The chancellor has hinted that she may give public sector workers above-inflation pay rises this summer.
Rachel Reeves' comments come after independent pay review bodies recommended an increase of 5.5% for teachers and some NHS workers.
In her first interview from No 11 Downing Street, she said: "I really value public service workers, in our schools, in our hospitals, in our police as well...
"There is a cost to not settling, a cost of further industrial action, and a cost in terms of the challenge we face recruiting."
But Ms Reeves told Sunday with Laura Kuenssberg that "we will do it in a proper way and make sure the sums add up" - emphasising that her spending rules are "non-negotiable".
The new chancellor promised a decision on public pay this month, saying "people won’t have long to wait".
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https://www.bbc.co.uk/news/articles/c4ng5n0my0zo