Health Secretary Matt Hancock has insisted the government’s proposed 1% salary increase for NHS staff is a “pay rise” and not a real-terms cut – despite forecast inflation of 1.5%.

Ministers are under pressure over their pay offer for health workers who have battled through the COVID crisis.

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Amid the anger at the government’s recommendation to an NHS pay review body, the nurses’ union has set up a multi-million pound strike fund in a warning of possible industrial action.

Mr Hancock was quizzed about the row when he appeared before the House of Commons’ health and social care committee on Tuesday.

Jeremy Hunt, the committee’s chair and Mr Hancock’s predecessor as health secretary, asked why the 1% offer was made when the NHS 10-year plan made a 2.1% provision for annual pay increases for health workers.

Mr Hancock replied: “I am a huge fan of and supporter of the workforce right across the NHS who have done an incredible job through the pandemic, absolutely extraordinary.

“The NHS was carved out of the pay freeze that has been applied due to the enormous pressure on the public finances, that has been applied to everyone else in the public sector.

“We put in place evidence reflecting what is affordable and we of course will study what the pay review body says.”

Asked whether the 1% increase represented a pay rise or a real-terms cut, Mr Hancock added: “Inflation is below 1% and therefore a proposed 1% pay rise is indeed a pay rise and that’s simply a matter of fact.”

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The CPI measure of inflation stood at 0.7% in January – and 0.9% across 2020 – but the Office for Budget Responsibility (OBR) has forecast the CPI rate will reach 1.5% this year.

Responding to Mr Hancock’s comments, Labour’s shadow health secretary Jonathan Ashworth said: “Matt Hancock knows full well that with the OBR expectations for inflation, he is imposing a pay cut on NHS staff in a pandemic.

“Ministers should take this pay cut off the table and start talks with staff on a multi-year pay deal that reflects their worth and address recruitment and retention in the NHS.”

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