Unions cynical about three-year fixed pay deals

10 Jan 08
Union chiefs this week warned that clashes were inevitable if the government sticks to its guns in pushing through below-inflation fixed pay deals.

11 January 2008

Union chiefs this week warned that clashes were inevitable if the government sticks to its guns in pushing through below-inflation fixed pay deals.

Prime Minister Gordon Brown and Chancellor Alistair Darling began their New Year offensive by proposing that three-year pay settlements, already in train for some public servants, should be rolled out further as a bulwark against inflation.

There is already voluble opposition to the prime minister's 2% public sector pay cap, and a continuing dispute with police, who are angered at the government's refusal to backdate their pay rise as recommended by a review body.

Unions warned that fixed pay settlements were unlikely to be accepted unless they were accompanied by substantial increases.

As Public Finance went to press, the largest public sector union, Unison, was due to hold a summit on January 10 to draw up tactics to tackle the pay curbs. A spokeswoman told PF that the union was 'very, very dubious' about three-year deals.

'We're not ideologically opposed, but it all depends on the money on offer. If it is being used as a means to cut pay, that's just not acceptable… We can't have a situation where public sector workers receive below-inflation rises,' she said.

Senior Trades Union Congress officials are to meet on January 14 to discuss public sector issues and their approach to the three-year pay plan.

General secretary Brendan Barber maintained that fixed pay deals were acceptable in principle, but added: 'Public servants will be asking: where's the beef?

'Reactions will critically depend on the terms on offer and whether the government will give people real confidence that their living standards will be protected. Confidence badly needs to be rebuilt after last year's railroading through of below-inflation rises and the undermining of independent pay review bodies.'

Brown stated that fixed pay deals for workers such as teachers and nurses would help to control inflation and make it easier to plan for the long term.

'What people around the country want is certainty moving forward, greater stability in their family finances and the knowledge that they have a longer-term pay settlement that can meet their bills,' he said. 'We must control inflation. There is no point in a big salary rise that is wiped out by a big inflation rise.'

But unions rubbished the idea that public service pay was a driver of inflation. Last autumn, civil service unions gave the Treasury a report by the independent Income Data Services, which concluded that 'very little' of the recent inflation increase was attributable to public sector pay rises.

Dai Hudd, assistant general secretary at the civil service union Prospect, this week said the government had never responded to the report. 'That's no surprise as it exposed the complete lack of evidence for their pay policy.

'If the new policy is merely the 2% policy repackaged over three years, it will continue to lead to increasing conflict among public servants.'

Teachers are to receive a three-year pay deal from this September, but the independent School Teachers' Review Body has still not issued its recommendations, expected last November.

Despite this lack of detail, the National Union of Teachers has already warned that it will ballot for industrial action if the government imposes a below-inflation settlement.

The Association of Teachers and Lecturers told PF that teachers' faith in government promises on pay had been shaken by ministers' refusal to re-examine pay rates on the current two-year deal once inflation breached 3.25%.

A spokeswoman said: 'We've nothing against three-year deals if the government honours its promise to look again [at pay levels] if inflation goes beyond a certain trigger point. But if they won't, then we do have an objection because it means teachers' pay will be cut in real terms.'

Treasury ministers, however, defended the government's record on public sector pay. Quizzed by the Commons Treasury sub-committee on January 9, Exchequer Secretary Angela Eagle said that between 2000 and 2006 public servant salaries rose way above inflation.

'Over the past few years, because we've had a successful stable economy with consecutive growth over 61 quarters, we've been able to make substantial investments into the public services, and that has included investment in more staff and in better-paid staff,' she said.


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