Thursday, 20 July 2017

Private versus public service pay: let us have some evidence

Philip Hammond has said some silly things about public service workers. (By the way, I am surprised he referred to women train-drivers. I would have thought that driving a bus was a tougher job, and women bus-drivers are a familiar sight these days. But then, it is probably many years since the chancellor boarded a bus.) The Daily Telegraph has also asserted that public sector pay continues to outstrip private sector pay, citing a recent IFS report. Since the only recent IFS report on the subject clearly refers to Graduate Recruits on its title page, it seems dishonest to draw service-wide conclusions from it.

Others, notably Boris Johnson who in theory ought to be on the same side as the prime minister and chancellor, assert that public sector pay has fallen behind and that the gap should be addressed.

Crude arguments about relative pay levels need to be picked apart. Do the protagonists include BBC executives, insulated from austerity and even public scrutiny, among their public service workers? Does the private sector include the poorly-paid and sexually-discriminated-against employees of companies to which local and central government work is outsourced? What about zero-hours contracts?

We need to return to wage awards in the public sector based on fair comparisons, matching like-for-like in public and private sectors. My guess is that such research would find that senior civil servants would be poorly rewarded in comparison with chief executives of major companies, that people at the bottom end of civil and public service pay-scales do worse than equivalents outside (though with better pension guarantees) but that a wodge of middle-ranking executives do rather better. But my guess is no better than Hammond's, or Johnson's, or Corbyn's until a truly independent expert body is commissioned to the detailed work and update it at least biennially.

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