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August 2, 2022 - 2:00pm
There’s no doubt about it — Liz Truss has stuffed up. Indeed, her announcement on public sector pay is a double blunder that might sink her whole campaign.
At first sight it looked like she was trying to save £8.8 billion a year by cutting civil servants’ salaries outside London and the South East — the justification being that living costs are lower in the rest of the country. But as Sam Freedman points out, the total civil service wage bill is £16.5 billion. So how can trimming it through regionalised pay structures yield such an enormous saving?
The answer, of course, is that it can’t. Somewhere in the briefing process someone had confused civil servants with the much larger category of public sector workers. But as the policy details became clearer, so has the full extent of its political toxicity.
What Truss was actually proposing is a pay cut for millions of people employed in our public services. So that’s nurses in the North, soldiers in the South West, teachers on Tyneside — you get the idea. A gleeful Labour Party has called it “a fantasy recipe for levelling down”, but it’s worse than that. Truss’s proposal wouldn’t level anything, but further increase the regional imbalance in average earnings. It would also make it much for harder for schools and other vital services in left-behind areas to attract key staff, which is exactly why similar proposals were rejected years ago.
But then that’s the trouble with Truss — she’s in the habit of seizing on hare-brained schemes under the misapprehension that they’re both new and effective. Her policy of scattergun tax cuts to revive the economy is another key example — in particular her determination to reverse Rishi Sunak’s policy on corporation tax.
As Sunak forcefully explained at last night’s leadership hustings in Exeter, the Conservatives — under David Cameron and George Osborne — have already tried to boost the UK sluggish productivity by cutting business taxation. But it didn’t work — hence Sunak’s decision to use the tax system to provide better-targeted incentives for the real investment that this country so desperately needs.
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SubscribeWhat a mess…..she was winning ..why rush out an ill thought through plan like that.
Actually the whole public sector should be forced to switch their pensions from salary linked and inflation protected defined benefit to DC like the rest of the country were forced to 20 years ago – this would amount to a massive saving in the long run and fund tax cuts for the rest of us.
Public sector salaries should also be capped and more people sacked for poor performance – the whole culture is wrong, more interested in writing woke rules and processes than doing a good value for money job for the tax payer
Most public sector salaries are fairly poor though, in comparison to the private sector. The decent pension is one of the few perks left, and they’ve been steadily watered down from the final salary schemes of the past
Depends where in the country – which region – you’re talking about. In the regions with the highest proportion of public sector employment, i.e. those most in need of levelling up – public sector salaries are well above private sector norms.
https://capx.co/crowding-out-how-regional-pay-bargaining-can-secure-the-dream-of-levelling-up/
It was her saying she would criminalise cat-calling that made me realise the Tory party is about to let us down AGAIN.
Mind you, she’s preferable to the awful-in-so-many-ways Sunak.
It was a mis-step, no question. On the plus side, however, it’s been swiftly dropped, proving her campaign can react quickly to events. Obviously the mistake shouldn’t have happened in the first place – and hopefully lessons can be learned from that – but something was bound to go wrong sooner or later, and as the front-runner the scrutiny will remain intense.
However, is this really a major turning point in the campaign? I can’t hep thinking this is wishful thinking from Peter, who clearly favours Sunak heavily. The race may narrow, in fact it probably will anyway as Truss was never going to get everything totally her own way. But a game-changing moment? I doubt it, but we’ll see.
Besides, it’s not like Sunak hasn’t also been making up policy on the hoof, as evidenced by his sudden conversion to tax cuts after as good as branding them criminally irresponsible.
What’s completely farcical about the whole business is having two individuals presenting themselves as policy-makers when we all know that policy is developed over a period of time by many individuals and groups.
The campaign period has been dreadfully timed; the vote among the membership shouldn’t be extended across the entire ‘silly season’. It’s not as if these interminable hustings are any real test of how either Truss or Sunak will perform as PM since that role isn’t about bringing new policies to light every two minutes but providing a coherent and convincing management of the government machine – which is where Boris, for all his electioneering abilities and deadlock-breaking success with Brexit fell down.
I dare say we’ll all be sick of hearing from the pair of them by September. It’s not really their fault, but the whole mismanagement of the process by the Tory party.
Well, what we seem to get is each time Sunak or Truss get anything wrong, a journalist writes a piece on how this has sunk their campaign once and for all. Enough turning points already!
The idea of pay being linked to regional costs of living isn’t new and, in many ways, not without merit. Go to work slightly beyond the M25, say in the Thames Valley corridor, and you’ll get paid less without London weighting, but still have whopping outgoings. It’s a tough policy to implement though.
Poundshop Thatcher
Twas Thatcher what levelled the North in the first place and replaced entire industries and the communities reliant on them with precisely Nothing
Hmmm… except creating the conditions to turn the UK into an employment powerhouse from the late 80s to 2020. And the north had been in severe decline in the 70s also.
If by employment powerhouse you mean ‘Drugs Capital of Europe’ which is what filled the vacuum left by Thatchers venality
A rather dishonest article from the normally reliable Franklin. Regional pay bargaining doesn’t mean a pay cut for anyone.
There’s not the slightest chance of regionally varying pay for the armed forces.
Osborne’s business tax cuts may not have improved productivity but they did increase the tax take.
I could go on …
Truss and Sunak both sound like WEF Young Global Leaders, does anyone know if they are – or are they just stamped of that mold? Does anyone think they will make Britian a better place for their leadership, or merely that they are next in line from the Party Political Machine?
No, Liz will comfortably win. From the Spectator:
Is it a turning point? I doubt it. I think people have long-since made their minds up and “won’t be for turning” now.
Both sides have made pillocks of themselves, after all. But it doesn’t matter much. A PM doesn’t need to be the brightest candle in the firmament – they just need to own the sharpest knives in the drawer and be prepared to use them ruthlessly, then dispose of them heartlessly.
Truss can do that (I hope)
But, but… the Leadership campaign is not an election campaign. A mistake over public sector vs Civil Service pay will play out through the Conservative Party members who are motivated by an entirely different calculus to the general electorate.
What makes Peter Franklin so certain that this is a “blunder” ? Is this not a serious issue which needs to be addressed ? If only because the current policy actively works against “levelling up” – there is a problem here regardless of whether total employment costs are reduced, stay the same or rise.
Of course, at a raw political level today, this certainly isn’t the message to be giving. Nor the right time,
But it absolutely is an area where changes need to be made in the future. Relative over pay for the public sector in less affluent areas must make working in the private sector there less attractive and suppress private sector activity (since the private sector does not have nationally level pay). Either you make private sector pay relatively higher in the poorer areas or you allow more regional pay variation in the public sector.
Note that we already have public sector regional variation – the “London weighting”. However, as my local MP recently asked Boris Johnson, why does this not apply to other extremely high cost of living areas like the Cambridge area ?
Any serious political leader will eventually need to tackle this. Just as with funding care costs for the old.
So I would prefer to read what Peter Franklin actually proposes to do here and what solutions he has to offer.