200,000 public sector workers to be on the National Living Wage by 2020...

That's the answer given by Lord O'Neill of Gatley in answer to a written question from Ros this afternoon.

Question:

To ask Her Majesty’s Government what is their estimate of the number of public sector employees currently earning less than the National Living Wage. (HL2582)

Tabled on: 13 October 2015

Answer:

Lord O'Neill of Gatley:

At Summer Budget 2015, the Chancellor announced a new National Living Wage which is a compulsory increase in pay for all workers over 25. It will come into effect in April 2016 at £7.20, 50p above the current National Minimum Wage. The Government will ask the Low Pay Commission to recommend the level of the National Living Wage in each subsequent year, asking them to increase the NLW to 60% of median earnings by 2020. It is estimated that by 2020 approximately 200,000 public sector workers will benefit directly as a result of the National Living Wage.

But, there is an obvious problem here, i.e. the 1% cap on public sector paybill increases imposed by the Government. If that cap includes provision for giving the lowest paid public sector employees a mandatory pay rise, it might not leave much, if anything, for the rest of the staff.

Has the Government thought about this?

Question:

To ask Her Majesty’s Government whether they expect the cost of increasing public sector salaries to the level of the National Living Wage to be met from within the overall 1 per cent pay increase for such workers announced in the Budget. (HL2583)

Tabled on: 13 October 2015

Answer:Lord O'Neill of Gatley:

At Summer Budget 2015, it was announced that the Government will fund public sector workforces for an average pay award of 1 per cent for 4 years from 2016-17.

The impact of the new National Living Wage will be considered during the Spending Review as part of an overall assessment of spending pressures across the public sector.

I don't know about you, but that looks very much like a "no" to me...

[Insert title here] - 18 October 2015

If only you knew, Will... 

Will Hutton writes in the Guardian about the crisis of morale in the public sector. Amusingly, if you're into black humour, he talks of a ten-year pay freeze in real terms. If only, as I won't have had a pay rise that wasn't a real terms cut unless CPI stays as low as it currently is. It won't though...

Wankhede Stadium, Mumbai

It doesn't matter how wide the margin is, as long as there is one...

A win for Mumbai in the Ranji Trophy over Tamil Nadu by one wicket, after a late collapse. We are top of the league, yes we are top of the league...

Talking about a liberal migration policy in Hungary...

ALDE has drawn up some proposals for a liberal migration policy for Europe, having held a workshop on the subject a week ago. I've contacted Liberal Democrats for Seekers of Sanctuary, but do you have any ideas? Get in touch, and I'll let you have a copy of the resolution. Deadline for amendments is Friday, so time is short...


Vegetarians, you might want to look away now...

One of the many joys of having Ros around the place more often is that she cooks. Don't get me wrong, I can (and often do) cook. It's just that Ros is better at it, and we have more time (yes, I do help...). Tonight, a rack of lamb has been consumed, courtesy of our local farm butcher. It was delicious...

Osborne and public sector pay: the market cuts both ways, you know...

It is said that you should be careful what you wish for, and today, the public sector trade unions are  discovering that the saying comes with a further corollary.

In the midst of the debate on benefit caps, Labour proposed regional variations in the level of those caps. The logic was obvious - some places are more expensive to live in than others - and undeniable. Unfortunately, the reverse is also true, in that some places are cheaper to live in than others, a conclusion that was quickly seized upon by Iain Duncan-Smith amongst others. And if you apply that logic, you can argue that you should cut benefits in places where housing is cheaper, or where commuting costs are lower.

But, of course, those aren't the only people who receive their income from the State. Civil servants too, could be presented with the same logic, if the rumours emerging from George Osborne are to be believed. Apart from London Weighting, all civil servants in a Government Department are on the same pay scales, whether in Ipswich or Coleraine, Dunfermline or Aberystwyth. It doesn't take a genius to see the temptation.

There was a time when civil service salaries were decided on the basis of comparators with the private sector. Better pension rights, job security and rather civilised working arrangements in the public sector were offset by better basic pay rates in the private sector. It was a trade-off, and one that seemed to work.

But much has changed over the decades. Work, and jobs, have been moved away from London and the South East to rather worse off parts of the country in need of employment. By doing so, two things were achieved - reducing the staffing costs for government and reducing unemployment levels in places like South Wales, the North East of England and Central Scotland. If you were a London based civil servant, you probably kept your job - natural wastage usually saw to that - but your career prospects were seriously damaged as promotion opportunities dried up.

And recruitment dried up too, creating an ageing Civil Service workforce. In London, particularly, with pay rates losing value over more than a decade, even in good times, even when vacancies were advertised, the calibre of those applying fell - the brightest and the best wanted to make serious money, not altruistically work in an undervalued, much criticised institution.

Outside London, where the pay scales were more competitive, recruitment and retention were somewhat easier. But, if salaries become less competitive - and the changes in pension rules that already apply have made civil service pensions less obviously attractive than they used to be - the ability to attract bright people to deliver vital public services is weakened.

It is possible that, in some places, recruitment and retention rates might not deteriorate if you cut pay in real terms. I fear that there won't be many of them. And in some places and in some Government Departments, such as HM Revenue & Customs, it will become apparent that the pay scales are wholly insufficient. It is, frankly, unlikely that George will consider raising those salaries to reflect what market rates are. But, in Osborneland, the market is a fickle thing.

So, if I have some advice for Danny Alexander (apart from trying to avoid pandas), it would be, "Don't try this, not if you want a Civil Service that can deliver its tasks for much longer.".