The Telegraph and Policy Exchange make Joint Attack on Public Sector

Amy Woods, 13 May 2011

Categories: The Telegraph | Finance | Politics | Trade Unions | Conservative Party |

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Earlier this week an editorial in The Telegraph pronounced that: “The overwhelming majority of public sector workers are significantly better paid than those in the private sector – and the differential is actually increasing.” The paper was citing a report released by the conservative think tank Policy Exchange which claims findings of a pay premium for public sector workers.

The report advises that “significant reforms will need to be made to limit job losses in the public sector and to achieve equity and fairness in the labour market.” It demands an end to “national strike balloting in the public sector”. The result, it states, would be that “the power of ‘national solidarity’ would be lost because workers would no longer take collective action on a national basis.” The public sector has a vastly greater percentage of union membership than that of the private sector. (In 2009 56.6 per cent of public sector employees were union members compared to 15.1 per cent of all private sector employees in the UK.) It is this power that the rightwing think tank wants to erode.

Writing in the Guardian, Richard Seymour has highlighted the report’s many failings, concluding that: “There is little evidence of a substantial pay premium for public sector workers”. Yet Policy Exchange’s position is in keeping with a general attack on the public sector and workers’ rights.

Workers’ rights are currently under threat throughout the world. Recently in Wisconsin, Republican governor Scott Walker passed a bill stripping “175,000 public sector workers of almost all collective bargaining rights.” And as Keith Ewing described in the Guardian last month, “European workers too are seeing the erosion of hard-won collective bargaining rights, also as a result of the greed of the bankers, who have emerged from the financial crisis unscathed.” (Indeed, the UK’s top earners have recovered quite successfully. According to the Sunday Times Rich List, published earlier this month, the UK’s 1,000 wealthiest people are worth £396bn.)

On the report’s findings, Neil O’Brien, Director of Policy Exchange and contributor to The Telegraph, writes: “If people are paid less, more people can be employed with the same pot of money – in other words, the fewer jobs we have to cut to achieve the spending cuts necessary to tackle Britain’s huge budget deficit.” The options as put forward by Policy Exchange are either (a) cut the rate of pay or (b) cut the number of jobs. In true Thatcherite form the line remains, there is no alternative. A counter argument to the cuts mentality comes from Joseph Stiglitz. The former Chief Economist of the World Bank has argued that “Britain, and the world, […] cannot afford austerity […] cutbacks will weaken Britain”. And on the 26th of March half a million people gathered in London to express their refusal of the government’s austerity programme.

The cause of inequality in the UK lies within the private sector. Responding to John Hutton’s recent Fair Pay Review, Deborah Hargreaves, Chair of the High Pay Commission, comments that high pay “is predominantly a private sector problem” .

The problem is not that public sector workers enjoy better conditions than private sector workers; it is that, while an elite few amass huge personal wealth, the private sector, assisted by the deregulations of previous Conservative and New Labour governments, has eroded away workers’ rights, diminishing real wages, offering little job security and increasing the number of workers in temporary and precarious work. This creates both instability and inequality.

The Policy Exchange report is a cynical attempt to justify public sector cuts, and to pit private against public sector workers. In the name of “a more sensible balance to the labour market” what Policy Exchange and The Telegraph advocate is a race to the bottom, worsening workers’ conditions across the board.

Categories in which this article appears: The Telegraph | Finance | Politics | Trade Unions | Conservative Party |

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