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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No, the Brexit vote wasn't just about immigration

The data shows that most voters want a fairer society. Labour must fight for this in the Brexit negotiations. 

The result of the UK referendum to leave the European Union has shaken the political establishment to its core. As I have argued since then, it should be a wakeup call to all political parties.

Some have also argued that the referendum result is having international repercussions, with the election of Donald Trump to the White House cited as "Brexit Plus Plus". With the imminent election in France, and Germany’s later this year, responsible analysts are trying to understand why people voted the way they did and what this means. Too often, there are knee jerk explanations without any evidentiary justification to back them up. 

Analysis of who voted to leave shows the majority of people who voted to leave live in the South of England, and 59 per cent were from the middle classes (A, B, C1). Only 21 per cent of people in the lowest income groups voted to leave.

Analysis of why people voted as they did is more complex. This includes an increase in Euroscepticism particularly from older, middle class voters; concerns about globalisation and the impact on jobs; inequalities and being left behind; and new voters who didn’t vote in the 2015 General Election, for whom immigration was a concern. When this analysis is overlaid on analysis of that election, some themes emerge. The attitudes and values of the majority of the British public are firmly rooted in the desire for a fairer society, based on principles of equality and social justice. Although immigration played a part in the election and referendum results, perceived competence, being "left behind" and disillusionment with the direction of change were the key drivers.

Whether people voted to remain or leave, they did so because they believed that they and their families would be better off, and the majority who voted believed they would be better off if we leave the EU. Labour accepts and respects this. We have said that we will vote for Article 50, but we intend to hold this Tory government to account to ensure we get the best possible deal for the country.

In his speech last week, Jeremy Corbyn set out the issues that Labour will hold the government to account on. We have been absolutely clear that we want tariff-free access to the single market, to ensure that Britain continues to trade openly with our European neighbours, and to protect the cost of living for families struggling to get by. Getting the best deal for the UK means that we must continue to have a strong relationship with our EU neighbours.

Under my work and pensions portfolio, for example, we know that 40 per cent of pension funds are invested outside of the UK. If we want to guarantee a dignified and secure retirement for our pensioners, we must ensure that savers can get the best returns for the investments they make.

We also know that many of the protections that have until now been offered by the European Union must continue to be guaranteed when we leave. Provisions that secure the rights of disabled people, or that protect worker’s rights are an essential part of British society, enhanced by the EU. These cannot be torn up by the Tories.

Defending these rights is also at the heart of our approach to immigration. The dire anti-migrant rhetoric from some parts of the media and certain politicians, is reprehensible. I reject this scapegoating, which has fear and blame at its heart, because it is not true. Blaming migrants for nearly seven wasted years of Tory austerity when they are net contributors of over £2bn a year to the economy is perverse.

Of course we need to respond when public services are coming under pressure from local population increases. That’s why Labour wants to reinstate the Migration Impact Fund that the Tories abolished. We also need to ensure new members of communities get to know their new neighbours and what’s expected of them.

We believe that migrants’ broader contribution to British society has too often been obscured by the actions of unscrupulous employers, who have exploited new arrivals at the expense of local labour. A vast network of recruitment and employment agencies has developed in this country. It is worth hundreds of billions of pounds. Last year over 1.3m people were employed in the UK by these agencies. In 2007, 1 in 7 of these people came from the EU. We should ask how many are recruited directly from the EU now, and offered precarious work on very low wages whilst undercutting local labour. Labour will put an end to this practice, in order to protect both those who come here to work and those that grew up here.

Importantly, however, we cannot let our exit from the EU leave us with skill shortages in our economy. Our current workforce planning is woeful, particularly for the long-term. We need to reduce our need for migrant labour by ensuring our young, and our not so young, are trained for the jobs of the future, from carers to coders. Again, the Conservatives have undermined people’s chances of getting on by cutting college funding and the adult skills budget.

Unlike the government, Labour will not shirk from our responsibilities to the nation. Our plans for Brexit will respect the referendum result, whilst holding the Government to account and delivering a better future for all our people, not just the privileged few.

Debbie Abrahams is shadow work and pensions secretary.