This chart comes from the FT:
What is apparent is that the Covid crisis created a disconnect between public and private sector pay that it is clear that this government is determined to maintain. This is despite the fact that the cost of re-establishing the link is small, and pays for itself anyway. What is more, because most of the public sector is not paid for by charging for services supplied, there is no mechanism for these pay rises to feed into price inflation.
The choice being made by ministers now must in that case be deliberate in the face of the facts. They cannot claim ignorance as their excuse for not giving pay awards that a) match inflation b) keep people in the sector c) attract new people in to reduce strain and improve service quality. All three are obviously needed.
So why refuse what any sane minister would work out is not only affordable, but necessary? Three reasons.
First, they want to break the public sector.
Second, they want to break public sector unions, following in the footsteps of Thatcher (or so they think).
Third, they believe this to be the path to privatisation which is their obvious goal.
They face three insurmountable problems. They are that the public side with NHS and other staff. Additionally, they do not believe ministers good intent. And, the public does not want privatisation. That is why this Tory rump parliament will fail. They cannot win against people the public support. But the cost of the fight might be high, and we could well do without that.
The sooner neoliberal government is consigned to history the better.
But then the question has to be asked as to how much better Wes Streeting might be than Steve Barclay and the answer is likely to be, not a lot.
If only we could have competent ministers.
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All commentators say that “they can not afford” to pay the nurses and other public sector workers. No one is asking WHY the government can not afford a pay settlement when anyone who understands the economy, knows that tax does not fund government spending. It is purely a political decision not to make the pay offer, at which point you have why that decision is being made. I’ve not heard that from anyone in the media.
You are right
I think Laura Kuennsberg said to Oliver Dowden on Sunday words to the effct of – you have ignored the recommendations of 4 pay review bodies this year, so this is a political decision.
There again, that feels so unlikely that I may have dreamt it.
I caught Andrew Fisher on Politics Live on BBC2 yesterday, who very clearly said it was a political decision, although he framed it in terms of choices to cut taxes such as SLDT rather than increase public sector pay.
Independent pay reviews are only advisory, not mandated by law. Government decisions on accepting review findings are discretionary and in the case of NHS and Care a review carried out in February before the rampant inflation since is invalid now. They chose to ignore the review of the Justice department. Baker knows this full well and their attitude is purely one of political choice. The “cant afford it” argument cuts no ice as they are willing to spend whatever it takes to arm Ukraine and go ahead with Trident whatever the costs and overruns. are.
That is interesting.
The same principle in law applies to referendums as well.
If course, that is before stupid or just plain thick politicians decide what they mean, without bothering to write their alternative intent into the relevant act.
This tweet was rather interesting (& sad). It features stricking nurses, but is also about a professional person who cannot make ends meet.
https://twitter.com/ClarkCiaran/status/1605466011406303232?s=20&t=BPkGVjob3X6yXo-fkgwbEw
Putting this into context & lest we forget: in 1982 @ the ripe old age of 26 I bought a house a new semi. Engineer, OK job, Ok salary & on my own, with no help, I bought a house. 40 years of tory & tory-lite have brought us to the situation described in the tweet. If we could swap positions/time travel, she could have been me in 1982 – & I could have been her. The overall tory/tory-lite trajectory has been to pauperise the population. This is deliberate. The tories and tory-wannabes (Liebore) know what they are doing, they know there are alternatives but they do what they do “just because they can”.
I share your house buying experience
My sins are angered by it
Sons!
🙂
House Buying Experience Ditto
My solution is….
Create a pay review body of 100 citizens drawn by random lot who will meet for 1 day only.
Unions and government each get one shot (and one shot only) at presenting their proposal.
After discussion and debate the Citizens Pay Review Body then choses (by ballot) one proposal or the other and it gets implemented in full. No further discussion/negotiation/compromise.
It could “all be over by Christmas”!
