YOU will be aware that there is currently a big debate over public sector pay, and I make no apologies for focusing this week’s column on this vital issue because every day we all see the incredible work that public sector employees do all around us, and all of us want to see people get fair pay for the jobs they do. But the answers are not as simple as writing down a promise on a piece of paper and waving it around.
You’re probably sick and tired of hearing about the deficit, but it remains the biggest millstone around our national neck.
The amount we are spending every single year over and above what we collect in taxes has been hugely reduced since 2010 but still stands at an astonishing 52 thousand million pounds every year, and our annual interest payments on our national debt are larger than the schools budget and policing budget combined. I don’t know what you think, but I just don’t think that’s right or sustainable.
That’s why we have looked for ways to get our spending back in balance and have sought to keep public sector pay rises low – with a quarter of all employees working in the public sector, even small increases every year add up to huge sums.
But remember that the total package for those working in the public sector can be more generous than in the private sector – on average, base salaries are about the same in both sectors, but many public sector employees get automatic pay rises every year, called “progression” which means that a nurse on an average salary has seen their income go up by 3.4 per cent a year, over and above the one per cent pay cap.
Public pension schemes are more generous too – in 2014, 83 per cent of public sector workers were a member of a defined benefit pension scheme compared to just nine per cent of private sector employees. And it is also the case that the big increases in the tax free personal allowances that we have delivered – up from £6,500 to £11,600 in 2010, mean that almost all employees keep more of their money, and this has saved a person paying the basic rate of income tax £715 in 2017/18.
By comparison, if their income had increased by inflation rather than one per cent someone earning the average nurse’s salary would have only seen an increase of around £630.
So, you can see that the arguments are not as clear cut as some people make out, and I think it is hugely important to make any changes sensibly, calmly and in a way that is affordable, not in a way designed to get the headlines – and leave Britain’s coffers bare.