Scrap­ping pub­lic-sec­tor pay cap is af­ford­able, re­search claims

Western Mail - - NEWS -

THE gov­ern­ment is fac­ing in­creased pres­sure to scrap the cap on public­sec­tor pay af­ter re­search con­cluded that chang­ing the con­tro­ver­sial pol­icy would be cheaper than pre­vi­ously thought.

The IPPR think-tank said a sig­nif­i­cant amount of any money used to lift the pay cap would be re­turned to the Trea­sury al­most im­me­di­ately in the form of higher tax re­ceipts and lower wel­fare pay­ments.

The cost of in­creas­ing pub­lic-sec­tor pay in line with CPI in­fla­tion over the next two years would be £5.8bn.

But this falls to £3.5bn once higher re­ceipts from in­come tax and Na­tional In­sur­ance and lower wel­fare pay­ments are taken ac­count, the study found.

Higher spend­ing in the econ­omy would re­duce the fig­ure fur­ther – to £3.3bn by the end of the 2019/20 fi­nan­cial year, said the re­port.

The GMB union, which sup­ported the re­search, said the find­ings proved that lift­ing the seven-year­long into pay cap was af­ford­able.

Na­tional of­fi­cer Re­hana Azam said: “The last ob­jec­tion to pro­vid­ing de­cent pay rises was af­ford­abil­ity but this re­search shows that al­most half that cost would be re­turned to tax­pay­ers and could be rein­vested in pub­lic ser­vices.

“Re­cruit­ment and re­ten­tion prob­lems are im­pair­ing pub­lic ser­vices as staff are pushed to break­ing-point. The pub­lic-sec­tor pay pinch is hurt­ing but it isn’t work­ing.

“It is a moral out­rage that in one of the world’s rich­est economies pub­lic-sec­tor work­ers are left home­less, skip­ping meals and re­ly­ing on food banks.”

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