Unions have dismissed as “fantasy politics” a report calling for an end to national pay bargaining and the introduction of performance-related pay. The report, Local Pay, Local Growth, released today by the right-wing think-tank Policy Exchange complai …


Unions have dismissed as “fantasy politics” a report calling for an end to national pay bargaining and the introduction of performance-related pay.

The report, Local Pay, Local Growth, released today by the right-wing think-tank Policy Exchange complains that national pay bargaining means public servants earn an average of 7% more than those working in the private sector.

And it says slashing public sector pay to private sector levels would save £6.3bn a year – money, it says, would be better spent tackling unemployment or creating 288,000 private sector jobs.

But unions were quick to question the validity of the figures used in the report, saying it was a politically-motivated witch-hunt against the public sector.

TUC general secretary Brendan Barber said: “This is fantasy politics based on flawed research and wholly driven by ideology.

“Comparing jobs in the public and private sector is notoriously difficult. Real experts such as Incomes Data Services, who do not have a right-wing axe to grind, dispute the claim that a public sector pay premium exists.

“And it is sheer fantasy to think that pay cuts for public sector staff in poorer parts of the UK would be used to generate private sector jobs in the same region. The Treasury would simply grab the cash – if there was any left once the cost of thousands of local pay negotiations had been absorbed.

“Taking money out of the pockets of already hard-pressed public sector workers would hit the private sector hard too, with everyone having even less to spend in local shops and businesses. That alone would take up to 100,000 jobs out of Britain’s regions.

“And of course most big national employers in the private sector have national pay rates with an extra London weighting, just like the public sector. Real employers know that the Policy Exchange proposals simply don’t work.”

UNISON general secretary Dave Prentis said: “It is no big surprise that leading right-wing think tank Policy Exchange has reached the conclusion it has, but the arguments for regional pay are fundamentally flawed, and stab at the heart of hard-earned employment rights.

“Robust independent evidence published only last week shows that the central arguments for regional pay – the ‘pay premium’ in the public sector, and the ‘crowding out’ of private sector jobs – are false.  The country’s foremost labour market analysts, Incomes Data Services, dispute the very starting premise of Policy Exchange’s research.

“Attacking public sector pay, under the banner of fairness, is a misguided short-term fix to a much bigger problem – our stalled and floundering economy. It is time the government refocused its efforts on job creation, investment and growth rather than continuing with a witch-hunt against hard-working public sector workers who provide vital services to the public.”

And NASUWT general secretary Chris Keates said: “This report appears to be another example of supporters of the Coalition Government seeking to rally support for localised pay in the face of a dearth of evidence to back up the Coalition’s proposals for the abolition of national pay frameworks for public services.

“This report is based on anecdotal evidence. There are no hard facts to substantiate its claims about public sector pay or public sector employees.

“Recommending that pay progression be frozen and a system of performance-related pay be introduced in the short term not only demonstrates a complete ignorance of the pay systems currently in place, but also demonstrates a high degree of contempt for hard working public servants who are already experiencing an imposed four year pay freeze, higher pension contributions and spiralling job losses.

“The report carries on the tradition of this government and its supporters in attempting to shift the blame for the current economic crisis onto hard working public servants.

“Claims that ‘inflated’ public sector pay and pensions are hampering job creation and financial growth are, quite frankly, ludicrous. It is the flawed economic policies of this government which have left millions of people unemployed and unable to find work.

“There is no evidence that national pay frameworks are undermining standards or are deterring high quality public service workers from joining or remaining in their professions, quite the reverse. What the report conveniently ignores is that national pay frameworks are not just a feature of public services, many private sector companies also use them because they are cost effective and aid recruitment and retention.

“Rather than finding more and more ways of attacking and penalising public service workers, time and energy should be spent on pressing the Coalition to clear up the economic mess.”



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