I think compromise must be allowed for…
But genuine independence and wide representation is vital
Meanwhile I am assuming the shareholders of the banks will be receiving higher dividends due to the rise in interest rates. The banks do have to pay higher corporation tax but I saw there is an extra levy which Kwarteng reduced from 8% to 3%. I think that change survived the arrival of Mr. Hunt. One rule for them and another for everyone else, is still with us, despite the departure of Boris.
As an aside I saw the Telegraph headline “Unions have made conscious choice to inflict harm on patients says Barclay.” As of the underfunding over the years has not. I agree they have an agenda to break public service -of not all-unions.
I completely agree with your reasoning Richard but I also feel that the Tories have a strong emotional need to behave like this.
During the Johnson and Truss years the Tories, the right wing newspapers and the City of London have been repeatedly humiliated. Not only have they been shown to be dishonest, unethical and downright criminal but their supposed political/economic beliefs have been shown to be wrong beyond redemption. They been exposed as naive and talking rubbish. Worst of all people are laughing at them.
So like a Victorian bully straight out of Dickens they assuage their hurt pride by taking it out on the servants and the defenceless.
It’s all about taking back control.
Its the sheer lack of political skill by Sunak and co – even Matthew Taylor of NHS providers published a letter to Sunak yesterday pleading for a negotiated settlement – saying the NHS is on its knees.
Even in their own terms – as you say Richard they cant beat the nurses – and they must know the whole country wants them to settle – but they are quite prepared to crash the whole system – with possibly thousands of casualties .
The Taylor letter should have provoked an emergency Cobra cabinet meeting – its an emergency – to produce a way out – and not just to organise strike breaking.
What Sunak isnt doing seems almost treasonous.
Sunak has to go home to face his wife and in particular, his wife’s father who I gather is intractably right wing. Any show of consideration for workers or indeed practicality will be interpreted as weakness by said gentleman and I should think this is probably Sunak’s main consideration, that he impress the old man. Sunak’s a weak man trying to look strong so he isn’t likely to be doing anything sensible anytime soon.
[…] The government cannot win the NHS pay dispute Richard Murphy […]
[…] The government cannot win the NHS pay dispute Richard Murphy […]
If Wes Streeting cannot come to the conclusion that the NHS has effectively been de-funded since 2010 and de-staffed since 2016 (BREXIT) then he might as well put his thumb in his mouth, crawl into the nearest corner and pass away as far as I am concerned.
It’s obvious to everyone else what has gone on – why not him?
Barclay accuses the unions of a ‘conscious choice to inflict harm’. On that basis J Hunt as health secretary, with his deliberate under-funding of the NHS, ensured the documented level of excess deaths and an NHS significantly under resourced by any measure.
Hunt has inflicted harm and as chancellor continues to do so. 100’s of thousands of deaths are on his shoulders. Applying Barclay’s adage.
As one of Hunt’s constituents I shall be pointing that out to him.
Barclay’s callous nastiness is every bit as bad as Braverman’s.
Agreed
UK business should be very worried about the Tories privatising heath care as in the USA. If they want to keep their workers healthy then they will have to pay health insurance for their workers. With the increase in energy cost all manufacturing in the UK will be uneconomic.
David Byrne says:
One apparent cause of inflation and, hence, increased wage demands is profiteering. This is not mentioned in the news media or discussed by economic pundits. The reasons given such as the war in Ukraine, energy supply problems, transport costs, the price of imported timber etc, etc are not quantified or purposefully analysed.
Which, the consumer ‘champion’ is quiet on the subject and seems to champion only the production of more bespoke magazine titles.
It would appear that the unceasing, much repeated media references to increasing costs has given the green light to all traders to jump on the bandwagon and inflate prices.
For starters, there needs to be a robust, independent investigation into supermarket price gouging now.
Which? supported the EU/ US trade deal, TTIP, (did not go through) , of which privatising health care for the benefit of big US Healthcare firms was a major part.
