Restraint and fairness in Public sector Pay (Fylde Liberal Democrats)

Fylde Liberal Democrats <info@fyldelibdems.org.uk>

Restraint and fairness in Public sector Pay

December 9, 2009 9:05 PM

"Liberal Democrat policy on public sector pay is fair to those delivering front line services" said LibDem County Councillor and Parliamentary Candidate for Fylde Bill Winlow. "About half the current budget deficit cannot be met from economic growth so it has to come from somewhere else. Public sector pay amounts to about a quarter of public spending so it cannot escape any serious attempt to limit public spending".Bill continued "Labour proposals are not facing up to the problem, whereas the Tories propose freezing the salaries of millions of teachers, nurses, firefighters & police but they can still find tax cuts for millionaires. Liberal Democrats propose a flat salary increase of £400 per person, which represents a 3.3% rise for someone on £12,000 p.a. and 0.4% for someone on £100,000. It will save about £4bn a year". (click on headline for more)

There is a budget deficit of about £175bn - of which about £90bn is structural -meaning it will not be eliminated by future economic growth. It is vital that we reduce public spending so we do not need to borrow so much money in the future.

Public sector pay amounts to nearly £160bn, about a quarter of all public spending, so any serious attempt to limit spending must include proposals about pay rises. Many people in the private sector have already taken pay cuts or freezes in response to the crisis. Liberal Democrats want to limit increases in public sector pay without unfairly penalising people on low incomes or enforcing pay cuts onto hard-working public servants.

Liberal Democrats propose that very public sector worker will be eligible for a pro-rata pay rise of up to £400. This is the equivalent of a 2% pay rise for someone on £20,000 a year, but a 3.3% pay rise for someone on £12,000 and a 0.4% pay rise for someone earning £100,000. Managers will not have to award the £400 pay rise to everyone - they will have flexibility in allocating their budgets so that, where appropriate, organisations can agree further pay restraint. Choosing this approach will significantly reduce the pressure for cuts to numbers in the public sector, helping to protect people's jobs.

The savings from this approach on existing spending plans is as follows:

2010-11 nil

2011-12 £ 2.169bn

2012-13 £ 4.381bn

2013-14 £ 4.468bn

2014-15 £ 4.558bn

The financial analysis of the policy is based on the assumption that pay rises under existing policies would continue at 2.5%.

Labour say: Workers with salaries of over £150,000 will have to be individually approved by the Treasury. LibDems say: Labour isn't facing up to the real problem. Their refusal to get real on public sector pay shows just how badly they are failing to sort out Britain's finances.

Conservatives say: One-year pay freeze for everyone on a salary of over £18,000. LibDems say: The Conservatives are going to freeze the salaries of millions of teachers, police officers, nurses and fire-fighters even though they can find the money for tax cuts for millionaires. They are out of touch with the needs of ordinary people - it's clear life would get worse, not better, for most

people under a Conservative government.