Can my employers actually do this?

[Blueuggboots]

I work for a contract within a very large company.
In April, I was awarded a pay rise. I have a letter from the parent company confirming this. There were no strings attached to the pay rise.
This week, I was contacted by the manager of my contract to say that the parent company have changed their mind and have now decided not to award the pay rise and are taking back the extra money I have earned over the last few months and putting everyone at my level back to our original pay before the pay rise
They have taken £127 out of my wages this month!
Is this even legal??

What does "I work for a contract" mean? Are you an employee, worker or self-employed (this is relevant to what rights you have)? And how long have you been working there?

Well if you continue working for them following this revelation that could be construed as accepting their new terms.

How replaceable are you and how easy would it be to find another job elsewhere? If you refuse to continue working for them unless they honour their letter, will that result in a cheery "bye then", or a grudging capitulation and a toxic working environment that is unpleasant to stay in anyway, or a sheepish and respectful rescindment of their silliness?

I work for the parent company as an employee but it is in an offshoot of the parent company.
I am a professional person.

@HigaDequasLuoff - it would've be toxic as my line manager is as horrified as I am - it's the managers up the chain of command who have decided it, but yes, they would likely say goodbye....

Sorry, that should say it wouldn't be toxic....

How long have you worked there, are you in a union? Check your contract. They may have a clause which says they can reclaim pay mistakes made in error, but that's not the case here as it wasn't an error at the time they paid it, they later decided they'd made the wrong decision.

Call ACAS for advice, but I believe (NAL) they cannot claw back salary paid unless it was paid in error. They CAN cut your salary going forward as long as they inform you in advance, and you can choose whether to accept the new terms or leave, but if they had agreed to pay you X amount for the preceding month then they can't change their minds retrospectively and take some of it back.