Regional Public Sector Pay – The Government’s Hidden Agenda

This is a repost of my 20/5 blog. Vince Cable claimed this morning that he’s killed off the plans for lower regional pay, but George Osborne is still ‘gathering information’ until late July. In my opinion, the government still intends to press ahead with its plans on this issue, though it may be trying to set Cable – the one LibDem who occasionally gives them a headache – up for a fall. In any event, as it’s even more apparent that cost-savings and helping the economy are purely ‘blinds’ for the real ideological and self-enriching motives, I thought it merits a repost. We need to be aware of what they’re doing, why they’re really doing it and the reasons to oppose it, and to spread good information. So, here goes:

The Tory faction of the coalition government, fronted by the woeful Francis Maude of ‘keep petrol in your garage’ fame (how out of touch the Tories are is wonderfully demonstrated by the fact he just assumed everyone has a garage!), is ramping up its noise about ‘market-facing’, or regionally variable, pay for public-sector workers.

Its rationale – at least the one they’ll tell you about – seems to be that because wage-rates are lower in some areas than others, it doesn’t need to pay as much – and that it would be better to pay less as this would somehow make it easier for private sector companies to grow because they won’t have to pay as much to ‘win’ employees. This will supposedly result in economic growth while also cutting public sector costs – and all without an adverse impact on services.

Sounds magic – if you’re a natural Tory voter in highly-paid private employment in an area that’s not heavily reliant on public-sector employment. But do the arguments stack up – or is the reality that no matter where you live or what you do, this idea – like so many others of this ‘government’, is a bad one? It’s a very, very bad one. Here are some of the reasons why:

1) It’s morally wrong

Public-sector pay-rates were negotiated on a national basis, and rightly so. The work public employees do is not less valuable, nor somehow easier, in areas with lower average earnings. Quite the contrary. Let’s take the NHS as an example. My wife is a nurse on a chest ward and comes home after every shift absolutely exhausted from the non-stop, heavy-duty, emotionally-harrowing work on a ward that’s chronically understaffed in spite of regular reports from staff to management that the workload is so heavy that patient safety is at risk. Poorer areas tend to have higher rates of chronic illness and shorter life-expectancy. People get sicker, more often, and develop limiting illnesses earlier in life. It’s plain wrong that doctors, nurses and other health staff should work as hard as and harder than their counterparts in wealthier areas, and be paid lower rates just because they happen to be in the North or another poorer area. National pay-scales should not be sacrificed for opportunism or for some ideologically-driven ‘reform’ that is going to lead to anything but an improvement.

Outside the health sector, the same principles apply. Policing isn’t any easier – poor areas tend to have higher crime rates. And so on – you get the picture. The government can’t possibly be ignorant of all this, but it’s working hard to spin the story another way to fool the broader electorate.

2) It doesn’t work

In fact, not only doesn’t it work, it’s extremely counter-productive. As the government should be learning by now (but isn’t), if you want to have economic growth you can’t do it by reducing the money that’s in the collective national ‘pockets’. Doing so is not just bad for the individuals who then have less money and struggle to get by. It’s bad for businesses, bad for communities, bad for the country. If you put more money in the pockets of low earners, they’ll spend pretty much all of it. They have to. So money to the poorer has a disproportionately high positive impact on the economy. But conversely that means that for every penny you take out of an low-to-average earner’s pay packet, you lose far more than a penny from the economy. People under pressure, fearful for their income, their jobs and their future can’t spend anything they don’t absolutely have to.

On top of this, even if people didn’t tend to hoard cash when they’re hard up, reducing people’s incomes doesn’t reduce the deficit. It makes the deficit worse. People earning less pay less tax, so public coffers get emptier. They buy less, so businesses sell less, and so they employ fewer people, reducing the tax-take even further and placing more strain on budgets as those people have to relay on welfare. Those same businesses make lower profits and therefore pay less tax. The whole thing becomes a vicious circle – government worsens a situation that then gets worse still, and so on.

3) It WILL and MUST impact on service quality

There’s an evident misconception in the ‘arrogant posh boy’ party that the best way to get the rich to work harder is to pay them more, while the best way to make the poor work harder is to pay them less. As much as anything else they’ve done and said, this shows the government to be hopelessly out of touch with the real life that is faced by ordinary people who aren’t born into the privilege Dave, Gideon & co assume is their natural right. (If they’re not ignorant, they just don’t give a toss – take your pick, really!)

The fact of the matter is that with the constrained and reducing resources available to public sector workers, many already feel stretched to breaking point. People feel undervalued, overstressed, exploited and – especially – unappreciated by managers/executives more concerned with politics and keeping ConDem politicians happy than with enabling the people under them to deliver genuinely acceptable service, let alone the outstanding service that people really need. Inevitably, motivation is suffering – public workers are only human. The government raid on public sector pensions (which they won’t value in case they turn out to be ample to cover pension cost) has already reduced disposable income. Experienced employees are leaving because of stress and disillusionment. Reducing pay rates will be a straw the size of a steel girder that will break the back of many – and will rightly be judged as an insult added to the many injuries already suffered by people that the government is trying hard to demonise in order to get away with what it wants to do. Strikes and other types of industrial action are inevitable – and will be absolutely justified if this plan is pushed through.

I could list a lot more, but I want to keep this to something like a readable length. I believe that the flaws & consequences of the whole ‘market-facing’ pay idea are so big, so unmissable, that this government is perfectly well aware of them. It convinces me that the hidden aim is to pick a fight with the public sector for political and ideological reasons – and as an excuse to accelerate the rush to privatisation of services by moving it from the currently necessary disguised/backdoor route to an overt, shameless, propaganda-justified stampede. But that’s a topic for another blog post…

3 responses to “Regional Public Sector Pay – The Government’s Hidden Agenda

  1. Totally agree. There seems to be a concerted attack on the public sector by this government. Quote we are all in it together but I have seen nothing about reducing MP pensions or salaries.
    Still as a leopard doesnt change its spots neither does a tory government change its attitudes.

  2. Pingback: Cameron’s staggering hypocrisy on the living wage | skwalker1964·

  3. Pingback: A horror short: if the UK lost the NHS and looked like the US | skwalker1964·

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