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Public sector to be hit

Mr Brown has just launched an attack on public sector pay which he describes as “excessive”. He announced the government’s paper on smart government, saying: “It cannot be right that taxpayers fund 300 local authority officials who have salaries over £150.000 or that in total over 300 staff across public sector bodies are paid more than £200,000.”

 

How is it that a man who has just spent 10 years as chancellor of the exchequer and 2 years as prime minister has only now discovered that there is ‘excessive’ pay in the public sector? I don’t suppose people will think that this is anything to do with the forthcoming election will they?

 

It seems Mr Brown is set on “naming and shaming” those civil servants and members of quangos earning over £150,000 per year. I think if I were earning over £150,000 per year of taxpayers money, I could put up with quite a lot of shaming. Water off a duck’s back comes to mind.

 

Public sector services are now officially in the firing line.

Public sector services are now officially in the firing line.

By contrast, the centre-right Reform think tank has just said that public sector employment costs need to fall by 15%, which is equivalent to one million jobs. Their director Andrew Haldenby said: “Politicians have to be more honest with the public about what needs to happen if they are to reduce the deficit. Radical changes won’t happen if they see their roles as defenders of the status quo. The public sector workforce has to shrink to become as productive as the private sector.”

 

Interestingly, Professor Greg Mankiw of Harvard mentions in his blog this week that he asked his freshman students how their views had changed over the course of the semester. He said: “Those who started out liberal said they came to appreciate market mechanisms more. Those who started out conservative said they came to appreciate the market’s limitations. In other words, after a few months of reading and discussing economics and public policy, most of them moved toward the political center and closer to agreement.”

 

Perhaps that is what we can expect in the UK. When the pendulum stops swinging it always ends up back in the centre, and no doubt there will be just enough fat taken off the public sector to appease voters, but not so much as would damage front-line services.

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Posted in Earnings, Employment, Public Finances

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