Last week Alice blogged about the impact of the announcements in the autumn statement on public sector workers.
Of course most of the headlines were grabbed by the Chancellor’s announcement that he would impose two years of 1% pay-caps on public sector workers at the end of the current two year pay freeze (three years if you work in local government). At a stroke this announcement managed to undermine the ongoing negotiations around public sector pensions (which in part are about significant contribution increases in the context of a pay freeze); confirm the government’s intention to cut the living standards of public sector workers by 16.5%; and signal his seeming contempt for collective bargaining and fair negotiations. Having days earlier called on public sector unions to ‘get back around the negotiating table’ over pensions, the Chancellor effectively pulled the table away from them when it came to public sector pay.
Of course whether or not the government can hold to its 1% cap remains to be see. Previous governments of different political persuasions have struggled to maintain medium-term pay/incomes polices, particularly against the backdrop of turbulent economic conditions. Both Edward Heath and Jim Callaghan can testify to that.
But perhaps just as important as the announcement of the 1% cap, was the Chancellor’s call for Public Sector Pay Review Bodies to look at how public sector pay can be made ‘more responsive to local labour markets’.