2% public-sector pay rise won't cover inflation

WRITING IN the Financial Times (FT) (29/8/06) Chancellor Gordon Brown called for a 2% limit on all public-sector pay rises next year. This is an even tighter target than the 2.5% increases in public sector pay (which Brown calls an achievement) for 2006.

Jared Wood

Brown writes in the FT. Where else could the impoverishment of civil servants, local government workers, teachers and health workers be called an achievement? In any case, a 2% pay 'increase' is not a real increase.

Official data may say that inflation is at a historically low level but the real cost of living has risen sharply. Housing, transport (public transport or car), food, gas and electricity are all far dearer than a year ago and together represent the majority of spending by working people. Even the Daily Telegraph said the real rate of 'middle-class inflation' was 10% once essential outgoings (including private school fees!) are included!

In his article the Chancellor accepts there is a risk of yet higher inflation. Harking back to the industrial battles of the 1970s he insists workers must bear the costs of inflation by accepting a cut in real pay.

Yet, the same day's FT reported that, following a review of executive pay structures, the average leading executive of an FT100 listed company received an increase in overall remuneration (basic pay plus bonuses) of 12%-15% this year. That's up from 11%-13% last year and takes their average earnings to Ł2.4 million. That's an increase averaging about Ł313,000 each!

The socialist leadership of PCS (Public and Commercial Services Union) has recognised the fight on its hands and has already organised widespread strike action over pensions and job security. Local government workers in UNISON have also taken action over pensions.

But resisting New Labour's assault on public-sector workers (and by using them as an example, all workers) cannot be left to each workforce as it comes under attack. Any dreams of partnership with a Brown government must end now.

Public-sector unions need to develop a united strategy to confront the government; to maintain pension entitlement at 65; to defeat Brown's threat of 100,000 civil service job cuts; to reverse the transfer of national output from wages to company profits and show again the power of organised workers.

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In The Socialist 7 September 2006:

Fighting back against attacks on NHS