End the public sector pay cap

End the public sector pay cap

Frances O’Grady on why the pay freeze is bad for workers and the economy

Nurses working full-time in our NHS shouldn’t need to rely on foodbanks to feed their families. But we know that a growing number of them do.That dedicated public servants are facing such hardship is an indictment of today’s Britain, and of a government that has been holding down public sector pay for the last seven years.

Our research shows that public sector workers’ real wages in 2017 are down thousands of pounds a year compared to 2010.Prison officers, paramedics and NHS dieticians are all down over £3,800 a year. Firefighters have lost nearly £2,900 and teachers are down about £2,500. The losses stretch across the public sector and have serious implications for working people, and for our economy.

The public has turned against the government’s unreasonable 1% pay cap. According to our polling, more than three-quarters of voters —including 68% of Tories— support giving public servants a pay rise, even if it means tax increases. It’s time for the government to admit that it got it wrong. 

Not just the frontline

This year, terrible events have shown how brave and dedicated the people in our public services are, from the police who responded to terrorist attacks in London and Manchester, to the firefighters who risked their lives in Grenfell Tower, to the doctors, nurses and paramedics who cared for survivors.

The government is rightly under pressure to give these workers a long-overdue pay rise. But we must make sure that the change isn’t restricted to frontline staff. The public sector is a team. If a police officer cracks a case, he relies on the forensic work of backroom staff. If a doctor saves a life, it’s because she can rely on a well-administered and fully stocked hospital.

In recent months, I’ve spoken to the medical clerks, ambulance call operators, teaching assistants and administrators who keep our public services running. They care about their work and want to make a difference, but too many of them are struggling to pay the bills.This inevitably translates into problems with staff morale, recruitment, and retention. Working people can only take so much. If we don’t offer reasonable wages and conditions to our public servants, they’ll be forced to look elsewhere for work.That’s why all our public servants, whether they work on the frontline or in the backroom, need a fair pay rise.

Can we afford it?

Already, Tory ministers are having doubts about the pay restriction; Boris Johnson, Michael Gove, Jeremy Hunt and Justine Greening have all spoken out against it. But the chancellor, Philip Hammond, has dug his heels in, insisting that we can’t afford to pay our public servants a fair wage.

This is nonsense. The IFS has found that increasing the pay of public servants in line with inflation would cost £4.1bn a year. That sounds like a lot, but is actually equivalent to just 1% of departmental spending. If we factor in the opportunities created by increasing pay, the cost falls even further.

Whatever Hammond says, the reality is that the public sector pay cap is fiscally irresponsible. This pay squeeze — the longest since Victorian times — is dragging down growth. It’s reducing consumer spending power, particularly outside of London, and contributing to a debt bubble of worrying proportions.

So increased spending on public sector salaries shouldn’t be seen as pouring money into a black hole. Rather, it’s a modest investment that, by increasing the spending power of five million public servants, will promote growth right across the economy.So the question isn’t ‘can we afford to raise public sector pay?’ but rather ‘can we afford not to?’

A clear mandate

The government has a clear mandate for a public sector pay rise, and ultimately, it’s up to them to figure out how best to pay for it. But what we’re clear on is that the costs can’t fall on other areas of the public service, such as local councils, the NHS or schools. These services are already under immense pressure, and can’t take anymore.

There is no one-size-fits-all solution to public sector pay. The sensible approach is to ditch the artificial and inadequate 1% cap and let different public sector industries negotiate their own wage increases. This would involve appointing genuinely independent pay review bodies.

And at the end of the day, this change won’t break the bank. Because public servants aren’t asking for a windfall, they’re simply asking for pay justice. If the government wants to offset another living standards crisis, they had better listen.

Frances O’Grady is General Secretary of the TUC