Public Sector Pay ... "Stuffing Their Mouths With Gold"

Junior doctors had been offered a 22.3% pay rise to end strike action. Train drivers have been offered a 15% settlement, teachers and nurses have been offered a 5.5% settlement. Such spending on public sector pay will not easily be absorbed into more restrictive fiscal targets from The Chancellor..

In 1948, Aneurin Bevin was asked how he had achieved an accommodation with doctors in the creation of the National Health Service. He explained he did it  by “stuffing their mouths with gold”. A generous pay award and the right to treat private patients as a sideline helped.

Starmer and Reeves appear to be using the same technique to resolve conflict in the public sector. “Stuffing Their Mouths With Gold’, with generous pay awards.

More savings on spending, or higher taxes will have to be found to pay for the awards. Even the triple alliance of the big three taxes may be at risk at the onset of the new Labour Five year term.

Only a quarter of voters believe that ­Labour’s public sector pay deals are affordable, according to recent polling for The Times.

YouGov polling suggests only a third of voters think the party has handled the problem well.

Almost 40 per cent of those questioned said the government had handled the issue badly, including 15 per cent of those who supported the party at last month’s election.

A quarter of voters said they thought the deals would make future strikes more likely, while a third said Labour was too close to the trade union movement. Only 22 per cent said that the party had got the balance right.

The government is preparing to publish its long-awaited workers’ rights package when parliament returns next month amid concerns from business leaders that it will strengthen the hand of the unions and raise costs for companies.

The Federation of Small Businesses has warned confidence among small business owners fell back into negative territory in the second quarter of the year, largely due to higher private sector wages.

The Trades Union Congress (TUC) is expected to press Labour for “pay restoration”, to make up for a decade of public sector real-terms salary cuts, when it holds its annual conference next month.

Economists estimate that each one percentage point rise in the public sector pay bill would cost taxpayers about £2.5 billion. To restore public sector pay to the 2011 level in real terms would theoretically require a 21 per cent increase, of more than £50 billion.

The survey found that despite worries about the cost, a majority of people were in favour of ministers agreeing pay deals to end the strikes.

Just over 40 per cent said the 14 per cent three-year pay deal for train ­drivers was the right thing to do, while 38 per cent insisted it was wrong. The 22 per cent deal offered to junior doctors was backed by 57 per cent of voters but opposed by 27 per cent.

The Tories had budgeted for an increase of just 2% in public sector pay deals. The imposition of a pay cut in real terms was never really realistic. The hidden costs of low pay deals are huge. They include, strike action and disruption. Increased waiting lists in the NHS, low grades in schools and increased waiting times on platforms.

Low pay results in low morale, high staff turnover, increased recruitment difficulties, high training costs and huge on boarding challenges.

Stuffing their mouths with gold may appear to be an expensive solution. Stuffing their mouths with “suckanhock and wampum”, makes low pay deals too difficult to swallow leading to a greater increase in cost.
References ...
Suckanhock a dark-coloured kind of shell -money, Wampum a traditional shell bead.
Only a quarter of voters believe Labour pay deals are affordable … The Times
Rising Costs Sap Confidence of Small Business ... The Times