that the industry faced a jobs bloodbath amid growing financial pressure on operators.

This week, Sky News reported that the restaurant industry veteran David Page, a former boss of PizzaExpress, was raising £10m to take advantage of cut-price acquisition opportunities in casual dining.

Mr Page is planning to become executive chairman of London-listed Tasty, which owns Wildwood and dim t, and rename it Bow Street Group.

A placing of shares in the company is likely to be completed this week.

Interpath declined to comment on the Gusto process.

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