Teachers are to get a 3.5 per cent pay rise and military personnel 2.9 per cent as the government kills off the public sector pay cap.

Bumper increases were announced today for around a million public sector workers - with prison officers getting 2.75 per cent and police 2 per cent.

The end of the 1 per cent pay cap – which has limited annual rises for six years – has been confirmed by the Treasury.

But there are complaints that the money for the salary boosts will have to be found by departments from existing budgets.

Jeremy Corbyn and unions are also still demanding 5 per cent hikes, saying people need to catch up after years of wage stagnation.

Inflation is currently running at 2.4 per cent on the CPI measure.

Defence Secretary Gavin Williamson said he was accepting the 'spirit' of a recommendation from the pay review body for a 2.9 per cent rise for armed forces personnel

Bumper increases: Chancellor Philip Hammond has signed off pay rises for a million public sector workers

Jeremy Corbyn and unions are also still demanding 5 per cent hikes, saying people need to catch up after years of wage stagnation

As details of the settlements emerged today, Defence Secretary Gavin Williamson said he was accepting the 'spirit' of a recommendation from the pay review body for a 2.9 per cent rise.

There will be a 2 per cent increase to salaries, and a one-off payment equivalent to 0.9 per cent of salary. The deal will be implemented in September and backdated to this April.

'Today's pay award will deliver an annual increase to starting salaries of £520 for an officer and £370 for a newly trained solider, sailor or airman or woman,' Mr Williamson said.

'This is in addition to the non-contributory pension and access to incremental pay progression.'

Education minister Nick Gibb said teachers on the main scale will be in line for a 3.5 per cent rise.

He also insisted the money would not come out of the schools budget.

'We will be providing a teachers' pay grant of £187 million in 2018-19 and £321 million to all schools in England in 2019-20,' Mr Gibb said.

'This will cover, in full, the difference between this award and the cost of the 1 per cent award.'

A police award of 2 per cent will mean average pay for a constable will now be more than £38,600 a year.

Prison officers will receive 2 per cent extra on their salaries, and 0.75 per cent as a one-off payment. The Ministry of Justice said that amounted to an average of £1,220 for staff.

A pay increase of at least 2 per cent will be given to junior doctors, specialist doctors, GPs and dentists. Consultants will also get a pay rise of at least £1,150.

Who is getting what as the public sector pay cap ends? ARMED FORCES A 2 per cent increase to salaries, and a one-off payment equivalent to 0.9 per cent of salary TEACHERS A 3.5 per cent rise for those on main scale, 2 per cent for upper pay range, and 1.5 per cent for leadership roles POLICE A 2 per cent rise PRISON OFFICERS A 2 per cent rise to salaries for all staff, and 0.75 per cent one-off payment. Many will be in line for higher awards. Advertisement

Whitehall departments have been told they are allowed to spend more of their budgets on pay.

However, there will be no new money to fund additional increases, meaning any extra pay rises will have to come from efficiency savings or cuts to services.

The raft of pay rises announced in the Commons today comes after nurses were told in March they would get a 6.5 per cent increase over three years.

Schools will continue to determine how their staff are paid but the increases will be funded with a new teachers' pay grant, worth £187million in 2018/19 and £321 million in 2019/20 from the existing Department for Education budget, paid to all schools on top of their core budgets from the National Funding Formula, said the Government.

In cash terms, teachers could receive a boost of between £1,184 and £1,366 to their salary, while salaries for new teachers will increase by between £802 and £1,003.

Chief Secretary to the Treasury Liz Truss said it was the 'biggest pay rise in almost 10 years' for around one million public sector workers.

She told the Commons: 'We were able to announce these pay rises only thanks to the hard work of the British people which has brought down the deficit by over three quarters and allowed us to reach the point where the debt will begin to fall this year. 'We didn't listen to the siren calls from the opposition for damaging splurges, and that's why today we're able to scrap the cap and increase public sector pay.'

She said the pay deals are 'affordable and responsible' while rewarding public servants.

But answering questions after a speech in Birmingham, Mr Corbyn said: 'The reality is that, by lifting the pay cap, there is going to be an increase that is below the rate of inflation, and it is going to be about 0.8 per cent below it. The unions are right that 5 per cent is what is needed for it. We support that.'

