THE GOVERNMENT’S attack on public-sector pay will deliver a £1.7 billion blow to England’s economy, hitting the north hardest, the TUC warned today.

Taking cash out of key workers’ pockets will result in an average £3.2 million economic hit per parliamentary constituency, with a hugely disproportionate effect on northern regions, the union body says.

The TUC’s analysis calculated likely knock-on effects for local economies in the next financial year if Chancellor Rishi Sunak carries out his threat to slash £1.3 billion from key-worker pay settlements.

Of the 30 worst-hit areas, seven would be in the North West, seven in Yorkshire and the Humber, five in the West Midlands and three in the North East, it says.

But changing tack by ensuring every key worker gets a pay rise and increasing the minimum hourly wage to £10 would provide a welcome boost to the economy as it struggles to recover from the coronavirus pandemic.

TUC general secretary Frances O’Grady said: “Key workers have kept the country going through the pandemic. The Prime Minister clapped them, but his applause will ring hollow if he cuts their pay.

“Boosting key-worker pay helps everyone. It puts more money in the pockets of working families, and their spending supports jobs in local businesses and high streets.

“This will help to level up our unequal economy, and it gives key workers the respect they have earned.”

Unison general secretary Christina McAnea said: “The Prime Minister claims he wants to boost the public-sector workforce. Yet hitting wages is going to see more staff leaving, not joining.”