From the TUC

Pay Freeze is a Pay Cut

22 Jun 2010, by in Labour market, Public services

George Osborne’s announcement that public sector workers will face a two-year pay freeze will be met with wide-spread consternation. To expect 4.3m hard working public servants to take a pay freeze at a time when, as IDS report, Britain’s directors have just pocketed an inflation busting increase of 7% , on top of a 22.5% hike in bonus payments, beggars belief.

Let’s be clear – when you factor in inflation, this isn’t a pay freeze, its a pay cut.

Even those earning below the Chancellor’s £21,000 threshold will be landed with an effective pay cut. For those earning £21,000 a year, the Chancellor’s proposed £250 represents an increase of less than 1.2%. RPI currently stands at 5.1%, and whatever inflation target you look at, 1.2%  for each of the next two years will represent a fall in income – and living standards – for 1.7m of our lowest paid public sector workers.

Whichever way you cut it, its clear Britain’s public sector workers won’t agree with the Chancellor’s claim that this budget represents a ‘burden shared’.

2 Responses to Pay Freeze is a Pay Cut

  1. Tweets that mention Pay Freeze is a Pay Cut | ToUChstone blog: A public policy blog from the TUC —
    Jun 22nd 2010, 1:27 pm

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  2. Tabatha
    Jun 22nd 2010, 11:30 pm

    For somone on more than 32k a pay freeze wont be too hard, but for people on 21k to 26k it will be!
    My company already had a pay freeze last year and then this year the rise was just 1%.
    Pension contribution increases, vat goes up and so do prices.It’s been like treading water to keep head above the water over and over, and now we know it will go on for another 2 year , if not more!
    Wanted to save up to change career and re train, but never going to happen.