Posted: Wed 8th Feb 2023

Minister warns of “unintended consequences” of hiking taxes to fund NHS pay

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Wednesday, Feb 8th, 2023

The Welsh Government’s revised pay offer for NHS staff “will rub salt in the deep wounds” of workers impacted by a “decade of austerity.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

This week’s strikes by the Royal College of Nursing and ambulance workers represented by GMB were postponed following a movement in negotiations with the Welsh Government. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

An enhanced pay offer has been made to health trade unions, including an additional 3% on top of the Pay Review Body recommendations, which have already been implemented in full. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​ ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​ ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The offer will be backdated to April 2022 and will include a number of non-pay commitments to enhance staff well-being. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​ ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​ ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

This week’s strikes were postponed to allow union members to discuss the latest offer. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

However Plaid Cymru leader, Adam Price MS, has said that “for many in the NHS this real-terms cut of more than four per cent in their pay will rub salt in the deep wounds caused by more than a decade of austerity.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

He added: “You could, couldn’t you, turn that one-off payment of three per cent into a permanent pay rise, again by using a combination of the Wales reserve next year and a reduction in agency spend? ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“Instead of rejecting that now, only to accept it later, why don’t you just do what is right right now?” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The party leader also reiterated his party’s calls for the Welsh Government to explore tax rises to help fund a pay rise for NHS and care workers. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Lesley Griffiths MS

He added: “But you can go further than that, Minister, can’t you, because you do have the ability to raise additional revenue through your tax-varying powers? ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“Now, I understand the Government’s position is that you don’t want to touch the basic rate, but even if you simply matched the increases in the higher and additional rates that are being introduced in Scotland on 1 April—the 42p and the 47p—that would raise £76 million, enough to turn your one-off payment this year into a permanent pay raise. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“And if you were able to use alternative means of doing that, you could use that £76 million instead to raise care workers’ wages to £12 an hour. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“Why don’t you use the powers that you have at this time to do what is right by this group of workers?” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

However Minister for Rural Affairs and North Wales, and Trefnydd, Lesley Griffiths MS, warned of the potential “unintended consequences” of taking this approach. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Ms Griffiths said: “Our position on tax is very clear; any analysis of the levers that are available to us as a Government via the Welsh rates of income tax demonstrates we simply cannot raise enough fairly enough to make good the holes that have been created by the economic crisis and ensure higher pay in our public services. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“People who earn the levels of salary that they would have to earn to pay that higher rate of income tax, they’re not like other people. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“They could just up and leave Wales and move to England, for instance. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“We don’t know what would happen, and I think that is a piece of work that really needs looking at very carefully. I’m really not sure that your judgment on this is correct. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

She added: “We’ve had to prioritise money, we’ve had to look at reserves, we’ve had to look at underspends, and, obviously, as the year goes on, those underspends come to the fore, particularly this time of year. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“We’ve said all along we would have preferred a UK-wide conclusion, really, to this. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“We couldn’t wait any longer for the UK Government to do this. We’ve managed to find a bit more money, and I think that money has been welcomed by the majority of people. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“We’ve already used the next two years’ reserve, so we’ve already done that. What we’ve done in that three per cent additional offer is—1.5 per cent is consolidated, as you said, and the other 1.5 per cent isn’t. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“I have to say that we’re doing this at risk obviously. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“This has been the hardest budget I’ve ever dealt with as a Minister, and I’m sure everybody sitting around me on the front bench would agree ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

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