Rishi Sunak’s salary for seven million people… but how will we afford it?

Rishi Sunak’s salary for seven million people… but how will we afford it? Business leaders question where the money will come from after the chancellor pays higher salaries to public sector employees, amid fears that private sector employees will be angry

  • Rishi Sunak said, more than 70 lakh employees will get salary increase in the budget
  • The Chancellor announces that the new budget will reward public sector employees
  • He also said that there will also be an increase in the minimum wage, which will increase the income of the lowest wage earners.
  • It comes as the country faces an estimated £400bn bill for the Covid crisis










Tomorrow’s budget will increase the salary of more than 70 lakh employees.

Rishi Sunak It was declared last night that it was right to pay higher wages to public sector employees as the economy was ‘strongly on track’.

About 5.6 million employees, including nurses, teachers and members of the armed forces, will increase from April when the one-year wage freeze ends.

On Monday, Rishi Sunak announced that he will lift the moratorium on public sector salaries that was imposed last year due to the pandemic.

Also, the minimum wage will increase from £59p to £9.50, increasing the income of the lowest-paid two million.

The chancellor insisted that his plans would provide ‘a stronger economy’.

But there were immediate questions about where the money would come from in a country facing an estimated £400 billion bill for the Covid crisis and the Treasury already promised billions of pounds of spending.

Business chiefs warned that a hike in the minimum wage could hit struggling firms and fuel concerns over inflation.

And campaigners said the increase in public sector wages could lead to a life-threatening crisis for private sector workers.

Police officers are among the public sector employees expecting a pay hike

Police officers are among the public sector employees expecting a pay hike

The announcement came as follows:

  • Mr. Sunak denies lowering VAT on household energy bills – but urged rethinking to ease pressure on struggling households;
  • With the moratorium on fuel duty being extended, petrol firms were accused of duping motorists as average pump prices hit an all-time high;
  • Ministers refused to set a target of when the NHS’s vast backlog would be cleared, despite billions of pounds of fresh spending;
  • Critics accused the chancellor of driving the ‘nail in the coffin’ of the high streets by delaying plans to change commercial rates;
  • Mr. Sunak was reprimanded by the Speaker of the Commons for briefing several details ahead of yesterday’s budget;
  • Labor’s Rachel Reeves warns voters are facing bills by recording them without getting better public services;
  • Experts have warned that wage hikes could be ‘cheated’ by rising inflation, rising electricity bills, petrol price and threat of livelihood crisis.

Mr Sunak announced last night that he would lift the moratorium on public sector wages that was imposed last year due to the pandemic.

The increase was halted for all taxpayer-funded workers, with the exception of the NHS and workers earning less than £24,000.

Mr Sunak said last night: ‘The economic impact and the uncertainty of the virus meant we had to make the difficult decision to freeze public sector pay.

‘And now, with the economy firmly back on track, it is fitting that nurses, teachers and all other public sector workers who played their part during the pandemic get an increase in their salaries.’

Wages for most frontline workforces are determined through an independent wage review body process. Its recommendations will be announced next year.

Mr Sunak also announced yesterday that the minimum wage for those over 23 would be raised to £9.50.

The Chancellor said the increase, which will go into effect in April, would mean the full-time worker on the lowest salary would receive a salary increase of more than £1,000 a year before tax.

About 5.6 million employees, including medical workers, teachers and members of the armed forces, will see an increase from April, when the one-year wage freeze ends.

About 5.6 million employees, including medical workers, teachers and members of the armed forces, will see an increase from April, when the one-year wage freeze ends.

The 6.6 percent increase is more than double the consumer price inflation rate of 3.1 percent.

For those aged 21 and 22, the minimum wage will increase from £8.36 an hour to £9.18, while for apprentices the figure will be £4.30 to £4.81 an hour.

But Mike Cherry of the Federation of Small Businesses said the increase should be “matched by support from those who will struggle to keep jobs”.

Jane Grattan of the British Chambers of Commerce said: ‘Many firms are facing cash flow crunches due to rising energy costs, high raw material prices, high debt levels as a result of the pandemic and increased taxes.

So while businesses support the minimum wage, the size of this increase – with less than six months’ notice – will be a cause for significant concern.’

Torsten Bell of the Resolution Foundation, a standard of living think-tank, said ‘rapid’ rising inflation would eat away at two-thirds of most workers’ benefits.

John O’Connell of the Taxpayers Alliance said: ‘Many people’s lives, jobs and businesses were affected by the pandemic, so it is unfair for those same people to pay for protected public sector jobs.’

Questions about where the money will come from with the country facing an estimated £400bn bill for the Covid crisis

Questions about where the money will come from with the country facing an estimated £400bn bill for the Covid crisis

advertisement

.