Giving evidence to the Health Select Committee, he said that because inflation is below 1%, the proposed hike is an increase.
When asked why it was 1% when the NHS 10-year plan made a 2.1% provision for annual pay increases for NHS workers, he said: “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.”
Pressed on whether it was a pay increase or a real-terms pay 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.”
But a Royal College of Nursing spokesman said: “The Government is digging in despite public anger and clear support for NHS staff.
“In the middle of a pandemic, ministers cannot justify giving just £3.50 extra per week to nursing staff.”
The Government has faced a furious outcry after calling for a headline increase of just 1% in its submission to the NHS pay review body.
Ministers have argued that it was all that could be afforded following the massive hit to the public finances caused by the pandemic at a time when most public sector workers were facing a pay freeze.
Labour has accused the Government of “breaking their promise” to health workers.
Mr Hancock also told the committee that the operational cost of the pandemic for the NHS will be covered by the Government.
When asked by the Health Select Committee about the extra £7 billion the NHS needs for Covid-related costs, Mr Hancock said working out the cost of the pandemic for the NHS was complicated.
But he said the issue will be resolved soon, and added: “We have been clear we will find the Covid costs and just working out exactly what they are is complicated, not least because you have to see where we are in the pandemic.
“Thankfully we are in a far better place in the pandemic than we were in November when the Spending Review was settled, nor indeed in January or February.
“So working out the exact operational costs will be published shortly but what all parts of the NHS know is the direct operational costs of Covid will be covered.”
The Health Secretary also told the committee that the clinical and operational independence of the NHS will be enshrined in the new legislation being brought forward.
A Government white paper published earlier this year proposes giving the Health Secretary greater control over NHS England as part of a wide-reaching reorganisation of health and social care.
But Mr Hancock said the NHS’ “clinical and day-to-day independence and that will be enshrined in the approach that we take”.
But he told the Health Select Committee that the health service needed to be flexible enough to respond to circumstances on the ground.
Mr Hancock added: “The Bill is being framed in order to allow more flexibility, especially at a local level, so they can respond to circumstances and can work together according to the needs of local areas.”
Mr Hancock also said integration within the NHS and cutting bureaucracy will improve patient care.
He told the Health Select Committee: “There’s a lack of integration long, long bemoaned between the NHS and social care which over the last year we have managed to improve significantly, but still there are barriers in law preventing them working together as best they possibly could.
“Then, on busting bureaucracy, there’s currently barriers to giving high-quality patient care.”
Mr Hancock said this was due to the inability to share data “properly and appropriately” and clinicians spending too much time on bureaucratic work rather than patient care.
He also told the committee that the Government was proposing to take back the power to implement water fluoridation across the country.
Community water fluoridation in England is when fluoride has been added to bring it up to around 1mg of fluoride per litre of water which is a level found to reduce tooth decay levels, according to the NHS website.
Mr Hancock added: “There are very clear public health advantages to the fluoridation of water.
“It is very, very good for dental health.
“We are proposing to take responsibly back up to the national level.”
When asked if the intention was to roll it out nationwide, Mr Hancock said: “Yes.”