The Government has continued to defend its controversial recommendation of a 1% pay rise for NHS workers despite growing anger and the threat of industrial action.

Health Secretary Matt Hancock said NHS staff had been “carved out” of a pay freeze affecting other public sector employees.

He told a news conference on Friday evening that the Government had to take affordability into account when considering pay.

He said: “We have set out what is affordable given the very significant challenges in public finances.”

Mr Hancock said the Westminster Government had not followed the administration in Scotland in agreeing a bonus for NHS staff.

His comments came at the end of a day which saw the main nurses’ union setting up a £35 million industrial action fund, and calls for the public to support a slow hand clap next week against the Government’s pay proposals.

The council of the Royal College of Nursing (RCN) said it was determined to have the finances available to its members should they wish to take action.

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It said: “In setting up this fund, the RCN will create the UK’s largest union strike fund overnight. The next steps will be decided in conjunction with our members.”

Health minister Nadine Dorries said earlier that the Government could not afford to give NHS staff in England a pay rise of more than 1%, following the revelation that the figure had been submitted to the sector’s pay review body (PRB).

But Labour leader Sir Keir Starmer said the move amounted to a “real-term pay cut” and called it “nothing short of an insult”.

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In a video posted on Twitter, he said it was the “amazing NHS” who had kept the country “going, kept us safe, and looked after our loved ones” during the pandemic.

“However, this week we learned that the Conservative Government is planning a real-term pay cut for NHS staff. The mask has finally slipped,” said the Opposition leader.

“The NHS protected us, now it’s time to protect them.”

Unite national officer for health, Colenzo Jarrett-Thorpe, told the PA news agency: “Following yesterday’s kick-in-the-teeth announcement that the Government wants to peg NHS pay at 1% for 2021-22, Unite will be considering all its options, including the holding of an industrial action ballot, as our pay campaign mounts in the coming weeks.

“We will be fully consulting our members on the next steps, given that inflation could be 2% by the end of 2021, so what Prime Minister Boris Johnson is recommending is another pay cut in real terms.”

Rachel Harrison, national officer of the GMB union, said: “NHS workers are furious at the Government’s recommendation of a 1% pay increase, published in their evidence to the PRB late yesterday afternoon – six weeks late.

“Ministers have followed this with an even more contemptuous defence of the paltry increase – essentially saying ‘It’s better than nothing’.

“It’s dismissive and insulting to NHS workers who have had an incredibly tough year keeping us all safe.”

Unison urged people to take part in a slow hand clap at 8pm next Thursday against the 1% offer, mirroring the weekly show of support last year for the NHS.

Mel, a staff nurse, said the Government’s proposed 1% pay rise for NHS staff was an “insult” and “hypocrisy in its greatest form”.

She said the increase for her would equate to an extra £3.50 a week.

“We have healthcare staff using food banks, so £3.50 is not going to improve their situation in any way, shape or form,” she added.

“I am angry beyond words both for myself but for my colleagues who I see struggle daily.”