Next thing we’ll hear is one of the usual suspects floating the idea that individuals should be able to off-set private health care costs against tax…….a short term emergency measure, to help take some of the pressure for the NHS you understand.
Almost certainly
The health of the nation is fundamental to an efficient and successful economy and its growth. Unfortunately, in general the mainstream media do not see or want to address the macroeconomic consequences of not properly managing and funding the NHS and paying fair inflation linked wages. Nor do they seem to want to challenge the government about what is clearly a drive towards breaking the public sector and moving towards privatisation.
I often have to turn my radio off because I cannot stand to listen to the drivel that is discussed on this topic on most shows and the disproportionate importance given to discussing Harry and Meghan and their Netflix series!
i think the Tories realise the game is up for them at the next Election and a wee while after , so this is their final prize and they are going for Gold because the signs are the Labour party wont do much to change anything when they get elected . If the Labour Party had come out and supported the Workers and the NHS etc this would have knocked the wind out of the Tories and they would be a Busted Flush . I think Thompson , the CEO of Royal Mail where i work has gained added confidence in reading the Room and knows he has a free rein for the next 2 years to complete his mission and confine the Union in RM to the Dustbin .
So the final part in the Jigsaw will be , can the Workers sustain this Dispute in all sectors that are Striking for a Long period , probably almost right up to the next Election ? Doubtful i would say , as the Cost of Living etc will prove painful for many . it is almost the Perfect Storm for the final Dismantlement of the Working Class and its Stronger Unions , anyone might come to the conclusion that this is a well Engineered Plan on their part !!??
The pay discrepancy in the chart also ensures that firms have better access to labour, when there is labour shortage, than do public services.
As public service picket lines have been pointing out.
We’ve lost a lot of really good people to the private sector Linda and you are exactly right about that.
In fact I’m hoping to be one of them! I’ve had enough.
I wonder if what we are seeing in the Tories (and also in Stymied Labour) is the atypical result of the PPE degree again – this time from the philosophy bit. Dodgy philosophy at that.
I understand from Tim Snyder (whose book ‘The Road to UnFreedom’ – which is virtually a text book for our times, – 2018, pp. 30-31) that there is a philosophy called ‘Hegelianism’ named after the G.W.F Hegel – some philosopher or other. I will try to sum up:
Basically Hegel came up with the idea that any form of progress must be accompanied by suffering by someone or other as a means to try to reconcile what is with what should be. The suffering was based on the concept of redemption for mankind’s slighting of God’s creation and will – original sin, the Garden of Eden and all of that.
In this mind set, we are all guilty and deserve what we get (but not if you are rich and earning well over the median wage as you get to choose who suffers in the name of God). The Left thinks that it is mankind that creates suffering on each other (and I agree). But the Right delegates that to God or what Hegel called ‘Spirit’. The whole idea is to suffer now and benefit later.
How convenient eh? To say that God causes this – it his will and it must be? The adherence to not doing the right thing by the Tories can only be explained in age of no new ideas by this philosophy.
It’s old hat isn’t it and very fatalistic as well as being very convenient? It’s amazing how such old fashioned ideas survive and how they can inflict so much damage.
And I worry about how many Labour politicians sup from this poisoned chalice too.
“because most of the public sector is not paid for by charging for services supplied, there is no mechanism for these pay rises to feed into price inflation”. Thanks for this simple explanation.
The rest has been obvious for a long time. I truly despise this gang of sociopathic self-servers. I am sure the original plan was to get a trade agreement with the US that would give access to the NHS as part of the deal. After that, privatization would be effectively irreversible as there would be those compensation claims for future profits lost.
The Lib Dems should firm up details of what they would do for the NHS if they had enough MPs to force change. I will write to my Lib Dem MP on that. Labour have to be challenged and not just drop into power because this gang are so disgustingly awful.
You are an inspiration Richard, reading your work informs me and gives me hope to do what little I can to effect a better government. The worst thing would be people losing hope and giving up.