Costs of public sector pay rises

Summary

That this House rejects the claim made in the media by the Prime Minister that it would cost an additional £28 billion to award a pay-rise for all public sector workers in line with inflation; notes that according to economists and fact-checkers the Prime Minister's claim is vastly inflated; further notes that the Institute for Fiscal Studies in its Green Book estimates that pay rises in line with inflation for public sector workers would cost about £18bn and that the Government would, in addition, get around a third of this back in tax revenues reducing the cost further by around £6bn; further believes therefore that such a pay award could cost less than half of the government’s stated £28bn figure; notes that one of the many fair options available for funding such a pay increase in line with inflation would be to equalise Capital Gains Tax rates with income tax rates which would raise up to £17 billion a year; and calls on the Prime Minister to withdraw his claim and to make an offer of a pay award in line with inflation which would be a huge step towards reaching a resolution to avoid further strikes.

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Timeline

1. 14 December 2022

   Early Day Motion

   That this House rejects the claim made in the media by the Prime Minister that it would cost an additional £28 billion to award a pay-rise for all public sector workers in line with inflation; notes that according to economists and fact-checkers the Prime Minister's claim is vastly inflated; further notes that the Institute for Fiscal Studies in its Green Book estimates that pay rises in line with inflation for public sector workers would cost about £18bn and that the Government would, in addition, get around a third of this back in tax revenues reducing the cost further by around £6bn; further believes therefore that such a pay award could cost less than half of the government’s stated £28bn figure; notes that one of the many fair options available for funding such a pay increase in line with inflation would be to equalise Capital Gains Tax rates with income tax rates which would raise up to £17 billion a year; and calls on the Prime Minister to withdraw his claim and to make an offer of a pay award in line with inflation which would be a huge step towards reaching a resolution to avoid further strikes.

   Source: Early Day Motion

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Sponsors

• Richard Burgon · Labour · Primary sponsor

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