Labour’s employment rights review paves way for £5.5 billion a year pay rise for social workers

A review of Labor’s employment rights will pave the way for a £5.5 billion pay rise for care workers, an analysis has found.

A forecast prepared by Department of Health officials earlier this year showed that the total cost could rise to £24 billion over the course of this parliament.

Sir Keir Starmer, the Labor leader, is determined to secure a fair pay deal in the sector, under which state-backed collective bargaining would take place between unions and social service providers.

Under the Workers’ Rights Bill, those working in the social care sector will be given the right to collective bargaining over pay.

Senior Labor figures have argued that the policy would boost wages for social care staff and reduce reliance on foreign workers who have been granted visas to fill huge shortages. If it proves successful, those working on the policy say it could be expanded to other sectors.

The Department of Health forecast, which was drawn up before the election, is based on a new carer salary of £15 per hour. Unions have previously said this is the minimum adult social workers should be paid.

Last night the government distanced itself from the analysis, saying it was based on “incorrect” assumptions and did not reflect its policies.

Jeremy Hunt, the shadow chancellor, said: “This simply confirms what we already knew. Labour’s fake black hole is self-created, and any decision to raise taxes at the Budget will be a result of their own choices.

“The real scandal is that, despite planning these tax increases all along, they didn’t have the courage to admit it to the public during the election campaign.”