Today Frank Field, MP for Birkenhead, introduces an amendment to the Finance Bill to secure justice for low paid public sector workers.
In Budget 2010, George Osborne, the Chancellor of the Exchequer, announced to Parliament:
"The Government is asking the public sector to accept a two-year pay freeze. But we will protect the lowest paid...They will each receive a flat pay rise worth £250".
In so doing the Chancellor aimed to protect public sector workers earning less than £21,000, the number of which he estimated to equal 1.7 million people.
This protection however has not been universally applied. Low paid public sector workers are not all in receipt of an extra £250 this year.
Frank Field's amendment, if selected by the Speaker, will reduce the tax liability of all public sector workers, whose earned income does not exceed £21,000 in this financial year, by £250.
In a recent Parliamentary answer to Frank Field the Government have stated that this protection only covers workforces under Ministerial control and those with pay review bodies. Not only was this not made clear at the time of the statement, the figures the Chancellor quoted in his speech do not stack up to scrutiny.
Research commissioned by Frank Field from the House of Commons Library shows that the Chancellor in his statement could not have been referring only to workers under Ministerial control and those with pay review bodies. The Chancellor's figure of 1.7 million equalled the total number of public sector workers in 2009 (the then most recent data). The most reliable estimate for the number of public sector workers under Ministerial control or with pay review bodies is 715 thousand - 42 per cent of the Chancellor's figure.
Frank Field's amendment is supported by senior Labour MPs David Blunkett, John Mann and John McDonnell.
The most recent data, for 2010, shows that 2.2 million public sector employees earn less than £21,000. Upper-end calculations, based on 2010 earnings data, show that this reform will cost HM Treasury £500 million in lost income tax.
Frank Field said:
" ‘We are all in this together' has been the constant refrain of the Coalition Government. Yet here is a policy which could not be further away from this aim. Yet again it is the lowest paid workers in our society who are suffering.
"Today MPs have the opportunity to secure the deal George Osborne made with low paid public sector workers in his first Budget. I hope they embrace the opportunity and vote for the amendment."
In 2008 Frank Field led the 10p tax campaign against Gordon Brown's decision to scrap the 10 per cent starting rate of tax which, to pay for a reduction of 2p in the standard rate, led to 5.3 million households being financially worse off.