Public Sector Workers Facing 'Hefty Real Pay Cuts', Warn Economists

Institute for Fiscal Studies says Rishi Sunak is a "fiscal illusionist" who claims to be lowering taxes while actually letting them rise.
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Public sector workers are facing more “hefty real pay cuts” as a result of Rishi Sunak’s spring statement, experts have said.

The Institute for Fiscal Studies (IFS) said the chancellor had offered public services “no extra cash at all” to cope with higher inflation.

“It will almost certainly mean some more hefty real pay cuts across the public sector, coming on top of cuts both in real terms and relative to the private sector over the last 12 years,” the think tank said on Thursday.

Paul Johnson, the director of the IFS, also accused Sunak of being a “fiscal illusionist” by claiming to be lowering taxes while actually allowing them to rise.

“Taxes are set to rise to their highest level as a fraction of national income since Clement Attlee was prime minister,” he said.

“Sunak’s statement contained big new tax cuts. But it also allowed taxes to rise.”

The chancellor’s spring statement has been criticised for failing to go far enough to protect living standards.

The Office for Budget Responsibility has said living standards face their biggest fall in a single year since records began in the mid-1950s.

The IFS said a median earner, on around £27,500 a year will be about £360 worse off in the next financial year than in the current year. While someone earning around £40,000 will be around £800 worse off.

In face of the criticism, Boris Johnson promised this morning “do more” to help families struggling with rising prices and bills.

The Resolution Foundation think tank has also warned 1.3 million people – including 500,000 children – will be pushed into absolute poverty as soaring inflation outstrips increases in pay and benefits.


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