Disclaimer. I am not a lawyer. If any of this sounds like legal advice, it is not. Any references I may make to UK laws are just based on my understanding. This answer is provided as guidance to help you make a decision on what to do next. If you decide the next step is to take any legal action, then I suggest you consult an employment lawyer first.
A lot of what you said will come down to your contract. An employer cannot make changes to your contract as and when they want to. So if your contract says you get paid £50k per year, they cannot suddenly decide you will get paid £40k a year instead.
However, that doesn't really do you any favours. The reason is because what an employer can do is to terminate your contract and offer you a new one instead (with any salary they want). Then it falls on you to decide if you want to accept that contract (and keep working for them), or decline it (and become unemployed).
Now, if they did terminate your contract, they would need to give a good reason. Depending on the reason, you may or may not have a legal case... if this happens, consult an employment lawyer.
Unfortunately for you, it sounds like you were given a 12-month contract (which you accepted). This has now expired and they do not need to give you any reason at all why they do not want to renew it. You accepted that contract, and now it is over.
What they have done is to offer you a new contract, with what sounds like the same terms as your old role. Effectively what is happening is your job (12 month) is over, you no longer have a job, they are offering you a new job.
So what happens when someone offers you a job? You decide if you want to take it. You decide if the terms are acceptable to you. And perhaps, you decide if you want to negotiate different terms (including pay). If you have a lot of knowledge about this system they will need, this might give you leverage. Or they may just stand firm and say "take it or leave it".
So in short, you don't have much in the way of protection. You decide if you want the job or not, and you decide if you want to try and negotiate more money or not. Just like you would if you applied for a new job somewhere else.