Public sector faces pay cuts, says Alistair Darling

[mateykatie]

ALISTAIR DARLING, the chancellor, today warns public sector workers they need to follow the example of the private sector and accept wage cuts if they want to hang on to their jobs.

Signalling an assault on public sector pay and bonuses, starting with the highest-paid employees, Darling said it was time for a change of culture.

?What is being paid has sometimes lost the relationship it ought to have with what someone actually does. Once that happens, it?s not only unfair, it?s actually grossly inefficient,? he said in an interview with The Sunday Times.

He cited the example of private sector firms, two-thirds of which are planning wage freezes or cuts this year as an alternative to redundancies.

www.timesonline.co.uk/tol/news/politics/article6999958.ece

I wish Alistair Darling was PM instead of Brown. He seems to be one of the few remaining Labour politicians who is on rare occasions honest, instead of spouting the Brown/Balls "Labour investment versus Tory cuts" lies.

I'm not really clear how it's going to be good for the economy if ordinary workers (in either private or public sector) are having their incomes squeezed while pay levels at the top are so high.

If he really does go for the high earners first I'll eat my hat. They pretended that's what they were doing in Ireland and it was a big fat lie.

skidoodle,

It won't be good for anyone, individually, sadly. The next few years are going to be utterly crap.

The point is that the government are spending 13% more than they are taking in tax this year. Much of that is "structural" - nothing to do with temporary stuff due to the recession.

If they don't stop very soon, then no-one will want to lend to us because our national debts are too high, unless we increase the interest rates we pay on gilts massively.

High interest rates come hand in hand with high inflation, and will definitely have a massive negative effect on the economy.

I work for the public sector and am already on lower scales and have indured no pay inflation rises for the last few years then got hammered down further in job evaluation. Good staff are leaving in their droves.

nappyzonecantrunfortoffee,

Where exactly are all the good staff going? It's not like there is massive demand in the private sector right now.

Many public sector workers are not paid much more than the minimum wage. If they face pay cuts then the rubbish will not be collected and the country will grind to a halt.

It would be better to raise the basic rate of income tax. Yes, this would be unpopular but then everyone would help pay for the mess.

I'm so confused these days. Labour is talking about reducing the cost of government and the Tories want to fix the NHS. What next? Perhaps Lib Dems will campaign on lower taxes for everyone.

It's either this or further increases in tax. The hike to 50% will make hardly any difference to the deficit so we would talking substantail increases for all.

I work in the public sector and have never had a bonus - I think that some of the Whitehall departments do this though as does the BBC possibly?

The public sector is a very broad one - from bin men to the Director General of the BBC to Headteachers and nurses. While I agree that we shouldn't expect payrises, I don't think it would be fair for lower paid workers to take as big a hit as some of the higher paid bods. I do think that bonuses should be scrapped though.

And how about allowances, expenses and pensions for councillors, MPs and quango board members? They should also be looked at.

And mateykatie, good public sector staff may not find it as easy to find a new job at the moment, but they're on the lookout, believe me. And when the public sector can't retain good people, it's services that suffer.

I'm split on this (being a public sector worker). I'm at the bottom end and we get paid less than our equivilents in the private sector. For example call centre workers where I work get around £2000-£4000 a year less than in the private sector (the pay off being that working conditions are better). BUt many are leaving where they can get other jobs. I don't know about the top level jobs but at my level it is considerably less pay. And we don't get bonuses.

Also in a lot of areas public sector workers have been made redundant or are facing the possibility of redundancy. Again these are those at the bottom.

While, like others, I find huge salaries for the top jobs and huge bonuses etc to an extent, unjustifiable and wouldn't lose sleep over it, I worry that what will actually happen is the lower end staff will lose their jobs or end up taking paycuts. The ones that can't afford to pay will. And the services will suffer when you have huge levels of demoralisation and not enough staff to do the jobs.

SO while if he does what he says then fine, probably a good idea - I can see it actually being the poorly paid lower end of the scale workers who have wages cut and face redundancy while those at the top are fine. As per usual.

The public sector empty our bins, they clean our schools, hospitals, dinner ladies that feed our children, look after elderly in care homes and run our libraries. There are loads of low paid jobs done by public sector workers which are essential to the country.

Maybe the alternative is a huge tax hike, but at least everyone would be sharing the pain. It has to be remembered that its the private sector that caused the problem of the credit crunch.

