Lets not forget that everyone else in the organisation also has to have a pay increase of similar magnitude. It is inflationary and is going to bite them on the bum big time. I know plenty of people that were earning above minimum wage and were happy about it. Not anymore. They are going to have to have a commensurate increase and the cost is going to be borne by the consumer ultimately. Not a good thing. (Tax take will go up like you say. Tax increases by stealth. No one ever said this Labour govt were not sneaky)