Afternoon:
9°c
Osborne calls for rethink over generous public sector pay deal
Paul Waugh and Nicholas Cecil6 Apr 2009
DOWNING Street refused to reopen a pay deal for nurses, teachers and police today despite a warning from the Tories that the country cannot afford inflation-busting wage rises.
Shadow chancellor George Osborne called for the three-year salary settlement for public sector workers to be unpicked to reflect the fact that inflation was zero.
Under a landmark deal struck by Gordon Brown last year, most public sector workers are getting two per cent a year increases in their salaries. But many economists believe that inflation could go negative as workers enter the second year of the three-year deal.
As a new report warned that the UK faced a £40billion economic black hole, Mr Osborne said that urgent action was needed to make the country live within its means. He said the Government's plans for a 1.1 per cent growth in spending sounded strict but were "not tight enough given the fiscal situation we have to face".
"Where the bulk of the strain needs to be borne is on spending restraint," he told BBC Radio 4's Today programme. He said that if he became Chancellor, he would want "immediate action" on making sure public pay reflected "the prevailing rate of inflation".
He added that a crackdown on high pay in public sector "sends a powerful signal that the age of excess is over and we need an age of restraint and responsibility".
However, the Prime Minister's spokesman said: "There are no plans to reopen these multi-year pay deals. They provide an important source of stability in the economy for the Government, but also for key groups of workers such as nurses, teachers and police."
Karen Jennings, Unison head of health, said Mr Osborne's words were "a disgrace". She said: "Health workers will be outraged at George Osborne's suggestion that they have enjoyed an 'age of excess'."
Mr Osborne's demands come as Mr Brown and Alistair Darling were meeting Bank of England Governor Mervyn King at No 10 today to discuss how to use last week's G20 summit deal to tackle the recession.
The talks come a day after Mr Darling admitted that the recession will be worse than he had forecast.
Reader views (24)
Sorry Mr Osbourne. Inflation is running at around 3%. So really the public sector workers including teachers, nurses and Police are getting screwed as usual. Low inflation was just a blip
Here is a party that refuses to divulge it's policies and yet expects to get voted in. I THINK NOT. Certainly all working and middle class folk will not be touching you with a barge pole
- Tony, Midlothian, 31/03/2010 13:06
Report abuse
Daveb are you having a larf!!! Stop repeating tory talking points. OMG are there really over a thousand council chief executives earning over 100k, what with the so few services they are responsible for. Meanwhile over in the efficient private sector they are on multi million quid pay deals for making cock ups of their businesses and then have to get the PUBLIC SECTOR to bail em out. They want all the benefits and profits without the consequences of the risks. Or massive pensions like Fred the Shred (remember him)...dont hear much about private sector greed and inefficiency from the tories these days. Have you tried getting a call out from British Gas for their 24/7 cover (it aint 24/7 in case you didnt know but believed the expensive ad campaign). I get much better value from my local council and much better service.
We havent forgot the last Tory governments with schools with leaking roofs, hospitals with patients waiting on trolleys cause there were no beds available or due to staff shortages. Maybe you might want to consider applying some market forces into the public sector....like the idea that if you want the best staff you might have to attract them with the best wages!!!!
- Andyc, tayside, 16/04/2009 15:33
Report abuse
On dear- this one seems to have ruffled a few feathers! Has anybody bothered to take note of how many people the State now employs in this country - it's 5.8m - I'll say it again - 5.8m - what do they all do for heaven's sake. To make matters worse, over 1,000 council workers earn over £100k pa and the Public Sector pensions timebomb doesn't even bear thinking about.This out of control juggernaut has to be stopped and fast before this country becomes one of the most highly taxed in the world for years to come - that will be good for attracting and retaining the best talent - not! The Private Sector are having to become more productive and efficient which sadly means wage freezes, and job cuts - the Public Sector must do the same before it bankrupts the country. Of course many work hard for relativley low wages but many, many more don't - time to wake up and smell the coffee I think.
- Daveb, Manchester, 07/04/2009 09:11
Report abuse
Isn't it strange that when core, key workers like teachers and nurses want a pay increase it's always a bad time - inflation is too high, the country is in recession etc etc, yet it is also never a good time it seems, to cut the number of sponging public sector bureaucrats and civil servants, their gold plated pensions, expenses and for some, 6 figure salaries. Time to cut the burgeoning bureaucracy, save money and put that money into services that the state is supposed to provide.
