Pensions changes and pay freeze will harm low paid employees

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A part-time nurse earning £17,000 a year will suffer an eight and a half per cent real terms pay cut by 2012/13 – almost £100 a month – as a result of planned pension increases, the public sector pay freeze and tax changes, according to new TUC research.

While ministers say their proposals would protect low-paid public sector staff from pension increases, this does not include those who, if they worked full-time, would earn more than the government’s £18,000 cut off.

TUC General Secretary Brendan Barber will tell a rally in Exeter in support in public sector pensions later today:

‘The brutal truth is simply this. The burden of deficit reduction is being piled unfairly on to millions of low and medium paid public sector workers who did nothing to cause the crash.

‘Their pay has already been frozen for two years – even though inflation is higher than it has been for over a decade. By April 2012 a part-time nurse on £17,000 a year will have seen her living standards fall by over eight per cent.

‘Meanwhile those who are actually guilty of causing the crash in the finance sector are busy getting back to business and bonuses as usual, escaping the scene of their crimes just as a hit-and-run driver would flee a car crash.

‘This is a gold-standard for unfairness.’

TUC analysis of official earnings statistics for a range of low to medium earners in the public sector show losses from 4 per cent to 10 per cent in living standards from the pay freeze and the increase in pension contributions, even after taking account of tax changes and wider exemptions said by the government to help the low paid.

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