Downing Street Says » Inflation/Public and Private Sector Pay

Asked how concerned the Prime Minister was about a fairly sharp rise in inflation, seeing as this might fuel more inflationary wage demands, the PMS said people would have seen the remarks by the Chancellor on this earlier today. It was important that we maintained discipline in relation to wage demands in both the public and private sector. What we did not want to see was any development of any wage price spiral, of the type that we had seen in decades past, when global prices rose.

There were issues here for the private sector as well as the public sector. Of course we would all like to see hard working public servants paid more. However, it was important that we maintained discipline. We had had to take difficult decisions over the past year or two in relation to a wide range of public sector workers and as a result of those tough decisions that we had taken, inflation was lower than it might otherwise have been and interest rates as a consequence were lower than they might otherwise have been.

Asked whether there had been a meeting between the Prime Minister and various trade union representatives and if there was, did the Prime Minister take the opportunity to make any kind of appeal on the eve of the public sector workers strike, the PMS replied that a document had been released this morning on skills training for employees. This was a statement agreed between the trade unions, the Government, and crucially, business organisations like the CBI, which rather knocked down some of the interpretations that were being put on the document this morning.

What this document did was call upon employers and this was agreed with employers, to make sure that employees were aware of all their employment rights. There was a reception in Downing Street this morning to mark the launch the document, but the Prime Minister was not involved. The people who were at the reception were representatives from the trade unions, but also from the business sector as well. Asked if the Prime Minister had met any of the trade unionists this morning, the PMS said not as far as he was aware.

Asked whether the Prime Minister would like to see other senior figures in the public and private sectors following Mervyn King’s decision to forgo a salary increase, the PMS replied that these were really decisions for individuals. The Prime Minister had already made clear the situation in relation to Ministers. As a general principle, the Prime Minister thought it was important that we maintained discipline on wages in both the public and private sector at this time.

Asked whether the Prime Minister had any meetings with trade union people coming up, the PMS replied that if there was anything specific we would let people know, but obviously he and other representatives of the Government occasionally met representatives of the unions, just as they occasionally met representatives of the business community.

Put that maintaining a two percent limit on wage increases must be difficult when top public sector workers from the civil service and the BBC for example were getting around this by rewarding themselves big bonuses, the PMS said there were a number of assumptions underlying the question. In relation to senior civil servants, the PMS did not have the figures with him, but there had been yet another tight settlement for senior civil servants that had come out of the pay review body. BBC salaries were a matter for them. There were very longstanding arrangements relating to the autonomy of the decision-making processes in the BBC and the PMS said he did not think anyone was seriously questioning that.

Asked what the Prime Minister thought of the large pension settlement for the former head of HMRC, the PMS said that that was really a question for the Cabinet Office. Again, there was a distinction between people’s contractual pension arrangements and the separate question of across-the-board public sector pay issues.

1 Comment »

I’m shocked by survey results carried out by the CIPD published today (13/8) that public sector wages now out strip private sector wages by a fairly hefty amount ie average public sector wage including pensions payments is £32,000 versus private sectory at £22,000. This is shocking news and given that employees in the private sector are funding these above average salaries and pensions payments its time for action to curb such pay deals. Lets face it the unions have obviously done a fantastic job for their public sector members – the government needs to wake up and take a reality check especially in these increasingly more difficult times when people are losing their jobs.
Comment by Lyn — 13 Aug 2008 on 12:55 pm | Link

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» Tuesday, July 15, 2008

Inflation/Public and Private Sector Pay

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