Pay Freeze is a Pay Cut
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’.