It's time to scrap national pay bargaining

by Benjamin Elks, Fundraising, Operations and Events Assistant at the TaxPayers' Alliance


It’s a challenging time for everyone. Inflation is running at almost 10 per cent and the tax burden is due to reach a 70 year high. So it’s understandable that people want some relief and a pay rise to help ease the burden.


Which is why the latest public sector pay review bodies’ reports were even more anticipated than usual. The bodies cover those working in the NHS, school teachers, the armed forces, the police, prison officers, senior civil servants and judges.


The exact level of increase varies between sectors but the average is a 4.5 per cent pay rise. This might not sound like a lot, but it could cost UK taxpayers a whopping £21 billion. 


There are certainly many deserving workers in our public services, but it’s important to remember that the majority are on pretty competitive salaries. The average GP is already in the top 4 per cent of UK earners.


Many public sector employees also receive benefits far in excess of those available in the private sector. 


The NHS pay review body boasts that the health service offers “a holiday allowance of up to 33 days (plus eight public holidays), sickness absence arrangements well beyond the statutory minimum, enhanced rates for nights and weekend work, access to a much-valued pension scheme, enhanced parental leave, and support for learning, development, and career progression.”


Senior civil servants get up to 30 days of holiday (plus bank holidays), enhanced parental leave, and a defined benefit pension. The average judicial salary in England and Wales was over £134,000 in March 2021. And I’ve written before about the injustice of the judicial pension scheme.


In other words, on pay and a host of other factors too, many public sector deals are already undeniably generous.


The latest research from the TaxPayers’ Alliance has found that the disparity between public and private sector pay across the regions equates to £20 billion. These differences between the public and private sectors are not new. And there are certainly some people in the public sector in desperate need of support. No one would begrudge a rise for these deserving individuals. 


But it cannot be right to continue lavishing more rewards on already well heeled public servants and expecting ordinary taxpayers to foot the bill. That’s why we’re calling on the government to scrap national pay bargaining, the practice that sees across the board pay rises up and down the country with no consideration for local circumstances.


It leads to public sector employees in low cost areas being paid excessive salaries (because the cost of living is higher elsewhere in the country) and crowding out of the private sector in poorer regions.


Scrapping national pay bargaining would bring more fairness between private sector salaries and public sector pay in areas like the North East. And, in London and the South East, would end the reliance of public sector employers (especially NHS trusts) on expensive agency staff when they are unable to recruit at uncompetitive national pay rates. 


The TPA found that adopting a regional approach to public sector pay would save a whopping £8.8 billion a year, enough to raise the personal allowance by £600 and cut income tax by 1p. 


But beyond this, government needs to get a grip on public spending, look to level the playing field between the public and private sectors, and reduce the biggest bill facing families - their tax bill.

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