From the TUC

Pay inequality and the public sector

18 Apr 2009, by in Economics, Equality, Pensions & Investment, Public services

The FT reports that pay for top quango chiefs is to be held back. I guess that no-one much is going to oppose that. But I cannot help feeling that this is not being done through any sense that the gap between top earners and the rest has got too big but is a more of a victory for the anti-public sector campaign of the Taxpayers Alliance and their allies in the right wing press.

This is also in evidence today with the Conservative Party’s research that shows that private sector workers are four times less likely to have an occupational pension than state employees. (Figures which of course can be retrieved in a few minutes from official stats).  Of course this is shockingly wrong, but as usual this is being harnessed to a ‘cut back the public sector agenda’ not for support for this government’s plans to give the big majority of private sector workers at least some pension and a compulsory employer contribution from 2012.

But the TPA are not getting it all their own way. Paul Carter, the (Conservative) leader of Kent County Council today responds to the TPA’s Town Hall Rich List, with a letter saying that senior salaries in town halls have not risen as fast as those in the public sector.  While his figures don’t seem that rigorous to me I suspect he has a point. What we have here is a spat between those who think that the public sector needs a good shake up by well paid managers from the private sector and those that simply believe in the smallest and meanest public sector possible. This is not an argument where I feel any need to choose sides.

The big paradox of politics at the moment is that voting intentions are shifting to the right at a time when political opinions are shifting to the left as voters become more concerned about issues such as inequality and tax justice. The ingenuity with which the Conservatives, and outriders like the TPA, manage to twist these concerns to right-wing strategic goals such as a smaller public sector is part of the explanation – as of course has been the failure of much of the left to develop alternative narratives and policies.

Labour has its own argument between those who want to see great equality and those who are still terrified of appearing anti-business. The latter are winning at the moment. Peter Oborne – easily the most interesting conservative commentator around  – points out how little impact the government’s supposed post G20 crackdown on top private sector salaries is having.

Will the Budget make a difference? There is talk of ending higher-rate tax relief for pension contributions, shaming of tax evaders and other measures that are already getting predictable press attacks.

But unless they are put forward confidently as more than just necessary pain to deal with the budget deficit they are not going to shift public debate.

2 Responses to Pay inequality and the public sector

  1. The future of the left: could it be Carlota Perez? | ToUChstone blog: A public policy blog from the TUC
    Apr 18th 2009, 10:43 pm

    […] was accompanied by many despairing “but what is to be done?” type questions.  Owen and Nigel have reflected this sense on this blog pointing out that there seems little concrete for the left […]

  2. Owen Tudor

    Apr 19th 2009, 10:07 am

    Nigel’s suggestion that this is being done for the wrong reasons is underlined by the fact that the alleged ‘crackdown’ on quango leaders’ pay involves their pay increases being held to “not significantly more than” the pay increases of public sector workers. So the gap between top earners’ pay and ordinary workers’ pay can continue to grow. Some crackdown!