Policy Exchange is wrong on public-sector pay

It is misleading to compare private- with public-sector pay -- it’s not a like-for-like comparison.

Policy Exchange has a new report out today on the public sector, and while it has tidied up its stats a little -- given the hammering that dodgy stats on the public sector have got in the past -- what the report says is still pretty misleading.

For Policy Exchange and the shrink-the-state right, every nurse, every doctor, every teacher is a drag on the economy. The rest of us know that they all play a vital role -- as do countless other public servants. Far from holding back the private sector, the public sector educates and trains its workforce, buys many of its goods and services, keeps its staff healthy and provides the infrastructure without which the UK would travel back to the 19th century.

Policy Exchange wants people to believe that public-sector wages have overtaken those in the private sector. This is simply not the case. In every year since 1984 -- the earliest year for which official statistics are available -- average hourly pay in the public sector has been higher than in the private sector. But this is because the public sector has a much greater proportion of skilled and professional workers such as teachers and doctors than the private sector.

In recent years this trend has intensified. Lower-paid jobs such as cleaners and care assistants have been privatised, while the big growth in public-sector employment under the last government was among professionals such as teachers and doctors.

To compare pay properly, you have to look at people doing similar jobs, but this is impossible, as jobs differ too much. However, you can compare the pay of people with similar qualifications. This shows that graduates earn somewhat less in the public sector while those with no qualifications earn a bit more. This is because the gap between those at the bottom and those at the top in the public sector is smaller than in the private sector. Most people would think this is a good thing.

Of course, they cannot resist citing higher levels of absence in the public sector, even though public-sector staff are more likely to work when they are ill.

And it takes chutzpah to report accurately the collapse in private-sector pension provision for most private-sector workers -- despite the retention of diamond-encrusted, platinum-plated pensions in Britain's top boardrooms -- as a reason for attacking public-sector pensions.

It would be equally logical to say that if public-sector workplaces were more dangerous than those in the private sector, this should be evened up until as many people were killed at work each year in the public sector.

Under the guise of all-round fairness, Policy Exchange seems to want to bring the worst kind of vulnerable, low-paid, no-rights employment into the public sector. We think that is a very strange notion of fairness.

Nigel Stanley is the TUC's head of campaigns and communications.

This blog is cross-posted from Touchstone.

Nigel Stanley is the head of communications at the TUC. He blogs at ToUChstone.

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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.