- Mcw, London, 07/04/2009 08:59
Report abuse
I assume ".. public sector workers .." includes MPs?
He is a liability to the Conservatives, he should go very quickly before the next election.
- Frank, Home Counties, England., 07/04/2009 08:48
Report abuse
Which inflation figure are we working on today then ? Also they know it's going to shoot up pretty soon.
- Shaun, leeds, 07/04/2009 08:39
Report abuse
I am a Brit, but live much of my time in Ukraine where my wife works for the local District Council. In the current economic climate she and all her colleagues are working without pay and have been told there is a moratorium on holidays. This in an economy where most people live on the bread line a day at a time. They just keep going in the hope that things will get better. I hear no carping. I think a pay freeze for all public servants in UK, followed by a severe cut back in numbers of administrators and jobsworths is certainly called for.
- Sandy, Ealing, UK, 07/04/2009 08:19
Report abuse
Osbourne for all his faults his absolutely right about this issue regarding public sector pay. It isn;t just a pay issue either. It's about the public sector's enjoyment of security of employment relative to the private sector though we accept fluidity of employment in the private sector as an occupational hazard. It's about final salary pensions schemes. It's about a highly organised and exploitative unionised workforce that uses subtle threats of industrial action when issues like this are raised. It's about Labours client state.
It's about the public sector unions forgetting who pays their members wages and hence the subs they pay to those unions ie my taxes being used to finance union activities.
Unions are an infection.
It is the private sector who produce the wealth in this nation. without that wealth the public sector would have crumbled away many years ago. those people need to remember who pays their wages and quick
- Darius Mathers, London, 07/04/2009 07:59
Report abuse
I suggest amendments such that public sector workers who move to countries which have their UK state pensions frozen, i.e. not uprated each 6 April, including Australia and Canada are not compensated by the public sector pension scheme (paid by the UK taxpayer) for the UK Government's failure to uprate UK State Pensions. Is it fair that pensioners in the US, Israel and tax haven the Philippines have their state pensions uprated whilst those who supported the UK 1939 to 1941 don't? Is it fair that civil servants are effectively exempt? What alternative would be offered by a Conservative Govt? What did Gordon Brown mean when he recently talked about an international approach, fairness and morality? I would welcome meaningful replies to these questions. Can someone explain why the National Insurance Fund, financed by contributions which included provision for State Pensions at the current rate, is tens of billions of pounds in surplus? I would suggest that this is an accumulation of the UK Government's failure to pay upratings to 3 or 4% of pensioners in frozen countries plus insufficient increases in state pensions generally.
- Richard Lane, Kariong, NSW, Australia, 07/04/2009 00:07
Report abuse
It sounds as if the public sector employees are in good voice here. Aren't thay all on contributory final salary pension schemes - many with a retiring age of 60 years old ? For crying out loud.
Gordon Brown killed off such schemes in the private sector. So retired private employees must keep paying for the bust public sector pension schemes. I know that many publc "servants" will have a low pension, but so have many others. Gordon was frightened off moving the state sector retirement age up in line with the rest.
Obviously he wants all public sector employees to vote for him - his client state as it is called.
On the other hand, twit Osborne keeps putting his two feet in his mouth. The Tories must despair of this man.
- Sally70, Bedford, 06/04/2009 22:24
Report abuse
The country certainly is not bust and nothing like it,a bust country does not pump billions into a banking system etc etc,Zimbabwe is bust,and george osborne is a typical Torie.
- Kev, London-UK, 06/04/2009 18:12
Report abuse
Ok --pay them this now--but put a time and motion review in place and see if we are getting good value for our public services.
Any service seeming not coming up to scratch would be immedialty outsourced or left to fend for itself as a stand alone self resourcing external business unit.
- William Grierson, Kimpton-UK, 06/04/2009 17:58
Report abuse
Maybe George Osborne should be looking closer to home if he wants to stamp out profligacy. Of the 10 top Councils paying their Leaders in excess of £100,000 per annum, not including expenses, 6 are Conservative Councils: Westminster, Kent, Surrey, Hertfordshire, Shrewsbury, Bedfordshire. Don't do as I do, do as I say, appears to be the message from the Conservatives.
