Public Sector Pay Cuts Will Lead To Industrial Strife And A Labour-Union Confrontation

GMB today joined the TUC launch of it’s “Speak up for Public Services” pay campaign which slammed this government’s policy of keeping public sector workers’ pay down to bail out the rest of the economy.

Brian Strutton, GMB National Secretary commenting on the publication of the report ‘Six Million Pay Cuts’ said, “It’s politically, economically and socially inept to cut the pay of workers in local government, health, education and other public services. The Government is targeting some of the lowest paid social groups while allowing free rein for the better off and the private sector. It’s an attack on the public sector core of trade union membership at a time when the labour government needs all the friends it can get.”

In the report out today (Tuesday), the TUC has told the Government that its centralised pay target of two per cent for the next three years will do nothing to fight inflation and risks fatally damaging the industrial relations machinery that has helped to minimise disputes across much of the public sector.

The report, ‘Six million pay cuts’ also says that the Government’s pay target will widen the pay gap between men and women, hit staff retention, recruitment and morale and threatens a return to the “bad old days of public sector pay boom and bust.”

‘Six million pay cuts’ is published to coincide with the launch of the ‘Stand up for public services’ campaign by the TUC and its public sector member unions. It says that the Government’s arguments for a three year uniform public sector pay increase of two per cent - well below the current retail price index of around four per cent - do not add up.

The Government claims that the pay freeze is necessary to fight inflation, but the report cites research carried out for the unions by Income Data Services which shows that public sector pay follows inflation rather than causes it. And the most recent round of below inflation public sector pay increases has had little or no effect on private sector pay.

Inflationary pressure in the economy is not coming from pay – least of all public sector pay - which is already rising more slowly than pay in the rest of the economy. The Office of National Statistics says that inflation has been caused mainly by increased housing costs, higher petrol and oil prices, and more expensive household goods – not pay.

A centralised two per cent pay target threatens the pay review bodies that determine pay across many of the most sensitive areas of the public sector, the report says. These are independent bodies that have removed conflict and minimised disputes. They take into account union claims, affordability and recruitment and retention issues. But the report argues that a three year centralised two per cent limit risks undermining this well-proved system and will not allow individual sectors to set appropriate pay that reflects issues peculiar to their staffing needs. In particular it will make it hard, if not impossible, for sectors to deal with equal pay issues.

Holding back public pay will make the pay gap between men and women greater as the public sector employs proportionately more women than the private sector.

TUC General Secretary, Brendan Barber, said: “The Government is on a collision course with six million public servants. Forcing effective cuts in their pay for this year and the next three will hit morale and have an inevitable impact on the quality of public services.

And yet the Government’s arguments for this draconian policy simply do not stand up. Public sector pay does not cause inflation, and holding it back does nothing to fight inflation caused elsewhere. Its only economic impact is on the living standards of public servants.

The Government’s approach threatens the independent public sector pay review bodies that have removed conflict from important parts of the public sector. It also fatally undermines any ambition the Government has to narrow the pay gap between men and women.

Many public sector servants can remember the bad old days of boom and bust in public sector pay. The Government’s four-year plan of public sector pay bust means that resentment can only grow and fester among public servants – all of whom have votes.”

Ends

Contact: Brian Strutton, GMB National secretary on 07860 606137 or GMB Press Office: Steve Pryle 07921 289880 or Rose Conroy on 07974 251823.

Notes to Editors:

- A copy of the report, ‘Six million pay cuts’ is available from the TUC press office.

- The TUC and the unions have also produced a joint statement on public sector pay and are launching the ‘Speak up for public services’ campaign at 11am on Tuesday 18 December in Victoria Tower Gardens