With apologies to anyone that's not on Twitter a thread from Ben Zaranko at IFS on the Independent Pay Review Bodies recommendations and the economic and political choices being made.
"There are rumours that the government could overrule the independent Pay Review Bodies’ recommendations and offer a lower pay rise to public sector workers, due to concerns about the possible impact on inflation.
A few thoughts 🧵"
https://twitter.com/benzaranko/status/1679077645366046720?s=46&t=Uw4lJNwxFZFnX0Xs3doHYg
I've copied the last 3 tweets but you do really need the full thread for the full context.
"What we might see instead is the government accept PRB recommendations, but provide no additional funding. That would mean no borrowing-fuelled demand injection, no need for tax rises – but would mean cuts to non-paybill public service budgets."
"That would be tricky. Schools, for instance, might have to cut back on things like textbooks, science experiments, school trips, cleaning services, etc, in order to meet the costs of higher teacher pay from within the same budget. Or, public services will employ fewer staff."
"In sum: it’s not costless to accept the PRB recommendations (higher borrowing and possibly higher inflation; higher taxes; or cuts to other budgets). But it’s not costless to overrule them either (inevitable strike action; further hit to recruitment and retention). [end]"
https://twitter.com/benzaranko/status/1679077683530018819?s=46&t=Uw4lJNwxFZFnX0Xs3doHYg