'' The Chief Executive of Kent County Council does oversees the largest council in Britain, with an annual turnover of £1.8billion; but he earns more than the Prime Minister (£194,250,000) so is his salary really appropriate? ''

madness!

Ah, the council chief exec earning more than the Prime Minister line is a regular one trotted out by the papers.

Yes, on paper the earn more but they don't get all of the allowances and very generous MPs pension (although they will be on a good pension) or the house in London and one in the countryside, the retinue of staff that the PM has and so on. Also, Prime Ministers tend to do very well for themselves once they leave office - see Tony Blair for example - not exactly the same state of affairs for retired council chief execs.

And I think you'll find that a CEO of a private company with a £1.8 billion turnover and the same number of staff that Kent County Council employs would be earning a darn sight more than £194k.

at that salary.

The chief exec of the council I work for doesn't earn anywhere near that (less that half I think last time I checked).

It's salaries like that that cause all the bad feeling towards the rest of us.

I wonder if he gets a bonus on top of that

"It has to be remembered that its the private sector that caused the problem of the credit crunch." Erm, no it wasn't the private sector. It was lax regulations, allowing bubbles to expand and stupid bonus-culture greedy bankers that caused the credit crunch.

Private sector includes manufacturing, farming, tourism, utilities, transport and a myriad other things that are taxed to the absolute hilt and make lots of money for the treasury. The public sector, on the other hand, takes money from the treasurey. Suck it up public sector workers, it's about time you all took a hit too.

But lots of the public sector are already taking a hit - local councils especially - we're making people redundant and cutting service costs at the moment. Where cuts are made, it needs to be done equitably, and include the big Whitehall departments who spend megabucks.

Small government and more personal responsibility is what we need. It will be painful to start with but much healthier for the economy and the country. Why do people only seem to think that big, nosey government will work? (Oh yes, because everyone works in the public sector now...).

"Speaking from my position within the legal profession, it does seem to me that the only bodies still splashing around big wodges of cash are public sector bodies, from Whitehall on down"

So would the economy be better off if nobody was spending any money?

There is a school of thought (Keynes, Paul Krugman, William Keegan variously) that when times are tight you need the public sector to spend money in order not to make a recession/depression worse than it already is.

The entire "recovery" we have is based on low interest rates, quantitative easing, and government bailouts of for banks, i.e. it's all public money.

When should they withdraw the stimulus? I'm not sure, but there are certainly a lot of commentators who reckon it's still too soon (Mervyn King amongst them as far as one can tell).

I'm really struggling with this enthusiasm for taking the pain and times of austerity, particularly the calls for low and medium paid public sector workers to lose jobs/pay/conditions and for similar private sector workers to become more competitive (i.e. lose jobs/pay/conditions).

Ordinary workers are supposed to take the pain while the financial pissing about that got us into this mess is being further incentivised with our money.

Seriously, fuck that. When I see the first attempts being made to rebalance the economy away from finance and towards industry I might be a little less fucked off at people dancing around cheering because some ordinary people are going to have their pay packet cut and have difficulty paying their mortgage.

DH works for locla council and I am veyr about this.
If it started at the top then fair enough, but he earns less than his private equivalent, has only had cost of living increases for years, and I fear that they will stop increases for everyone, leaving us in the shit.

And yet RBs are still giving out bonuses...

Skidoodle - I'm so with you. My DP has a meeting with his bank manager next week that he is dreading. The bank manager wants DP to change the company overdraft to a loan. Who the hell is that supposed to benefit apart from the bloody bank? They have billions of our money and yet don't want to lend it to any legitimate money-making business. It sucks.

"Average salary in the public sector is now apparently about £2K higher than the private sector average. I don't see how this can be sustainable, given the state of the public finances. "

I find that hard to believe when many public sector workers aren't paid much more than the minimum wage.

The credit crunch was caused by greedy banks in the private sector, who still get bonuses.

Many private sector workers are also on the minimum wage! Waitresses, people stacking shelves and so on.

Even in finance, most employees are not high earners. Most people working for Lloyds are going to be counter staff, cleaners, IT helpdesk people and so on. I never understand why people make out that everyone in the private sector does some kind of evil job and the public sector is full of saints.

Most people in both sectors are just ordinary people.

Also, most people who work for banks do not get bonuses. A few people at the top do.