Why is no-one talking about the Tory Tax grab?

29-09-2017

Earlier this month it was widely reported that Theresa May had agreed to a proposed small pay increase for the Police in a move that would effectively scrap the 7 year 1% cap on public sector pay rises.

The headline news was that a 2% increase had been put forward which is behind the current rate of inflation (2.9%) but at least it was a step in the right direction.

But hang on a minute let’s take a closer look at those numbers, firstly it was a 1% rise in 2017-2018 plus a ‘bonus’ only accounted for in the current year meaning next year only the 1% pay rise remains and the ‘bonus’ is exactly that.  (Figure 1)

 Police 1

Figure 1: Police pay increase split

 

You could leave it at that and say ok the government has given 2% this year BUT it’s not that straight forward, hence the headline, bear with me because there are 2 main points that have been missed.

Firstly the 2% has to come out of existing Police budgets, that’s right the government didn’t actually give them a penny more.  The force had budgeted a 1% pay rise but now have the find another £50m via further cutbacks and savings in other areas to fund the other 1%.   From an already tight budget this large an amount can only mean a further restriction on the service that they can offer or headcount reductions from the 126,186 officers currently employed (already 1,143 down from the same time last year according to Government statistics https://goo.gl/Ae8npZ).

Secondly, and this is the real kicker, the government will obviously be collecting tax from the pay increase and bonus that is being paid.  On the average Police Officer salary of £30,577 (according to Payscale https://goo.gl/peoUJi) that will be at the basic rate of 20%.  So out of the 2% pay increase, that the government didn’t fund, they will be taking back 0.4% tax (Figure 2).

Police 2

Figure 2: Government Tax @0.2% x2 = 0.4% back off of the pay increase.


So this means that the pay increase that has been handed out will bring the Tory’s a net benefit of £20m (if 1% pay increase costs £50m 2% = £100m x 20% = £20m).

This in isolation is bad enough but if apply this thinking to the rest of the public sector it will amount to tens if not hundreds of millions that the government it taking back out of existing budgets to line the pockets of the treasury.

Obviously any pay increase can only be a good thing for the public sector workers but we're ‘Calling BULL’ on this being anything other than a PR exercise and a money spinner for Theresa May and the Tories. 

It would be great to see your vote and hear your thoughts over at https://goo.gl/ufikd1 

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