Prospect union deputy general secretary Garry Graham said: 'Today's pay deals for the armed forces, prison workers and teachers are welcome but confirm what we have long suspected, this Government have put civil servants firmly at the back of the queue on public sector pay.

'Instead of playing cynical divide-and-rule games with overworked and underpaid public sector workers, the Government should be committing to above-inflation pay rises for all public servants, with no group left behind.'

A police award of 2 per cent will mean average pay for a constable will now be more than £38,600 a year

Health and Social Care Secretary Matt Hancock said the pay rises for doctors and dentists recognised their 'value and dedication' and took into account affordability and the prioritising of patient care.

From October, a consultant starting work in 2013 will have seen a 16.5% increase in their basic pay, rising to a salary of £87,665 from £75,249, it was announced.

Ministers said the pay rises were worth between £1,150 and £1,550 for consultants, between £1,140 and £2,120 for specialty doctors, between £1,600 and £2,630 for associate specialists, between £532 and £924 for junior doctors, and around £1,052 for a salaried GP with a median taxable income of £52,600.

The BMA said it was 'truly astonishing' that the Government had 'ignored' recommendations from the independent pay review body.

Dr Anthea Mowat of the BMA said ministers had also compounded the 'misery' by refusing to backdate what will be an inadequate pay uplift.

'Just last week the new Secretary of State for Health and Social Care talked about how 'heart-breaking' it was to see how 'under-valued' NHS staff feel.

Paul Whiteman, general secretary of school leaders' union NAHT, said: 'School leaders will have mixed views about this announcement. They desperately want to reward and retain their valued staff, and they will be relieved that the DfE will make an additional contribution to the pay award, as school budgets are already at breaking point.

'However, by ignoring the pay review body's advice that all teachers and school leaders need the same pay rise, they have failed to recognise and reward the critical role performed by leadership teams. This will do little to retain valued and experienced senior teachers and leaders. Our members will feel let down by the Government.'

Philip Hammond will confirm the 1 per cent pay cap – which has limited annual rises for six years – has been abandoned

Pay review bodies for each workforce have drawn up the recommendations after looking at variables including the turnover of staff.

The announcement will be popular with public sector workers who have long complained about the cap, but there will be concerns about how the rises will be paid for.

The rise for doctors could mean that millions of pounds from the £20billion NHS funding boost – announced last month to mark the Health Service's 70th anniversary – will go on staffing.

This will dismay many members of the public who had hoped the Government's extra money would go towards frontline care.

A senior GP earns on average £100,000 a year while hospital consultants are typically on £92,000 – which excludes overtime and performance bonuses.

Public sector pay restraint has played a key role in the Government's efforts to clear Britain's huge budget deficit.

It became a major issue at last year's general election when Theresa May was challenged by a cash-strapped nurse during a live TV debate. Earlier this year, Mr Hammond signalled the end of austerity ahead of his Spring Statement when he declared: 'There is light at the end of the tunnel because what we are about to see is debt starting to fall after it's been growing for 17 continuous years.'

However, the Office for Budget Responsibility last week warned austerity may have to continue for at least another 50 years to bring the nation's finances under control.

It said debt will become unsustainable without tax rises or further cuts to spending. It blamed some of the pressure on Mrs May's £20billion NHS boost as well as rising state pension costs and the ageing population – which will require more spending on care.

The OBR said: 'On current policy we would expect the budget deficit to widen significantly over the long term, putting public sector debt on a rising trajectory. This would not be sustainable.'

In a stark 168-page report, the watchdog said the public finances were in a perilous position and urged ministers to consider carefully any further commitments.

Meanwhile, a report yesterday found that the country's tax burden has reached its highest level for almost half a century.

The taxman is set to take £724.9billion this year – 34.3 per cent of GDP. That is the highest proportion since 1969-70, when the country was run by a Labour Government under Harold Wilson.

The report, written by the TaxPayers' Alliance campaign group, also said overall Government revenues are at a 32-year high at 37 per cent of GDP, a measure of the size of the economy.

In total, the Government will raise £775.8billion – which is equivalent to around £28,000 from every household, according to the study.

The research also found that new taxes have hit poorer households the hardest. The bottom 10 per cent of earners in Britain pay 49.5 per cent of their income in tax.