A Help Or Hinderance?

A spending watchdog advises that the pay in the public sector should be severely restrained, or preferably frozen in order to rebalance finances in the economy.

Steve Bundred of the Audit Commission said those in the public sector would tolerate modest reductions as they have done well recently.

Chancellor Alistair Darling agrees that payment between public and private sectors needs to be fair. But when a policy to limit public pay rises to 2% last year happened, many people walked out of their jobs.

“At a time when inflation is likely to be between 2% and 3%, a pain-free way of cutting public spending would be to freeze public sector pay or at least impose severe pay restraint,” Mr Bundred said.

“This is especially true if real wages in the private sector are still falling.”

Cuts In Health And Education?

He added that in doing so, £5billion of the £50billion needed that would otherwise come out in tax, would be found, also emphasising that health and education spending shouldn’t be shielded from efficiency savings.

“Don’t believe the shroud-weavers who tell you grannies will die and children will starve if spending is cut. They won’t. Cuts are inevitable and perfectly manageable.”

Mr Darling also commented: “Public sector pay obviously has got to reflect prevailing conditions in particular inflation has come way down.

“Of course we have got to be fair with regard to people who work in the private sector, many of whom have seen their pay conditions somewhere near freeze. It has got to be fair to people who work for the public sector just as we have to be fair on the private sector.”

Public sector pay has always been an issue of debate within parliament. The 2% cap in 2008, at a time when living costs were rising harshly were criticised and walkouts ensued.

The Great Debate

Unison general secretary Dave Prentis, said that the government should be focusing on tax evaders and City bonuses, not public sector pay: “Freezing public sector pay during a recession is not the way to steer people through it.

“Let’s be clear, the recession was caused by bankers and speculators and the lack of regulation.

“Low paid public sector workers, who will be helping communities through the recession, shouldn’t be expected to pay.”

Ken Clarke – shadow business secretary, also had something to say about the public sector pay: “When that is put to you by somebody like the head of the Audit Commission, you look t it as an option but you have got to put it alongside other options.

“Look for constraint, you have got to decide whether it is really the best and fairest way of going about it.”

Liberal Democrat Treasurer spokesman Vince Cable also agrees that across-the-board pay freezes in the public sector don’t make a “great deal of sense” due to different contractual obligations.

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