Daily Archives: July 6, 2009

Not just another drop in the ocean

Duncan criticises the economics of the proposed public sector pay freeze. Nigel criticises the equity. I’m inclined to criticise the politics.

MPs got a 2.3% pay rise this year. Local Government workers have been offered 0.5%. Already, that doesn’t look terribly good given the headlines of recent months. I appreciate many private sector workers are suffering badly from the recession and high public sector pay increases would anger them. At the same time, public sector pay is obviously less likely to be cyclical, and indeed so it should be. When inflation was roaring up towards 5% at the end of the boom, we were told to accept 2.8% and shut up about it, to help the economy control inflation. I did wonder at the time whether if deflation materialised we would get a huge pay boost to help crank it back up. I rather assumed not and have been proved right – you have to be a banker for the Government to accept that logic.

Steve Bundred at the Audit Commission, who was the first to float the pay freeze as a ‘pain-free’ way of tackling the deficit, is 67th on the Taxpayers’ Alliance list of public sector fat cats, with a salary of £245,000. If you want to freeze my salary at £245,000, Steve, I’m more than happy for you to do that. You would have to double it and then triple it and then add a bit more first, though. Even so, a pay freeze might annoy me at a time when everything I buy is getting more expensive, but it wouldn’t cause me any real hardship – I’m fairly well paid and very frugal. But it makes you look a bit silly, I think, when you are proposing a real terms cut in the income of people earning about 5% of your wedge. Less, in fact, than it costs to live. That’s why it’s often called a ‘cost of living’ increase, Steve.

Alistair Darling, who says that “Public sector pay has obviously got to reflect prevailing conditions and in particular inflation has come way down“, seems not to have noticed that inflation has been above target for 20 months in a row, and indeed for those of us who don’t have mortgages it is still around 3% (slightly more or less depending whether you think the VAT cut is a real fall – I bet wages aren’t increased to compensate when it goes back up!). Alistair Darling earns around £150,000, plus expenses and a small income from a flat he owns in London and rents out since he has a free house in Downing Street. Claiming inflation is low makes you look like a bit of an idiot, Alistair, like when MPs are asked the price of things like a loaf of bread or a pint of milk and turn out not to have the faintest idea. £250 a week, isn’t it?

Of course none of them really mean any of this. Alistair means “Look at me, I’m independent from Gordon and I can prove it. You should vote for me because I’ll be tough on public spending without cutting services”, and Steve means “I know you want to abolish my organisation Mr Cameron, and I know most of your party thinks I’m a Labour stooge, but look at all these helpful things I’m saying, I’m sure we can come to some arrangement”.

Local Government Association Conference

When I was at University, I didn’t go to many lectures. Partly that was because so many of them seemed to be in the morning, and I didn’t like mornings – more, though, it was because very many lecturers simply talked, quite slowly, along the same lines as the books they had written. My eyes work faster than my ears, so I didn’t see the point in sitting for an hour to learn what I could read in ten minutes and spend the rest of the time looking out other books, attending meetings by exciting guest speakers, meeting fellow students, trying out new experiences and, well, drinking and sleeping. Mission accomplished in any event as I came out with a respectable 2:1 – I’m not an academic enough type that a First was ever genuinely in prospect, so better a solid 2:1 than a frustrating high one, I say.

LGA conference in Harrogate last week, which I was fortunate to attend, hence my silence, had a number of similarity to my student days. I refer not to the high alcohol content (although…) but rather to the fact that the most interesting stuff wasn’t usually going on in the Conference hall. I mean no disrespect to the organisers by that, but the votes are no concern of mine – I haven’t got one – and the speakers were largely saying what you would expect them to say. If they veered off the script you could guarantee in any case that it would appear on Twitter or even the real news. In consequence I spent much more of my time seeking out people to talk to in the fringes, the conference exhibition, and smaller meetings. I find I learn more about CCTV from listening with a critical ear to someone whose job is to sell me a CCTV installation, than at a political debate about its merits and cost-effectiveness.

So when I said on Twitter that I wasn’t going to write up LGA Conference, that’s why. It was interesting, and tiring (Going from early B&B breakfast to conference centre, to sessions, to workshop lunch, to afternoon sessions, to evening fringe, to late evening receptions, to getting some food, to going back and checking the office e-mail on my laptop to make sure I hadn’t missed anything, makes for a long day). I met more useful people than I could have sought out in a month of phoning up and trying to arrange meetings if they hadn’t all been in the same place, and I heard some fascinating stuff – from the realism about the forthcoming lack of money discussed in detail at the NLGN fringe session, to an explanation of how Cheshire are going through the process of merging two lots of three Districts into two unitary Councils at the same time as splitting the County Council in half. Fairly challenging, but undoubtedly worth knowing about.

I’d certainly recommend it to anyone who has the opportunity to attend, and there’s strong merit to having Councillors from all different parties and parts of the country brought together to share and debate the common challenges that local government faces. What I think I did ought to write is a more detailed post about perceptions of the LGA, which has come in for a lot of stick from grassroots Conservatives, especially after Margaret Eaton’s (broadly correct in my view) criticism of the Taxpayers’ Alliance, but I’m pondering exactly what I want to say.