Following the news that the Treasury is considering to freeze public sector pay, increase income tax and end the triple lock on state pensions in order to pay for the COVID-19 crisis; unions and tax experts have spoken out calling this move as “immoral” as key workers will be negatively impacted by these moves.
An official document outlining the possible steps the Government may take to cover the cost of the fallout from COVID-19 has emerged. This has left the Government in a challenging situation not to break one of Prime Minister Boris Johnson’s election promises to freeze income tax, VAT or national insurance over the next five years.
As the freeze in public sector pay has immediate consequences for certain key workers, this announcement has been met with plenty of criticism.
Dave Prentis, general secretary of public sector union Unison said:
To even contemplate pay freezes for those currently putting their lives on the line is disgraceful. NHS workers, care workers and other key workers don’t need their pay freezing – they need proper pay rises, especially after the heroism of recent months. Anything less would be a slap in the face to those we applaud each week.
Mike Clancy, union general secretary of Prospect said:
Slashing the wages of the public servants who have helped us through this crisis would not only be immoral, it would only make the situation worse, leading to a spiral of cuts and unemployment that will hamstring Britain for a decade. Ministers must ignore these proposals and focus government attention on saving jobs, supporting incomes and getting the economy firing on all cylinders once it is safe to do so
Miles Dean, head of international tax at Andersen Tax UK said:
With large numbers of the population now, or soon to be, on their financial knees, the Government’s plans to prolong lockdown and extend the furlough regime until the end of October, is bad enough. The idea that there will be imminent tax rises to fund the economic consequences of lockdown is not a welcome prospect and one hopes the Government’s plans in this regard are better than their response to the pandemic.
Rishi Sunak, Chancellor of the Exchequer in response to paying for the COVID-19 bill said:
It is my job to think about everything, but what we are thinking about foremost at the moment is protecting people’s health – which is why it is still important that we have a plan in place for social distancing – but also to protect people’s jobs and support businesses at this time, to make sure we can preserve as much of that a possible for the time when restrictions are lifted and we can get our lives back to normal.