- Val Daniels, Mijas Costa, Spain, 06/04/2009 17:57
Report abuse
At last a voice of reason over Labor greed. We have spent so much on Public Services only to see manpower go up, and service decline. We can't afford Labor's extra million public servants. Our taxpayers can't afford it.
- Jamal Akhbar, Edinburgh, 06/04/2009 17:25
Report abuse
But Jeremy the company is not bust - heavily overdrawn certainly - and not the fault of the nurses or teachers. In the last 20+ years nurses/teachers/etc have regularly been given below inflation pay rises whilst seeing private sector salaries and salaries of high ranking public servants being paid higher rates of increase. Many in the private sector are now whinging about public sector pay - yet used to gloat about earning more than the public sector (and argued that 'our wonderful nurses' should be paid a proper salary). They can't have it both ways. If the Government can bail out the private sector it should not be at the expense of the public sector staff who attempt to keep our public services going on dwindling budgets. Make cuts by getting rid of unnecessary high paid administrators not by alienating the essential staff.
- Jeremy, London, 06/04/2009 17:22
Report abuse
If a company is bust then all deals are off. In case you had not noticed the whole country is almost bust"
O ye of little faith. We have just experienced world leaders agreeing a programme of economic enterprise leading to economic stability and you and george Osborne spitefully detract those who worked so tirelessly to bring that agreement to fruition
- Keith Price, Luton, England, 06/04/2009 17:01
Report abuse
If you can find the money for greedy bankers and M.P.s for their bonuses, expenses and pensions you can find the money to give our hard-worked nurses a decent living wage. Why should they suffer because of your greed in grabbing our tax contributions for yourself and then denying it to those who really do a good job of work.
- Janet, London, UK, 06/04/2009 16:38
Report abuse
Andy - Agreements sometimes have to be re-negotiated. If a company is bust then all deals are off. In case you had not noticed the whole country is almost bust and we have a public sector we can no longer afford (if we ever could in the past is debatable). Yes, pay deals and pensions for the Public Sector will have to be changed - and it should start with MPs. At the very least we should reduce the total number of MPs and have massive reform of pay, pensions and not least expenses.
- Jeremy E, London, 06/04/2009 16:25
Report abuse
And so the Tories true colours are revealed. With most public sector workers in the health care, teaching or police professions struggling to pay the massively increased utility bills, food price rises, negative equity or high rents, along comes the would be Tory Chancellor and says cut their pay. An absolute disgrace. Who ever believed these Tories were a new breed, the "caring conservatives". Don't make me laugh. This is the language of Thatcher and Tebbit at their worst.
- Matthew, London, UK, 06/04/2009 16:12
Report abuse
a little taste of the Tory mentality we can expect if we are stupid enough as a nation to vote these guys back in. Lets save more money by cutting the excesses of those who are elected to represent us ie the MP's. I presume they are getting more than a 2% payrise and I don't see anything from the Tories about making cuts to their salaries.
- Ag, London Village, 06/04/2009 16:07
Report abuse
THIS INEXPERIENCED "BLUE-EYED" BOY NEVER HAS ANYTHING GOOD TO SAY ABOUT ANYONE, EXCEPT HIMSELF. CAMERON WILL NEVER BECOME pm WHILE SUCH A DESPAIRINGLY DOWNCAST AND CHIDING MAN IS IN CHARGE OF ECONOMIC POLICIES AND STATEMENTS
- Keith Price, Luton, England, 06/04/2009 16:00
Report abuse
Osborne get your own house in order before you, and the other greedy, money grabbing, expense swindling MPs start talking about curbing pay awards to some of the lowest paid workers in the country!!.
- Pat, South of England, 06/04/2009 15:57
Report abuse
Nor should the agreement be reneged on - the government can't negotiate pay deals and then renegotiate them when they are no longer in the government's favour - nurses don't get an opportunity to renegotiate the agreements when inflation rises well above the agreement - so the government should not be allowed to renegotiate it now. It makes a change for nurses and teachers to be receiving above inflation rises (usually they receive well below inflation). It is good to see that the Tories are reverting to form! I didn't see the Tories complain loudly about the recent pay rises for MPs.
- Andy, London, 06/04/2009 15:08
Report abuse
Very sensible suggestion. Good financial sense and it would stop becoming two nations - the gulf widens every day and I can sense huge resentment building up in those outside the public sector.
- Paul Scott, Edinburgh , UK, 06/04/2009 15:06
Report abuse
