Member

One salient and growing cause of the problem is the sheer size of the public sector and the barely noticed drift upwards in grading, which increases pension costs. In 2016, before the Covid pandemic, there were 420,000 civil servants. Today, there are 550,000, and the numbers are growing. The generous salary increases awarded in 2024 at a cost of £9 billion, without a productivity link, have boosted public sector pension liabilities. My noble friend Lord Elliott of Mickle Fell rightly talked last week of “two-tier” Britain, with public sector pay growth in the three months to November of 7.9%—more than double the private sector, at 3.6%.