ANALYSIS shows the economic recovery in Dorset would be boosted by almost £18 million if cuts to key workers’ pay are reversed, according to a national trade union centre.

The Trade Union Congress (TUC) say the move would also make more than 25,000 public sector employees across Dorset better off by helping recover lost wages following the austerity years of pay freezes and real terms pay cuts.

The analysis, by the TUC and Landman Economics, further breaks down the gains for each constituency if the Chancellor scraps the planned cuts in his upcoming Comprehensive Spending Review this Autumn, which will be published on October 27.

The TUC say that most of Dorset’s constituencies would see a significant boost of over £3 million, with the West Dorset constituencies seeing the greatest gain of £8.5 million due to the higher number of public sector workers in the area.

By providing local key workers with pay rises says the TUC, the local economy will recover faster and better. This, they argue, is because they predict workers would spend locally, driving the local economy and helping support pay rises for other workers too – thus creating a ‘pay circle’ effect.

The TUC also cautions that Consumer Price Inflation (CPI) can underestimate the degree to which the cost of living is rising. And suggest that for pay negotiations, Retail Price Index (RPI) is often a better guide.

If the Chancellor restored median public sector pay by 10.1 per cent in line with RPI inflation, it would boost Dorset’s economy by £56.5 million.

Some pay offers have been made for some workers. However, many key workers in the public sector remain excluded from these awards. The pay awards also don’t include outsourced staff such as NHS cleaners and porters where wages are low and out of step with directly employed staff.

With CPI inflation currently at 3.2 per cent and RPI inflation currently at 4.8 per cent, many workers are likely to find the value of their pay has been cut again this year.

The TUC says that, in addition to restoring the value cut from pay between 2010/11 and 2020/21, the Chancellor must make sure that in the current year – and the years covered by the forthcoming spending review – pay for all key workers rises each year at least in line with inflation.

TUC Regional Secretary Nigel Costley said: “We’re all part of the same pay circle.

“When Dorset’s key workers spend their pay, it goes straight into other people’s pay packets. Nurses, carers, shop staff, drivers, local businesses – across the economy, we all benefit.

“But it’s up to government to keep this pay circle moving.

“After all that has happened with the Covid crisis, our key workers deserve a proper pay rise. And with this our local businesses and workers in our communities would see the benefit. It’s win-win.

“But if the Chancellor attacks the pay circle in his spending review, everyone in Dorset will suffer. And we will see yet another slump in living standards across the whole economy.”