The Treasury has been blamed by the UK’s official statistic watchdog for using numbers in the row against striking workers in the public sector.
Government grappling with Industrial strike on multiple frontsAs the cost of living soared, so did railway workers, nurses, postal workers. They went on strike to demand better working conditions and wages.
Ministers criticism For claiming that public sector wage increases demanded by trade unions would cost the economy £28 billion – or £1,000 per household in the UK.
Many organizations, including Full Fact and the Institute for Fiscal Studies, have challenged the numbers and the accounts used for accessing them.
Last week, Angela Eagle, Labor MP weight in the debate Ask Sir Robert Chote, the head of Statistics UK to verify the numbers.
The former minister stated that she believed the figures were “inaccurate” but that the government was using “deliberately exaggerated number”.
Statistics UK now believes that the calculations “include many judgments and assumptions that other may wish to discuss”.
In his response to Eagle, Chute wrote: “As a number of commentators — including those from the Institute for Fiscal Studies and Full Fact — have pointed out, these calculations involve a number of judgments and assumptions that others may wish to discuss, including the choice to adjust for inflation, whether The effect of increased tax and National Insurance payments by public sector workers would be included, and whether it would be appropriate to state the average amount across all households when the effect would be different depending on household income and other factors.
“Given all the assumptions and judgments involved, it would be desirable…for the government explain clearly and in an easily accessible form how this salient number was calculated once it has been placed in public domain, allowing MPs or commentators to discuss the matter in an informed manner from the beginning.
“My office has contacted the Treasury Department to make these points.”
When the government came close to justifying its calculations, it said it looked at the total cost of public sector salaries for the period 2021-2022, which came to £233 billion.
It then increased that by around 5% to reflect payment deals for 2022-23, which gives a figure of £245bn.
The government analysis then subtracts 11% from this number, which is the latest CPI inflation rate for October.
That brings the total to £27 billion, with another £1 billion coming from “assumptions about wage skew and labor force growth”.
The £28 billion is then divided among the 28 million households in the UK, giving £1,000 to each household.
However, the BBC calculated that the numbers were too high.
It took a public sector pay bill of £233bn combined with an inflation rate of 10% for 2022-23, which means raising wages in line with inflation would cost around £23bn in total and £820 per household.
Eagle responded to the statement by telling HuffPost UK that he was delighted to see Statistics UK engage with Treasury to remind them about the importance of transparency, accountability, and especially in relation to figures that are based on questionable “assumptions or judgments”.
As the authority has made clear, the Prime Minister’s assertions that a public sector salary increase would cost an additional £28 billion have been fabricated by calculations based on a number of misleading ‘assumptions and judgments’.
Estimates released by the Institute for Fiscal Studies put the cost of increasing public sector wages in line with inflation to be around £13bn – far less than the widely imitated government figure.
“It is evident that the government makes erroneous assumptions in its calculations to increase the numbers for political gain.”
She added that “It is crucial that the government and prime Minister be trusted to use accurate figures based on sound evidence.”
When asked for comment, a Treasury source pointed to the existing accounts and stated that they were published in response to a question from Parliament.
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